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Education in 2008-09 Union Budget

The allocations to the education sector in the union budget for 2008-09 are substantially more than in 2007-08, but the hike is not as large as in previous years. The budget marks a shift in priorities in a number of areas. One, higher priority to secondary, technical and higher education, and less to elementary education. Two, a preference for expansion of elite over mass-based system. And, three, a preference for funding from cesses over allocations from the general budget.

INSIGHTEconomic & Political Weekly EPW May 17, 200849Education in 2008-09 Union BudgetJandhyala B G TilakThe allocations to the education sector in the union budget for 2008-09 are substantially more than in 2007-08, but the hike is not as large as in previous years. The budget marks a shift in priorities in a number of areas. One, higher priority to secondary, technical and higher education, and less to elementary education. Two, a preference for expansion of elite over mass-based system. And, three, a preference for funding from cesses over allocations from the general budget.Jandhyala B G Tilak ( is with the department of educational finance at the National University of Educational Planning and Administration.There is a general euphoria that the outlay for education has been hiked very significantly in the Eleventh Five-Year Plan and that the days of under-funding of education are a thing of the past. The allocation to education in the Eleventh Plan is likely to be Rs 2,87,000 crore, which is five times the allocation made in the Tenth Plan in nominal terms. This is also expected to constitute nearly 20 per cent of total plan expenditure, compared to 7.7 per cent in the Tenth Plan. This is considered as an “unprece-dented increase in financial support for education in India”. Are the days of planning education under economic austerity indeed over? How does the treatment of the education sector in the Union Budget 2008-09, the “cru-cial” second annual budget of the Eleventh Plan, fit in the grand scheme of the five-year plan, which is proclaimed as a “national educational plan” which recognises education as a “centred (central) instrument for achieving rapid and inclusive growth”. This paper briefly examines some of the important aspects of education in the union budget and raises some questions for discussion.The finance minister allocated in the budget for 2008-09 an amount of Rs 34,400 crore for education, compared to the revised estimate of Rs 28,674 crore in 2007-08. A close examination of the budget allocations shows that the increase is not particularly high, besides indicating marked shifts in education priorities of the government: from elementary to secondary and more importantly to higher education, from mass expansion to expansion of some kind of elite institu-tions, from a system of funding out of general budgetary support to funding out of earmarked taxes/cess, and to a system of delivery that relies more on public- private partnership.First, at the national level. The total expenditure on education incurred by the union and state governments increased from Rs 67,000 crore in 2000-01 to Rs 1,33,000 crore in 2007-08. The nearly twofold increase in a period of eight years, though in nominal prices, seems to be impressive. However, according to the Economic Survey 2007-08, the allocations to educa-tion made by the union and the state governments together, as a proportion of GDP, have not been satisfactorily progress-ing during the last few years. The ratio was above 3 per cent in 2000-01, and ever since it has steadily declined to reach a low level of 2.69 per cent in 2005-06. It is only in the last couple of years that the declining trend seems to have been reversed, according to the revised esti-mates for 2006-07. However, even accord-ing to the revised estimates, the propor-tion allocated to education in 2007-08 is much less than the 2000-01 level! Further, we often note substantial differences between budget estimates, revised esti-mates and actual levels of expenditure. So one cannot be certain that the downward trend has been actually reversed in the recent years. These figures refer to the expenditure on education incurred by the departments of education (school and higher educa-tion), and do not seem to include the ex-penditure incurred by other departments on education, which also seem to be signi-ficant. For example, the total expenditure on education incurred by the departments of education and other departments on education together constituted 3.7 per cent ofGDP in 2005-06,Budget Analysis of Expenditure on Education 2003-04 to 2005-06 while as shown in Table 1 (p 50), the expenditure of the departments of education accounted for only 2.7 per cent. Further, these figures in Table 1 also mark a declining trend in the relative prio-rity given to education. The share of edu-cation in total government expenditure on all sectors declined from 11.3 per cent in 2000-01 to 10 per cent in 2005-06. Even within the total social sector expenditure, the share of education declined from above 50 per cent to 47.2 per cent in 2005-06 and
INSIGHTMay 17, 2008 EPW Economic & Political Weekly50further to 45.3 per cent in 2007-08 (revised estimates).The total budget expenditure on educa-tion consists of expenditure incurred by the union and the state governments. That about 80 per cent of the government expenditure on education is met by the states, and that the expenditure of the union government is relatively small is well known. It can be noted that the states meet a substantial, nearly all of the non-plan expenditure on education, while in case of plan expenditure, the centre meets a good proportion of it. Education in Union BudgetsThough the expenditure of the union gov-ernment on education is small, it may as-sume much significance as it can set new directions for develop-ment, induce state gov-ernments to take up new programmes, mobi-lise more resources to take advantage of central schemes that require matching shares by the state governments, and on the whole, contribute significantly to education development in the coun-try. So union budget allo-cations are worth a close examination.To start with, there has been a signifi-cant increase in the union government’s budget expenditure on education, as shown in Table 2. The total – plan plus non-plan – increased from Rs 7,900 crore in 2000-01 to 38,700 crore in 2008-09, as per the budget estimates. This, as a proportion of GDP also increased, particularly in the recent years. It is estimated to be 0.7 per cent in 2008-09, compared to 0.4 per cent in 2000-01. But given the long-pending goal of allocating 6 per cent ofGDP to edu-cation by the union and state governments together, the current level does seem to be far from satisfactory. The union govern-ment and also equally, if not more impor-tantly, the states have to increase their allocations to education substantially to reach the goal. Further, in the union budget, the education sector accounts hardly for five per cent of the total expenditure in 2008-09.While non-plan expenditure is also important as it is required for the main-tenance and upkeep of the system, it is plan expenditure that assumes much significance, as it is plan expenditure that sets new directions for development. There isalso greater discipline and direc-tion under the plan expenditure com-pared to the non-plan expenditure. Since plan allocations (under the five-year plans) are finalised consequent to obtain-ing the approval of theNational Develop-ment Council, the Parliament and the union cabinet, they are sacrosanct and have to be adhered to as a far as possible [Kumar 2008: 79]. So let us examine in detail the allocations under the plan cate-gory. During the last five years, one notices a significant in-crease in plan alloca-tions to education in the union budgets. The expenditure in-creased by 3.4 times from Rs 10,224 crore in 2004-05 to Rs 34,394 crore in 2008-09. But if you look at the annual increases during the last five years, the nearly 20 per cent increase in the 2008-09 budget seems to be the smallest, and the 35 per cent increase over the previous years’ revised estimate the second lowest. In 2005-06 this increased by 47 per cent over the preceding year’s revised estimate; the corresponding ratio was 38 per cent in 2006-07, 23 per cent in the 2007-08 and 38 per cent in 2007-08. Further, education sector also accounts for less than 10 per cent of the total plan expenditure of the union government, though the ratios increased marginally over the years.Expenditure by LevelsPlan allocations to every level of education have been raised in the union budget dur-ing the last five years in nominal prices, as shown in Table 4 (p 51). Significant hikes in allocation to elementary education can be noted in 2005-06 and later; those to secondary and higher education in 2006-07 and later; and those to adult education and technical education only in 2008-09. During the Tenth Plan, allocation to elementary education was raised, but the relative shares of all other levels including secondary, higher general and higher technical, and adult education were re-duced. On the whole, in the Tenth Plan 78 per cent of the total plan expenditure on education was devoted to elementary education, a meagre 6.4 per cent to secondary education, 7.1 per cent to higher education and 5.8 per cent to technical education. Against this background, the allocations in the current annual budget (2008-09) mark a clear shift: allocation to elementary education has been reduced to 63 per cent from around 80 per cent of the total in 2006-07 and 2007-08; allocation to secondary education was doubled from 6.4 per cent in 2007-08 (and the average of the Tenth Plan); the share of higher education was increased by 50 per cent to above 10 per cent, and a similar increase was made in technical education. The relative priority accorded to adult educa-tion has never been high; it remains more or less unchanged at a very low level.Further, annual increases have not been even across all levels of education nor are they steady and smooth over the years at any level of education, as the fig-ures in Table 5 (p 51) show. For example, Table 1: Government (Centre + State) Expenditure on Education(in current prices) Rs Crore Per Cent Per Cent Per Cent of of GDP of Total Social Sector ExpenditureExpenditure2000-01 67,0003.19 11.3 50.82001-02 68,0712.9910.6 49.42002-03 71,2982.9610.3 50.32003-04 75,6072.74 9.6 49.32004-05 84,1112.67 9.8 48.72005-06 96,365 2.69 10.0 47.22006-07RE 119,199 2.88 10.4 46.52007-08RE 133,284 2.84 10.2 45.3RE: revised estimate.Source:Economic Survey 2007-08 and earlier years.Table 2: Expenditure on Education incurred by the Union Government(Plan and Non-Plan) Rs Crore Per Cent Per Cent of of GDP Total Budget2000-01 7,925.2 0.377 2.432001-02 8,037.00.3532.222002-03 9,089.30.3702.202003-04 10,177.50.369 2.162004-05 13,228.70.420 2.662005-06 17,809.60.497 3.522006-07 23,809.60.574 4.092007-08RE 29,588.7 0.630 4.352008-09BE 38,702.9 0.730 5.15RE: revised estimates; BE: budget estimates (in all tables henceforth).Source: Based onUnion Budget 2008-09 and related budget documents of previous years and Economic Survey 2007-08 and earlier years.Table 3: Plan Expenditure on Education of the Union Government Rs Crore Per Cent Increase Per Cent of over the Preceding Year All Sectors2004-05RE 10,224.2 .. 7.73 2005-06RE 15,041.7 47.1 7.322006-07RE 20,745.5 37.9 8.492007-08RE 25,452.4 22.7 8.172007-08BE 28,671.5 38.2 8.972008-09BE 34,393.5 35.1*(20.0**) 9.16** over the budget estimate of the preceding year.* over the revised estimate of the preceding year.Source:Union Budget 2008-09 and earlier years.
INSIGHTEconomic & Political Weekly EPW May 17, 200851there was a negative rate of growth in expenditure on higher education in 2003-04 over the preceding year, followed by a 45 per cent increase in the following year, which in turn was fol-lowed by a modest increase by 4 per cent only in 2005-06. Similar zigzag trends can be noted at all levels of education, but secondary, higher and technical education suffered more, with occasional negative or very low rates of increase. The increase in the allocation to elemen-tary education in the currentyear’s budget has been the lowest. If the current year’s budget allocations are an indication of the trends to come during the Eleventh Plan, one can say that there is going to be a significant shift in relative priorities in education. The pattern of allocation may shift in favour of secondary and higher and higher techni-cal education and away from elementary education. Hopefully the shift will not ad-versely impact elementary education. Further, an important question is: will the significant increases made in the case of secondary and higher and higher techni-cal education in the current budget, perceived as an election year budget, be sustained in the future?Elementary EducationThe plan allocation for elementary educa-tion was raised in the 2008-09 budget by barely 7.3 per cent over the Rs 20,300 crore (RE) in 2007-08. This is in nominal prices. In real prices, the allocation marks a stagnant level, as the rate of infla-tion is estimated to be around 7 per cent. Also, as not-ed, the annual in-crease which was about 50 per cent in 2005-06 and 2006-07 and 20 per cent in 2007-08 has now come down further to single digits. If these trends con-tinue elementary education may get further decreasing amounts in the coming years. There are two major central sche-mes in elementary education. They are the Sarva Shiksha Abhiyan (SSA), launched by the government of India in 2000 as the single largest holistic programme addressing all aspects of ele-mentary education and as a time-bound scheme for realising the goals of univer-salisation of elementary education and the national programme of mid-day meals in schools. The two schemes together account for 97 per cent of the total alloca-tion made for elementary education in 2008-09. They constituted 84 per cent of the Tenth Plan expenditure on elementary education.In the Tenth Plan a total of Rs 26,000 crore was spent on SSA. Rates of utilisa-tion of funds in the SSA seemed to have improved remarkably at the national level: almost all, in fact more than, the approved outlays was fully utilised during the Tenth Plan, as the statistics from the Planning Commission (2007) indicate. But reports of underutilisation of funds under SSA or siphoning of SSA funds are frequently made in several states (Hindustan Times, New Delhi, March 10, 2008). But the beginning of the Eleventh Plan does not mark well for the SSA. For the first time, allocations toSSA have been reduced even in nominal prices, though the amount of reduction is not high. Why is it that the allocation toSSA, the national flagship programme of the union govern-ment has been reduced? This may be because of the changing pattern of fund-ing ofSSA. In the Ninth Plan, when the SSA was launched, the centre met 85 per cent of the expenditure ofSSA and the states 15 per cent. The respective shares were re-duced to 75 and 25 per cent during the Tenth Plan. It was originally expected to further change to 50:50 during the Eleventh Plan. To allow a gradual change, the funding pattern has been revised as 65:35 for the first two years of the Eleventh Plan, 60:40 for the third year, 55:45 for the fourth year and 50:50 in the fifth year of the plan and thereafter. There are, of course, demands for restoring the earlier pattern of 75:25 from several cor-ners, including the Public Accounts Com-mittee of the Parliament (Times of India, March 23, 2008). When the development needs of ele-mentary education are still huge, as re-flected in terms of the number of the habi-tations without having any primary/upper primary schooling facility (estimated at one lakh), the need to upgrade all the Edu-cation Guarantee Scheme (EGS) schools into formal primary schools (in all about 70,000), a large number of out of school children (conservatively estimated to be above seven million), high dropout rates (about 50 per cent at upper primary level), Table 4: Plan Expenditure on Education, by Levels Elementary Secondary Adult Higher Technical Total EducationRs crore (in nominal prices) 2000-01 3,117.4 554.1 108.2 497.6 494.0 4,854.8 2001-02 3,569.2 615.4 174.0 544.7 552.1 5,560.1IX Plan (1997-2002)16,370.0 2,322.7 520.4 2,270.9 2,109.5 24,908.4 2002-03 4,257.6 574.5 213.4 619.1 600.4 6,380.0 2003-04 5,201.0 638.0 231.9 560.4 625.1 7,371.1 2004-05 7,710.2 652.3 236.0 810.7 615.7 10,133.2 2005-06 11,749.3 874.9 241.8 843.6 711.2 14,552.5 2006-07 16,560.0 1,027.2 212.9 1346.5 863.2 20,213.8X Plan (2002-07) 45,478.0 3,766.9 1,136.1 4,180.3 3,415.5 58,650.6 2007-08R 20,304.7 1,635.3 251.0 1888.4 981.5 25,452.4 2008-09B 21,795.0 4,554.0 451.0 3529.5 2,888.5 34,393.5Per cent distribution 2000-01 64.2 11.4 2.2 10.2 10.2 100.0 2001-02 64.2 11.1 3.1 9.8 9.9 100.0IX Plan (1997-2002) 65.7 9.3 2.1 9.1 8.5 100.0 2002-03 66.7 9.0 3.3 9.7 9.4 100.0 2003-04 70.6 8.7 3.1 7.6 8.5 100.02004-05 76.1 6.4 2.3 8.0 6.1 100.0 2005-06 80.7 6.0 1.7 5.8 4.9 100.0 2006-07 81.9 5.1 1.1 6.7 4.3 100.0X Plan (2002-07) 77.5 6.4 1.9 7.1 5.8 100.0 2007-08RE 79.8 6.4 1.0 7.4 3.9 100.0 2008-09BE 63.4 13.2 1.3 10.3 8.4 100.0Sectors such as department of languages, scholarships, book promotion, planning and administration are included in the total.Source:Union Budget 2008-09: Expenditure Budget Vol II and earlier years and documents; andFinancial Statistics of Education during the Eighth, Ninth (1997-2002) and the Tenth (2002-2007) Five-Year Plans.Table 5: Annual Increases (in Nominal Prices) in the Allocation to Various Levels of Education in the Union Budget(in %) Elementary Secondary Higher Technical Total Education2002-03 19.3-6.613.7 8.7 14.72003-04 22.211.0- 48.2 2.244.6-1.537.52005-06 52.434.14.115.543.62006-07 40.917.459.621.438.92007-08RE 22.6 59.2 40.2 13.7 25.92008-09BE 7.3178.586.9194.3 35.1Source: Based on Table 4.
INSIGHTMay 17, 2008 EPW Economic & Political Weekly52a number of schools without adequate classrooms (the backlog is about 6.87 lakh classrooms), teachers, and other infra-structure facilities, etc, and the goals of the Eleventh Plan to improve the quality of education in all primary schools to the level of Kendriya Vidyalayas and to gradually improve the pupil-teacher ratio from 40:1 to 30:1 are all considered, any reduction in allocations to SSA may not be appropriate. Further, we also hear that the govern-ment is keen on introducing the Right to Education Bill (2005) in Parliament soon to make elementary education a funda-mental right, “the surest way of ensuring rapid inclusive growth”, as stated by the prime minister, Manmohan Singh in the 80th annual general body meeting of the Federation of Indian Chambers of Com-merce and Industry on February 15, 2008 (Hindu, February 16, 2008); and the union government might take on all the financial responsibility of the bill which is esti-mated to be as high as Rs 12.5 billion a year ( But the allocations to SSA in the union budget of 2008-09 do not indicate any such empha-sis. In fact, the budget allocations belie all such expectations. The Economic Survey (2007-08), released two weeks after the statement by the prime minister, notes, “The 86th Constitutional Amendment of 2002 led to the inclusion of a new Article 21-A in Part III of the Constitution that made Free and Compulsory Education to all children of 6 to 14 years of age a Fundamental Right.” It further notes, “Pending enactment of a suitable follow-up legislation envisaged in Article 21-A, the 86th Constitutional Amendment has not yet been enforced” (p 249). But it does not sate how long it will be pending. It however, recognises the need for policies and programmes to provide good quality elementary education to all, not because of moral or Constitutional compulsions of enforcing the amendment, but because the country has to honour the commitment to the Millennium Development Goals and Education for All, and in realisation of the commitment made under the National Common Minimum Programme of the pre-sent government. In short, if the budget allocations are taken as an indication, the Right to Education Bill may continue to remain merely a Bill for some more time. The second-most important scheme in elementary education is the mid-day meal scheme, earlier known as “the national programme of nutritional support to pri-mary education”, which was launched in 1995 with the twin objectives of increas-ing enrolment, retention and attendance rates in primary education and simultane-ously improving the nutritional status of schoolgoing children. In 1995 it covered just 3.34 crore children in 3.22 lakh schools. In 2006-07, the number of chil-dren receiving meals was 12 crore in 9.5 lakh schools. This is regarded as the world’s largest school lunch programme. The programme was extended to upper primary classes (VI-VIII) in 3,479 educa-tionally backward blocks in October 2007. This was estimated to increase the cover-age of children by 1.7 crore. One might ex-pect this to have resulted in an increase in the actual (revised) budget expenditure over and above the budget allocation made for 2007-08. But surprisingly, the revised budget expenditure (Rs 6,678 crore) for the mid day meal scheme was less than the budget provision (Rs 7,324 crore). In the current budget proposal, it is to be extended to cover all blocks in the country, i e, to benefit additionally 2.5 crore children, in all to cover 13.9 crore children.1 Will the small increase in allo-cation of resources to the scheme be ade-quate to meet the increasing numbers of children to be covered? On the whole, does the stagnation or even the likely real decline in the alloca-tions to elementary education signal the end of the special priority accorded to elementaryeducation in recent years in allocation of resources?Education CessAn important aspect of budget expendi-ture on elementary education is the source of funds. While most sectors receive funds from the overall budgetary support, elementary education receives substantial resources from a earmarked tax, viz, the education cess. The education cess, introduced in 2004 is a cess levied at the rate of two per cent on all major cen-tral taxes – income tax, corporation tax, excise duties, customs duties, and service tax. The revenue from cess is meant for elementary education. The Prarambhik Shiksha Kosh (PSK) was set up in 2005 as a dedicated non-lapsable fund, with the revenues of the education cess. The Kosh is to fund the two major schemes in elementary educa-tion, viz, the SSA and the noon meals. It is actually expected that these two schemes are largely financed out of gross budget-ary support, and only after exhausting the funds provided by the gross budgetary support, the balance of the expenditure is to be financed from the Kosh. It appears that exactly the opposite is happening. A disproportionately large amount of expenditure onSSA and noon meals is met out of revenues collected from the educa-tion cess. As high as 74 per cent of the expenditure onSSA and the noon meals in 2008-09 is to be met by the Kosh, i e, by the revenues received from education cess, and the balance out of general bud-getary support. The corresponding figure, i e, the share of the Kosh, was 69 per cent in 2007-08. In other words, the two major components of elementary education receive very little resources from general tax and non-tax revenues.A secondary and higher education cess, introduced last year at the rate of one per cent on all major central taxes, addition-ally yielded Rs 1,736 crore in 2007-08 and is likely to yield Rs 1,970 crore in 2008-09. It is likely that this will be used to finance the Scheme for Universal Access and Qual-ity at the Secondary Stage (SUCCESS) for Table 6: Union Government Expenditure on Elementary Education (Rs crore) Sarva Shiksha Mid-day Total AbhiyanMealsElementary Education1997-98 ..1,070.02,234.91998-99 ..1,600.2 2,749.81999-2000 ..1,500.02,852.02000-01 76.51,299.1 3,117.42001-02 499.81,030.33,569.2IX Plan (1997-2002) 576.3 6,499.5 14,523.3 2002-03 1,567.2 1,099.1 4,527.6 2003-04 2,730.6 1,375.0 5,201.0 2004-05 3,239.2 1,588.6 7,710.2 2005-06 7,535.9 3,184.0 11,749.3 2006-07 10,900.4 5,324.4 16,560.0X Plan (2002-07) 25,973.3 12,571.1 45,748.0 2007-08R 13,171.0 6,678.0 20,304.7 2008-09B 13,100.0 8,045.0 21,795.0Total includes other items/schemes/budget heads.Source:Union Budget 2008-09: Expenditure Budget Vol II and earlier years and documents; and Financial Statistics of Education during the Eighth, Ninth (1997-2002) and the Tenth (2002-2007) Five-Year Plans.
INSIGHTEconomic & Political Weekly EPW May 17, 200853which an allocation of Rs 2,230 crore is made in the current year’s budget. Secondary EducationThe Eleventh Plan rightly recognises that in the context of rapidly chang-ing technology and the growth of the knowledge economy, “a mere eight years of elementary education would be grossly inadequate for our young children”. Accordingly, SUCCESS was launched as a centrally sponsored scheme during the Eleventh Plan. The main objective of the scheme is to make secondary education of good quality “available, accessible and af-fordable” to all young students in the age group of 15-16 years, i e, for classes IX and X. Note that it does not include senior sec-ondary level (grades XI-XII), completion of which is necessary for the children to go for higher education. The scheme aims at universal access of secondary education to all students by 2015 and universal reten-tion by 2020. It also sets targets of a gross enrolment ratio of 65 per cent by 2011-12, and a reduction in gender disparity in the enrolment ratio by 5 percentage points, improvement in pupil-teacher ratio to 25:1 and pass percentage rates in board exami-nations at the end of gradesX andXII to 75 per cent [MHRD 2007]. The programme in-volves provision of necessary infrastruc-ture and resources for increasing the ca-pacity of the system, strengthening the existing schools by filling the missing gaps, and provision of extra support for girls, rural children and other weaker sec-tions of the society, viz, scheduled caste (SC)/tribe (ST) children and minorities. It is envisaged as a holistic convergent framework for implementation of various schemes in secondary education, like the SSA in elementary education. An alloca-tion of Rs 1,306 crore was made for the SUCCESS in the last year’s budget, but as the programme is yet to take off, it was not spent. In the current budget, Rs 2,230 crore was allocated to it, which forms nearly half of the total allocation to secondary education sector.In fact, as already noted, secondary education received the biggest hike in budgetary allocations – 1.5 times increase over the budget allocation in 2007-08 and 2.8 times increase over the revised esti-mate! Nearly half the allocation made in 2007-08 was retuned unused. Besides, the SUCCESS and other ongoing programmes/schemes, the current budget has provided for a few important new pro-grammes/schemes. They include establishment of 6,000 new high quality model schools – one in each block and new Jawahar Navodaya Vidya-layas in 20 districts that have large concentration of SCs/STs. The model school programme is a new one and it is expected that the new model schools will serve as a benchmark for excellence in secondary education, and a sum of Rs 650 crore has been allocated for the same. The finance minister has pro-posed in his budget speech an allocation of Rs 130 crore for the special Navodaya Vidyalayas.2 The programme of model schools includes setting up of 3,500 schools by the government (3,000 as Kendriya Vidyalayas and 500 as Navodaya Vidyalayas) and 2,500 schools through public-private partnership. The latter ones, as the Eleventh Plan makes clear, are to be managed and run by involving corporate sector, philan-thropic foundations, endowments, educa-tional trusts and reputed private providers. The special Navodaya Vidyalaya pro-gramme may be promoting equity to some extent, as they will be set up in specially chosen districts, but it has to be noted that they are not necessarily for SCs and STs. More importantly, the new model school programme that includes 2,500 schools to be set up through private-public partner-ship, looks more elitist in nature. Both types of schools – the special Navodayas and the model schools – may suffer from being inequitous, unless special measures are adopted to check elitism and to promote equity and inclusive growth.An important initiative taken by the government in last year’s budget is the National Means-cum-Merit Scholarship scheme for students in gradesIX-XII. A corpus of Rs 3,000 crore was to be built up with an annual allocation of Rs 750 crore for four years. A similar allocation was made last year and it was met from Social Infrastructure Development Fund. In 2008-09 also a similar allocation was pro-posed by the finance min-ister in his speech.3 According to the scheme, one lakh scholarships will be awarded beginning 2008-09 at the rate of Rs 6,000 per year per stu-dent. This is expected to increase and sustain de-mand for secondary edu-cation. However, the scheme is designed not as a scholarship scheme to be administered by the de-partment of education. On the other hand, under the scheme, funds will be placed at the disposal of the State Bank of India to create a corpus, with the yield from corpus utilised to fund the scholarships. Thus the budget proposals for secondary education include those that aim at mas-sive expansion – quantitatively and in qual-ity, and also some that seem to be highly elitist in nature.Vocational education at the secondary level has never received serious attention of the educational planners. The small amount of Rs 20 crore allocated in 2007-08 remained virtually unused. Now an allocation of Rs 37 crore is made in the current year’s budget. But training and skill development are important and the government seems to be concerned about Table 7: Revenues from Education Cess (Rs crore) Education Secondary and Cess Higher Education Cess2004-05RE 5,010 ..2005-06RE 7,492 ..2006-07RE 8,949 ..2007-08BE 12,931 1,7552007-08RE 14,010 1,7362008-09BE 16,133 1,970Source:Union Budget (2008-09): Receipt Budget and earlier years.Table 8: Plan Allocations to Selected Items in Secondary Education*(Rs crore) 2007-08BE 2007-08RE 2008-09BENavodaya Vidyalaya Samiti 710.0 860.0 700.0Kendriya Vidyalaya Sanghathan 300.0 300.0 300.0Information and Communication Technology inSchools 250.0 250.0 300.0Vocational Education 20.0 1.0 37.0National Merit Scholarship (OSC) 120.0 120.0 120.0Special Navodaya Vidyalayas 275.0 0.2 New Model Schools .. .. 650.0Upgradation of Kasturba Gandhi Balika Vidyalaya .. .. 80.0SUCCESS 1,305.91.12,230.0National Merit-cum-Means Scholarships for IX-XII students 0.0 750.0 0.0Total secondary 3,164.0 1,635.3 4,554.0* includes allocations made to north-eastern region.Totals include other items/schemes/budget heads.Source:Union Budget 2008-09: Expenditure Budget Vol II.
INSIGHTMay 17, 2008 EPW Economic & Political Weekly54it, though it is not planned as a part of the education budget.Upgradation of 238 Industrial Training Institutes (ITIs) has been taking place with the assistance from the World Bank. The budget also makes a provision of Rs 750 crore for the upgradation of other 300 and odd more institutes in 2008-09. But the upgradation programme is taken up as a public-private partnership scheme with the collaboration of partners in industry. Using the same model of public-private partnership, the government intends to set up a Skill Development Corporation, a non-profit corporation to carry on skill de-velopment mission and to launch a world-class skill development programme. It is expected to garner Rs 15,000 crore as cap-ital from central and state governments, the public and private sectors, and bilateral and multilateral sources. The current budget provides for Rs 1,000 crore as gov-ernment’s equity in the corporation. It is too early to comment on how the public-private partnership model will work in skill development. Alternatively the gov-ernment could have thought of setting up a Skill Development Fund, like the PSK, with contributions from various public and private sources, and as a non- relapsable fund, to be managed by the government that would finance all skill development programmes in the country.It is important to note in this context that we need three distinct types of skill development programmes – a major one for the “common people” or for the people in the unorganised sector who need nor-mal vocational, technical and other skills for earning basic livelihood and to come out of poverty, one to meet the needs of the “normal” formal sector, and another for upgradation and reskilling the man-power required for the emerging “knowl-edge economy”, i e, to produce knowledge workers in high paying domestic and even foreign markets such asIT markets. Poli-cies and methods of funding have to be different for the three types. Generous public funding is critical for the first two types of programmes.Higher EducationThere is a significant hike in the alloca-tions to higher education in 2008-09 compared to the revised estimates for 2007-08. In last year’s budget an allo-cation was made for Rs 6,483 crore for higher education. A large part of the allo-cation could not be used, as a significant amount was meant for additional expan-sion of the system by 54 per cent, antici-pated in view of the reservations for other backward classes in central higher educa-tional institutions, which was stayed by the Supreme Court. So only 50 per cent of the allocation was utilised and as much as Rs 3,221 crore was returned. Though the issue of reservations is not referred to, major expansion of the higher educa-tion system is planned in the current year (and also during the Eleventh Plan) and the allocation was more than doubled in the current year’s budget over the revised estimates for 2007-08. It is important to note that both general higher education and technical higher education have been assigned substantially increased allocations in the current budget, as shown in Table 9. Plan allocation to the University Grants Commission has been nearly doubled; allocation to the All India Council for Technical Education has been raised by 2.4 times; the allocation for the Indian Institutes of Management doubled and for the Indian Institutes of Techno-logyand also the Indian Institute of Sciences trebled. These hikes are over the revised esti-mates for 2007-08. In fact, if we compare the allocations in the current year with the budget estimates of the allocations made in 2007-08, we note that the increase has been made only in case of allocation for UGC (and total general higher education); and allocations to technical education have been considerably less than the budget allocations made in the previous year.4 A substantial proportion of the increase in the plan allocation to the UGC might be meant for establishing 16 new central uni-versities in each of the states where there exists no central university as of now. An amount of Rs 50 crore is allocated for set-ting up three new Indian Institutes of Technology (IITs) – one each in Andhra Pradesh, Bihar and Rajasthan. Increased allocation for technical education includes allocation for two Indian Institutes of Sci-ence for Education and Research (IISER) at Bhopal and Thiruvananthapuram and two Schools of Planning and Architecture at Bhopal and Viajaywada. During the Eleventh Plan, in all, it is planned to establish 30 new central universities in-cluding 14 world class universities, as many as eight new IITs, seven new Indian Institutes of Management, 10 new National Institutes of Technology, three IISER, 20 Indian Institutes of Information Technology and two Schools of Planning and Architecture. This indeed marks a massive expansion.Though the higher education system does require massive expansion, the expansion of both general as well as techni-cal higher education needs to be carefully planned. The expansion is long overdue. But will it be sustainable? Problems of shortage of high quality faculty are already being felt in the existing institu-tions. Long periods of underfunding of higher education, virtual ban on recruit-ment of faculty and other similar meas-ures have resulted in accumulation of such problems. All of a sudden, when funds are made available, it may be possible to set up many central universities and techni-cal institutes, but it may not be easy to staff these institutions with high quality faculty, unless new and innovative Table 9: Allocations to Selected Institutions/Programmes in Higher Education in the Union Budget(Rs crore) Plan Non-Plan Total 2007-08BE 2007-08RE 2008-09BE 2007-08BE 2007-08RE 2008-09BE 2007-08BE2007-08RE2008-09BEUGC 2,124.8 1,633.1 3,095.5 1,638.8 1,948.9 2,009.4 3,763.5 3,581.9 5,104.9IITs 1,111.7 335.3 1,020.7 442.0490.0 525.0 1,553.7 825.3 1,545.7New IITs 80.0 0.0 50.0 .. .. .. 80.0 0.0 50.0IIMs 196.0 40.0130.0 87.2 86.0 91.0283.2126.0221.0AICTE 892.0297.4 718.0 234.1 263.0 285.0 1,126.1 560.4 1,003.0Total general 2,910.0 1,958.4 3,946.0 1,755.0 2,072.7 2,137.7 4,665.1 4031.1 6,083.7Total technical 2,929.0 981.5 2,888.5 941.0 1,020.4 1,074.7 3,870.0 2001.9 3,963.3Grand total (dept of higher education) 6,483.0 3,262.0 7,600.0 2,729.0 3,136.0 3,259.4 9,212.0 6,398.0 10,859.4Source:Union Budget 2008-09: Expenditure Budget, Vol II .
INSIGHTEconomic & Political Weekly EPW May 17, 200855Table 11: Budget Allocations to Scholarships to Weaker Sections(Rs crore) 2007-08BE 2007-08RE 2008-09BEScheduled castes Pre-matric scholarships 611.0 811.0 731.0Post-matric scholarships 25.0 7.5 54.0Total 636.0 818.5 785.0Scheduled tribes Pre-matric scholarships 163.2 162.0 195.0Backward castes Pre-matric scholarships 22.5 22.5 27.0Post-matric scholarships 90.8 110.8 120.8Total 113.3 133.3 147.8Minorities Pre-matric scholarships 72.0 9.0 71.9Post-matric scholarships 90.0 54.0 89.9Total 162.063.0161.8Grand total 1,074.4 1,176.8 1,289.6Source:Union Budget 2008-09: Expenditure Budget II.methods are thought of to attract good faculty. Otherwise there is a danger of planning and designing these new institu-tions on a very small scale, with a very small number of faculty and student num-bers, offering a few specialised, if not market-oriented, programmes, as a result of which they may turn out to be privi-leged and elite institutions. Alternatively, these institutions will be allowed to grow into large size in terms of student numbers but with small faculty, or large numbers of low quality faculty. Both are serious dangers that need to be avoided. The ques-tion of sustainability or their “viability” assumes importance, as the location of the central universities and other institutes, including world class universities, it ap-pears, is being decided more on political considerations, rather than on educational and other relevant scientific and objective considerations. Further, all the central universities and other central institutes of higher education, though being set up on regional considerations, need to be de-signed to work truly as national institu-tions of higher education, with students and faculty drawn from all parts of the country and all socio-economic strata, truly representing national diversity, an essential characteristic feature of good national institutions of higher education. Lastly, public-private partnership models are being thought of in setting up some of these institutions, but such modes do not necessarily work in the area of education for the benefit of the larger society.ScholarshipsAn important budget item which receives very little public attention, partly because of the insignificant amounts of resources allocated, refers to the national schol-arship scheme. The scheme consists of (i) Scholarships for Talented Children from Rural Areas, and (ii) National Merit Scholarship Scheme. In fact, the pattern of the budget allocations and the pattern of utilisation of the funds available for the scheme, as shown in Table 10, looked like a travesty of the very scheme, that is expected actually to promote both equity in education and reward merit. Insignificantly small amounts, often a few lakhs of rupees were allocated, and a very small proportion of those small amounts were utilised. The scheme meant for the talented children in rural areas seems to have been discontinued after 2004-05, and the merit scholarship scheme dis-continued in 2006-07, as no more plan allocations were made in subsequent years. After winding up both the schemes, a new Scholarship Scheme for College and University Students was launched in 2007-08 with an allocation of Rs 12.60 crore, which was raised to Rs 45 crore in the current budget – not substan-tially larger than the allocations to the earlier scheme.The scheme aims at providing scholar-ships to at least 2 per cent of the students passing out of schools every year for pur-suing higher education. While restructur-ing of the scholarship schemes with increased budget outlays and hopefully better execution needs to be welcomed, it is too early to comment on the new scheme; one only hopes that it will not be administered like the earlier schemes. The scheme needs to be strengthened in such a way that no meritorious student feels financially constrained to go for higher education. In fact, the attempt should be to see that every meritorious and needy study is necessarily guaranteed of finan-cial assistance from the government for pursuing higher education.There are some important ongoing schemes of pre-and post-matriculation scholarship for SCs,STs, other backward classes and minorities, which are admin-istered by the ministries of social justice and empowerment, tribal affairs and minority affairs (Table 11). The allo-cations do not show any significantly different pattern compared to the budget estimates in 2007-08, though there are some significant increases over the revised estimates, particularly in the case of minorities.ConclusionsThe allocations to education in the union budget 2008-09 have to been seen in the backdrop of the Eleventh Plan, which is about to be finalised, the recommenda-tions of the National Knowledge Commis-sion, which seem to have been endorsed by the government, and the political situation on the eve of the general elec-tions. The budget allocation to education sector in budget 2008-09 marks, in nomi-nal prices, a 35 per cent increase over the previous year’s revised estimates of budg-et expenditure. A close examination of the budget allocations indicates that this is not particularly high, compared to annual increases in earlier years. Nevertheless Table 10: Expenditure on Scholarships in the Union Budgets (Rs crore) National Scholarship Scheme (Merit Scholarships) Scholarships for Talented Children in Rural Areas Expenditure Approved Expenditure as Per Cent Expenditure Approved Outlay Expenditure as Per Cent Outlay of Approved Outlay of Approved Outlay1997-98 0.450.7560.00.200.4050.01998-99 0.450.7560.00.390.4097.51999-2000 0.250.7533.3 0.790.40197.52000-01 0.272.0013.50.380.4095.02001-02 Plan (1997-2002) 1.46 6.25 23.4 1.77 2.60 68.12002-03 0.304.007.50.423.0014.02005-06 8.3611.0076.00.000.00 ..2006-07 7.1713.0055.20.000.00 ..X Plan (2002-07) 16.21 38.00 42.6 0.45 16.00 2.8Source: Financial Statistics of Education during the Eighth, Ninth (1997-2002) and the Tenth (2002-2007) Five-Year Plans.

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