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The Fiscal Tool for Secondary Education Reform

imparting to its readers a sense of the Indian national movement as an internally connected (however loosely), pan-Indian organic political phenomenon. Instead the volume gives the impression of a multitude of anti-imperialist struggles launched in different parts of the country in which the local grievances and spontaneity played the most important role. These struggles are seen to be connected to each other because they happened to be fought against the same enemy, the British government. That these struggles may have had an all- India apex; were fostered by a set of ideas and an ideology; that there was an organisation with a leadership which had a sense of strategy, are all ideas that seem very alien to the volume under review. It succeeds in highlighting the









the world of work or the higher stage of

The Fiscal Tool for Secondary

learning. At a time when the country is resolved

Education Reform
to universalise elementary education, it has to wake up to the call of expanding secondary education also. To put it differ-Manabi Majumdar ently, the country should not be forced to

n a commuter train we met a woman on her arduous journey back home from work as a domestic help in the city. Unlettered though this woman was, she was working hard to e nable her daughter complete school. “My daughter’s passing out of school successfully (‘one pass’ as she put it) is all we want”, she said resolutely. This mother’s choose between universal elementary education and extensive secondary educa-

Financing of Secondary Education in India

edited by Jandhyala B G Tilak (Delhi: Shipra Publications), tion. On the contrary, the twain has to be 2008; pp 392, Rs 750.

pursued simultaneously and not sequen

pledge distinctly echoes a widely held under standing among scholars that secondary schooling is a minimum level of learning and skill training, a kind of an “entry pass”, required to enter either

june 27, 2009

tially, pledging the finances required. By the international standard and even in comparison with a number of developing countries, India’s record in secondary school participation is scarcely satisfactory. This average picture, of course,

vol xliv nos 26 & 27 Economic & Political Weekly


smoothes over significant regional variations in this respect between, say, the educationally active states in the southern and western parts of India (with near universal elementary education and fast expanding secondary school sector) and the educationally dormant states in the north and the east, struggling to spread elementary education, let alone secondary.

Grants-in-Aid Practice

Historical, institutional and socio- economic forces, in short “state-effects”, account for such differences in high school participation and completion. One important aspect of such interstate specificities could be traced to the state-specific policies and practices in funding secondary education that work to either energise or enervate the school education sector. The book under review deals with this relatively understudied topic, with a particular focus on the policy of grants-in-aid to private secondary schools. That public e xpenditure on education is more than a matter of public finance and public administration, that it is about political competition, manoeuvre and institutional practice around release and utilisation of funds, and more generally, that it is about using the fiscal tool for egalitarian education r eforms are some of the insights that r emain implicit in the various essays i ncluded in the volume, that could have been articulated a little more explicitly, as we try to explain here.

The book provides copious details and statistics on financing of secondary education, in particular on the policy and practice of grants-in-aid, in a dozen states from all the regions of the country, namely, Andhra Pradesh, Bihar, Delhi, Goa, G ujarat, Karnataka, Kerala, Maharashtra, Orissa, Punjab, Rajasthan and Tamil Nadu. Notably, some of these study states such as Kerala, Tamil Nadu, Maharashtra and Goa – the states that have nearly universalised elementary education – are also expanding the secondary education sector, with solid public support behind it judged in terms of public expenditure on government schools and grants to local body and private-aided schools. To go back in his tory, in these regions the impetus for the spread of education in society first came via the educational initiatives undertaken by the missionaries and various com munity organisations. These private education activists arguably had some kind of a public purpose and vision in mind. Their primary aim was to educate their own community members and to encourage community participation in educational development. In the face of financial d ifficulties, eventually they sought public financial assistance in the form of gov ernmental grants. In return, they agreed to operate under various regulatory norms, including those relating to r educed student fees and the teachers’ security of tenure and decent salary. For historical reasons, therefore, in several parts of the country government-aided privately m anaged schools were major actors at the level of secondary education, at least u ntil recently. For example, to quote from the study in the volume on secondary e ducation in the state of Kerala by George et al:

Due to historical reasons, private aided schools occupy a pre-eminent position among the schools in Kerala. This situation has come about largely as a result of the liberal grants-in-aid policies followed by the State. ….a legacy of the policy followed by the erstwhile Travancore and Cochin States. ….the initiative for spreading education in Kerala often came from Christian missionaries from the West, local parishes and community organisations. The state was largely responding to these initiatives (p 96).

A number of essays in the volume mention several positive upshots of the grantsin-aid scheme (see, chapters on Goa, K arnataka, Kerala, Maharashtra and P unjab, for example). To quote the Kerala study once more:

The grants-in-aid system and government regulations that followed helped to prevent many malpractices of the private managements. For instance, the introduction of direct payments ensured that teachers in private schools are paid salaries fixed by the government. Prior to the direct payment system, many managers did not pay full salaries to the teachers though they obtained receipts from them for the full amounts. The establishment of parity in pay and service conditions between private aided school teachers and the government school teachers improved the lot of the former. Government regulations backed by strong teachers’ unions ensured job security (p 94).

Negative Fallouts

However, most of the contributors, at once, point out several negative fallouts of the system of governmental grants to private schools. It appears that such a practice is a contradictory resource at best, not a straightforwardly positive or benign fiscal tool for school reforms. For instance, the robust grants-in-aid policy in Kerala has also given rise to a number of adverse effects. Geroge et al candidly observe:

Worst practices of corruption, nepotism and communalisation in teachers’ appointments have crept into the system of appointment of teachers by most of the aided private schools…Obviously, the quality of teachers suffers as the most eligible candidates are not the ones selected as teachers (pp 94-95).

One important observation that several contributors make concerns the need to make funding conditional upon school performance (Panchamukhi et al, George et al, Muzammil, for example). Talking about how private providers in Kerala were made accountable in the past, George et al claim

Grants-in-aid policies of the governments of the pre-independence period had several positive features…[the government] had not underwritten the total costs; it always had matching provisions…there were also attempts to target the grants to achieve the state’s educational priorities. For instance, efforts were made linking the grants to attendance of students. …especially to increase the enrolment of students belonging to depressed castes as also girl students. ...but the present grants-in-aid policies do not have any specific targets. They do not link grants with any type of performance indicators. They also do not have any matching provisions (pp 96-97).

Similarly, the Karnataka study asserts:

Under the grants-in-aid rule, the private schools are allowed to directly recruit teachers subject to government approval which indirectly sometimes allows the management to seek donations from the person concerned for getting appointment….The GIA policy should be oriented more towards transparency and accountability rather than just of sanctioning the grant in a routine manner. The grant should be performancelinked…(pp 136-37).

Underlying Issues

Also, in his study of school finances in U ttar Pradesh, Muzammil calls for a move to restructure the grants-in-aid criteria for greater efficiency in school education in the state thus (p 348),

A modified grant structure is desirable which would relate grant levels to various school performance indicators…a more

Economic & Political Weekly

june 27, 2009 vol xliv nos 26 & 27


rational grant structure could be a policy correction that has potentially the biggest pay-off in terms of improved cost-efficiency in education.

It is well to point out here that underlying the issues of funds-performance linkage, efficiency and rationalisation of the grants scheme, etc, is the first-order question of democratic accountability or its lack in matters of funds utilisation. Simply put, is public funding for private schools really democratic? By the same token, is public spending on government schools democratic and equity-enhancing? There is no guarantee that the latter will necessarily be the case. In the case of aided private schools too what is disconcerting, and several contributors have implicitly suggested so, is the lack of transparency and accountability on the part of teaching and non-teaching staff supported by powerful unions as well as school managers and their associations who strongly resist any public scrutiny of their right to appoint teachers.

George et al claim, “….to abolish the widespread corruption [in aided schools], the ideal solution will be to leave the selection of teachers in aided schools in the Public Service Commission” (p 97), as it is done, they point out, in the case of teachers in government schools. It is apt to mention in this connection that in West Bengal teachers in private aided schools are selected by an autonomous body called the School Service Commission and those in government schools are recruited by the Public Service Commission. It is, however, often alleged that huge sums of money change hands during teacher appointment in both types of schools and that market prices of teaching positions are a matter of common knowledge. Also, the influence of political parties in teacher appointment cannot be ruled out.

The authors of the Kerala study acknowledge that teacher unions (in both aided and government schools) are affiliated to political parties; political parties also represent the interests of school managers. Hence, the dubious practices of teacher appointment in aided schools that seem to be under the grip of private p atronage may, under the reformed institutional dispensation, still continue to languish under party patronage, unless democratic checks and balances are on constant vigil.

Another related issue is whether finances act as a tool for egalitarian school reforms. In other words, both the quantum of grant and its equity potential are matters of c oncern. So, one certainly agrees with the editor’s view that the unsatisfactory situation in secondary education can be traced to the inadequate public expenditure on secondary education. But then one feels compelled to push the enquiry further to raise questions about equity in public spending – between schools in different sectors (government and private) and in different regions (depressed versus prosperous areas).

Indeed, a number of contributors insist on coherent state-level policies that allow a fair distribution of public resources b etween government, local body and g overnment-aided private schools. In some states the distribution has been found skewed in favour of private schools and at the cost of government schools. The editor describes this phenomenon as “public pauperisation and private enrichment”. It is important to look for appropriate grants-in-aid schemes that correct this imbalance. But is the blanket roll back of governmental grants to erstwhile aided schools – the emergent trend under the current neoliberal policy climate – the most equity-enhancing fiscal response? Some scholars doubt that especially in view of the fast growth of feecharging private schools – a phenomenon described as “state-sponsored privatisation”. In other words, the space that is being created at the secondary level by the stagnating aided school sector is often being filled up not by an expanding government school s ector, but by (expensive or low-quality “budget”) private schools, creating fresh inequalities.

For example, the study on Andhra Pradesh by Reddy and Reddy states,

Within the private sector the aided institutions accounted for major share till 1980s but declined significantly in the last decade. On the other hand, private unaided institutions increased significantly in secondary education….The government has been trying to reduce the burden of funding the private aided schools by methods like not filling/delaying the recruitment to aided posts and reducing the maintenance grant…This may be one of the important factors for the fast growth of private unaided schools in the state (pp 28-29).


So in the discussions on financing of secondary education, one of the central concerns has to be whether aided schools come to the aid of children and adolescents from socio-economically underprivileged families. Such a possibility cannot be entirely ruled out. For example, the study on Maharashtra by Kamdar argues,

It appears that there is a potential for effective targeting of grants-in-aid to secondary education. However, equity considerations need to be given due importance so that the real incomes of the lower classes, availing of these benefits, are not adversely affected (p 170).

Similarly, the Karnataka study asserts (p 136), “The nature of the grant given to a school should consider the location of the school and social and economic background…of the students of such school”.

The geographical location of a school could be an important input for decisions on educational investment, as it is often a marker of socio-economic disadvantage too. Sometimes an entire area may be excluded from the governmental fiscal net. The essays in the volume deal with the a verage scenario of school financing, to the relative neglect of the fact that within the same state, district or block boundaries, funds and grants may sometimes disproportionately favour privileged neighbourhoods at the expense of the more depressed ones. To correct this imbalance, too, the fiscal tool has to be used in such a manner that there is differential spending in favour of the special educational needs and priorities of poorer regions.

In other words, deprived areas and groups must receive more than per capita share of educational resources, if equality of opportunity were to be granted. There is an urgent need to embed the discussion on grants-in-aid in our country within the larger debate on democratic competition over educational investment. Parallely, our research needs to assess the quantum of additional public spending (including grant) in favour of the traditionally disadvantaged groups that would be required to level the educational playing field.


june 27, 2009 vol xliv nos 26 & 27

Economic & Political Weekly

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