Increasing Public Expenditure on Education

• Quite apart from its social and economic effects, education must be seen as a basic human right, which is recognised in the Universal Declaration on Human Rights but which has still not been made available to all citizens of India. In fact, the government of India has still failed to meet the commitment made in the Constitution at the time of constituting the Republic more than five decades ago, of providing universal primary education to all our children.
• Not only is an unacceptably large proportion of our population still illiterate, but the gaps in provision of education are huge at all levels. There is major excess demand for quality public education, ranging from pre-school and elementary schooling to higher education, technical training and professional courses.
• It is well known and now widely accepted that investment in education is critically important for the future economic growth and social cohesiveness of society. Many of the potential payoffs to society from various types of public investment in education are not immediately apparent but are nevertheless very important. (For example, the much hyped software boom itself reflects at least partly the earlier public investment in IITs.) Further, there are huge advantages to society in having the general level of education in society improve, not only because the quality of the workforce improves, but because various other aspects such as health, nutrition and sanitation are positively affected, and also because educated citizens can be more effective participants in a democratic civil society.
• It is obvious in theory and evident in practice that this is one area in which relying on private provision will lead to very substantial under-provision and socially suboptimal outcomes, because the social returns to education far outweigh the private returns. Relying on private profitability to determine investment in this area, even in higher education, is socially inefficient and does not ensure future knowledge needs, which must necessarily be determined not just according to current market considerations but through some sort of plan-based assessment of the likely future requirements of society. In any case, profit-based provision of education typically excludes a major part of the population and does not ensure either merit or adequate representation by gender, class or social group, making in undemocratic in content. This is not to deny the usefulness of private investment, but simply to state that this cannot replace public expenditure in this area.
• While public spending of education typically tends to increase with per capita GDP, this is not the inevitable pattern and can be influenced by public policy attitudes. In fact several developing countries that have made very substantial public investment in education, have subsequently reaped the benefits in terms of faster and more broad-based growth. Thus, in some countries of East Asia, public spending on education had increased to as much as 8-10 per cent of GDP during the 1980s and first half of the 1990s, allowing these countries not only to improve the quality of their workforce dramatically, but also subsequently to take advantage of this to promote economic activities that involve moving up the international value chain.

• the immediate need to fulfil certain constitutional and legal norms and obligations, including for child care (Supreme Court ICDS judgements), universal access to education (Right to Schooling legislation) and school meals provision (Supreme Court judgements), etc.
• the assessment of physical requirement for education infrastructure based on existing gaps, such as ensuring pre-primary and primary schools in every village, access to secondary schools within 5 km of habitation, etc.
• the projection of changing demographic structure and the consequent increase in age-cohorts requiring schooling at various levels.
• the need to ensure adequate access to higher education to reach at least the minimum norm of 8 per cent of population of relevant age group (15-24 years), and preferably the international norm of 15 per cent (the current ratio in India is 3 per cent).
• the perceived social requirement for various types of technical and professional skills in the country in future.
• the need to ensure at least some world class institutions of higher education and learning with international quality of physical and intellectual resources.

Legal obligations of the Government

The most pressing immediate legal obligation relates to providing mid-day meals in primary schools. The cost of this at existing rates, for 2006-07 has been estimated at Rs. 3452 crore. However, this is based on the existing number of schools and does not take into account either the need to increase the number of schools and school-going children so as to provide education for all, or the need to repay arrears to FCI for past food disbursement. Therefore the actual number may be closer to Rs. 5000 crore required per annum at current prices.

The need to ensure universal schooling facilities at least at elementary level, followed by eventual fulfilment of the norm of 9 years schooling as envisaged in the Right to Education Bill, will require very large increases in physical infrastructure are described below. In addition there will be need for substantial increase in teaching staff and making available pedagogic material, newly developed and in translation. Currently only 56 per cent of children in the age group 5-9 years are attending school, according to the Census. Ensuring that all such children are in school will require a near doubling of existing teaching staff. Since in any case existing schools are understaffed and teacher-student ratios are very low, an actual doubling of teaching staff may be required to meet the national norm of 1 teacher per 40 students that GoI has declared to UNESCO. In addition, in several states, there is a dual system of elementary education, with ''parallel schools'' operating under Sarva Shiksha Abhiyan and similar schemes, under which teachers are not paid salaries but ''honorariums'' at much lower rates. Bringing the remuneration for such teachers into line with other teachers will require further allocation for salaries. Assuming that salary costs are currently around 80 per cent of revenue expenditure of the education departments, this will imply a doubling (in constant price terms) within 5 years.

This means that revenue expenditure will have to increase by at least the amounts described in Table 3 in order to meet the legal obligations of the Central Government. (Since 0-4 years and 5-9 years both amount to 11.3 per cent of population according to Census 2001, there is no estimated increase in the number of elementary school age children over the XIth Plan period.) This means that around 80 per cent of the projected increase in revenue expenditure will have to cater to meeting the legal requirements of the Government regarding primary schooling, leaving only 20 per cent of the increase for secondary, higher and technical education.

It should be noted that other concurrent costs of teaching have not been included in this, such as teaching material, running expenses of schools, etc., and that this would imply a substantially larger amount of revenue expenditure. Further, there would be additional costs in terms of teacher training etc., which are required to ensure quality education. This suggests that even raising total public expenditure on education to 6 per cent of GDP over the XIth Plan would still leave some gaps in provision of universal schooling and in quality of education (which is certainly affected by resources even if resources are not the only factor).

Some estimates of physical need for education infrastructure
If we assume that the entire population of children between the ages 5 to 14 years should be in school by the end of the XIth Plan, this creates a minimum need for physical infrastructure. Accordingly the financial requirement is estimated in Table 4.

is apparent that just meeting this basic requirement would cover nearly half of the projected increase in capital expenditure over the XIth Plan period.. There is the further issue that many rural schools are situated in distant places which reduce the access of rural children. According to the NSS 58th Round, around 20 per cent of villages do not have pre-primary facilities even within 2 km of the village, and 12 per cent do not have primary schools within 2 km. This is an especially important issue for girl children, which makes the physical requirement for more school even greater.

All this has still left out the issue of physical requirement for secondary education and for institutions of higher learning, which will be even larger than currently because of the change in demographic structure. This will imply additional capital and revenue expenditure to the tune of at least 2 per cent of GDP over the XIth Plan period, despite the fact that most of the projected amount can easily be swallowed up by the requirements of elementary education.