Efficiency Expenditure On Indian Education System

Published Date: 02 Nov 2017

Submitted by

-Sumit Mulchandani(10BCE0087)

- Puneet Garg(10BCE0095)

-Nehal agarwal (10BCE0202)

-Saptarshi Chakraborty (10BCE0216)

-Swapnil Saurav(10BCE0223)

-Arjun Moudgil (10BCE0406)

SCHOOL OF ADVANCED SCIENCES

April 2013

Table of Content

Chapter Page No.

Abstract 3

Introduction 3

Indian Education Programs and Progress 4

India and World 6

Theoretical Framework 7

Higher Education System in India 7

Mapping the growth in Higher education 8

Concerns arising out of the growth pattern 8

Expenditure on higher education in India 9

Addressing the challenges in education expenditure 9

Conclusion 11

References 11

Abstract

This paper deals with efficiency of the big bucks which is spent on the Indian education system. This paper investigates the public spending done on education in three stages of education: primary, secondary and higher education. India has made commitment to millennium developmental goal (MDGs) to universalize its primary education system. It checks the controlling factors such as per capita income, student teacher ratio. We find that primary educational spending has a negligible impact on enrolment rates, primary school transition rates, and performance of students on exams. Instead, states with greater proportions of private primary schools are found to have consistently better outcomes. Higher per capita income is also correlated with some improved performance measures. Reducing the student-teacher ratio has no effect, a phenomenon possibly explained by rampant teacher absenteeism and lack of teacher motivation. Evidence from this study indicates that policymakers should determine how to achieve a more efficient and equitable allocation of educational funds and seek alternatives to improve the quality of primary education.

Keywords

MDG, Education System, per capita income, student teacher ratio

Introduction

Education is the cornerstone of economic growth and social development. It creates greater social cohesion and a strengthened foundation for democracy. At the aggregate level, a better-educated workforce enhances a nation’s stock of human capital, which is crucial for increased productivity and economic development [1,2,3]. From an economic point, education is associated with high rates of return, both private and social. Indian Constitution made a commitment to make primary and middle education free to children (age 6-14) in 1960 which is still to be implemented fully owing to scarce allocation of resources, political and social reasons. India has over a third of the world’s children(6–11 year olds) out of school—around 40 million(UNESCO, 2003). Six states of India account for three-fourths of its children out of school (Andhra Pradesh, Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh and West Bengal). A concerted effort to mobilize global efforts and resources to help developing countries was formalized through the endorsement of the Millennium Development Goals (MDGs) by 189 countries of the United Nations [4]. MDG specifically incorporates primary education by stating the following: "Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling."[5] Achieving this goal will be an enormously challenging task—given the fiscal crisis of the state. Education has always been regarded as one of the leading determinants of economic growth. By promoting basic literacy and numeracy, primary education provides the foundation for secondary and tertiary education, allowing for a more knowledgeable and productive force. According to World Bank studies, primary education also has a direct and positive impact on future earnings and farmer productivity, and bestows significant health and poverty alleviation benefits (IEG, 2006). India has an average literacy level of just 61% and the largest absolute number of primary school age children out of school [6]. The country is also home to more than a third of the global poor [7]. Poor people facing credit market constraints incur higher private costs of sending their children to school. They can’t afford to educate their children unless schooling is subsidized (IEG, 2006). Thus, government funding of primary education is crucial and necessary for greater nationwide enrolment. As universal primary education was made a fundamental right in 2003, the Indian government provides free primary schooling through its flagship program for the universalization of primary education, Sarva Shiksha Abhiyan. In a cross-sectional study of 50 developing countries [8], use OLS and Two Stage Least Squares (2SLS) to determine the overall level of public spending and intra-sectorial allocation. They use educational attainment measures like enrolment rates in primary and secondary school, persistence through Grade 4, and primary school drop-out rates. The 2SLS technique is used primarily to address the problem of reverse causality. For instance, higher spending on primary education may have a positive effect on enrolment, but a higher demand for primary education, reflected in higher enrolment rates, may also provide a push for higher spending. Most spending and other data are for 1993-1994; the expenditure data, in general, exclude local government spending. Overall, the literature on public expenditure on education shows a mixed bag of results on educational spending and outcomes both within and across countries. Theoretically, there are several reasons why analysis may fail to detect a relationship between spending on primary education and improved outcomes. Parental investments of time or money, and a child’s intrinsic motivation may be more influential than the effect of public expenditure [9]. Also, higher expenditures may not translate into better educational outcomes in the absence of good governance or if the expenditures are used ineffectively [10]. For increased spending to improve primary school attainment, it must be accompanied by good governance, detailed monitoring and evaluation projects, and supply-side interventions such as building new schools and classrooms within easy walking distance. Shifting educational responsibilities to lower and more localized levels, such as district level school-based management, can also improve educational outcomes. Activating community support and involving parent in primary school management can be advantageous as well.

Indian Education Programs and Progress

Educational provision in India, especially at the primary, intermediate and secondary levels, is largely determined by the extent and quality of targeted governmental spending. The central government and individual state governments share the responsibility of funding public education. State governments further pass down most of the educational planning and expenditure to the district-level; the extent of locally transferred responsibility differs by states. The three stages of school-based education are primary, intermediate (middle school), and secondary (high school). Primary school deals with children of ages six to eleven, categorized into grades one to five. Intermediate students of age group eleven to fourteen are categorized into classes six to eight, and high school students between age group fourteen to seventeen are enrolled from class nine to twelve. Higher education includes colleges, universities and technical schools. Table 1 shows that state governments contribute more than three fourths of the total revenue expenditure on education in the country.

Center States / UT (Union Territories) Total

Expenditure 311.7 1012.8 1324.5

( in billions)

Share with respect to

total (%) 23.5 76.5 100

Table 1: Expenditure on education

Source: Government of India, Ministry of Human Resource Development

Despite the evident political commitment to education, we can see that public expenditure on different education sub-sectors varies significantly between states. This phenomenon occurs because the states have diverse social and political environments, and are at different levels of development. Also, since decentralization affects each state in a different way, they accordingly allocate their budgets to the level of education that they deem the most important for overall development. A striking similarity is that most states spend more on primary education than secondary or tertiary education. This suggests that there is a shared understanding that there are increased social rates of return associated with primary education, which in turn is aligned to the MDG of providing universal primary education. However, there are still wide inter-state disparities in the gross enrolment rate (GER), which is defined as the total number of students registered in an education level belonging in the specific age group, as a percentage of the population in that age group. An important goal of the National Policy of Education is to reduce the gap in GER across states.

C:\Users\insight\Desktop\paper\india-outline-map.png

The above map shows the wide geographic variation in GER in India. It shows very significant variation across regions. In Bihar it is 5.7 whereas it is 15.1 in Uttaranchal. In the union territories it ranges from a low of 1.9 in Daman Diu to a high of 33.2 in Delhi This map shows how some states lack an efficient education policy and is the main reason behind their backwardness.

India and World

India’s educational achievements have had mixed success. On the down side, India has 46 per cent of the world’s illiterates, and is home to a high proportion of the world’s out-of-school children and youth. Absenteeism and low accountability of teachers is also perceived as a major problem across the country [12]. On a more positive note, it has made encouraging recent progress in raising schooling participation. Table 2 presents India’s adult male and female literacy rates alongside equivalent figures for its regional neighbours, as well as for countries in the BRIC grouping (Brazil, Russian Federation, India and China) – countries with which India is increasingly compared. While India does well compared to Bangladesh and Pakistan, it falls substantially behind all the other BRIC countries and Sri Lanka, and is also behind the average for developing countries. Indeed, it is striking that its overall adult literacy rate is similar to – and female adult literacy rate lower than – that of Sub- Saharan Africa. India’s male and female adult literacy rates are around 22 percent and 36.5 percent lower than those of China, another emerging "superpower". Further, India lags behind the average global literacy rate by a little more than 21%.

Adult literacy rates (15+ years old)

Total Male Female

Bangladesh 42.6 51.7 33.1

Pakistan 49.9 63.0 36.0

Sri Lanka 90.7 92.3 89.1

India 61.0 73.4 47.8

China 90.9 95.1 86.5

Brazil 88.6 88.4 88.8

Russian Federation 99.4 99.7 99.2

World 82.2 87.2 77.3

Developing Countries 76.8 83.5 70.1

Sub-Saharan Africa 61.2 69.5 53.3

Table 2: Adult and youth literacy rates around the world

Source: Global Monitoring Report (UNESCO, 2006)

Theoretical Framework

Two different models were useful to construct the model used in this paper. The former by [13] examines the impact of public expenditure across countries, while the [14] analyses the impact of public expenditure across states in India. One can use the following model to evaluate the effectiveness of government spending on education and healthcare in a cross-sectional study across developing and transition countries:

Yi = f (X1i, X2i, Zi) where

Yi is a social indicator reflecting education attainment or health status for a country i,

X1i the aggregate public spending on education or health care as a share of GDP

X2i is allocations to different programs within the sector (i.e., primary education and primary health care) as a share of total sectorial spending

Zi is a vector of socioeconomic variables.

Four measures of education attainment are used: gross enrolment in primary and upper-primary education, gross enrolment in secondary education, persistence through Grade IV, and primary school drop-out rates. The gross enrolment rate (GER) represents the number of students registered in an education level as a percentage of total number of students of proper age for that specific level. The GER measure includes under-age and over-age children, as well as grade repeaters.

The other method uses a similar model to evaluate the impact of public expenditure across states in India:

Yit = f (Eit, GSDPit, Xit) where

Y is a social indicator,

E denotes social sector spending,

GSDP is defined in per capita terms,

X is the vector of other control variables.

i denotes states in the sample and t denotes time period.

The model is estimated for two measures of education attainment:

(a) Gross enrolment in primary and secondary education and

(b) Gross enrolment in secondary education.

Higher Education system in India

In far Early days Education in India was considered highly advanced as stated from the facts of the Learning that are present in the Buddhist Monasteries since 7th Century BC till 3rd Century AD. In such Monasteries centres, formal gathering of scholars-- gurukula-- were ment to perform intellectual debates and discussions-- parishads-- in residential campuses.

And few of these centres were large and had several faculties. Historians use to dig deep that those time had an indispensable resemblance to the European medieval universities that eventually came up very late. But that early education system in India slowly got vanished followed by the devastation and disorder in the country.

Before 19th Century. India had 3 different traditions of advance scholarship in the Hindu gurukulas, the Buddhist viharas, and the Quranic madarasas. Practically before the British people came to India and set up a chain of schools that are objected to impart western education and that to be in English medium. The very first such college to open and impart western education was founded in 1818 at Serampore near Calcutta. After that over next 40 years, many of such colleges were established throughout the country at Agra, Bombay, Madras, Nagpur, Patna, Calcutta, and Nagapattinam. In 1857, three federal examining universities following the same pattern that of London University were establish in Calcutta, Bombay and Madras. The existing 27 colleges were then affiliated to these three universities. Later in time, more such universities were established. At the time of independence in 1947, there were just 19 universities and several hundred affiliated colleges (CABE, 2005a). But the higher education system in India went up with a rapid growth after independence. By 1980, there were about more than 130 universities and 4500 colleges in the country which were enrolling about five per cent of the eligible population. While, today in terms of enrolment, India stands at third position in the world after China and USA in terms of higher education system with almost 18000 institutions being the largest education system. The number of institutions in India are more than four times the number of institutions in USA and entire Europe collectively. As a result, the system of higher education is very fragmented and very difficult to manage in India as compared to any other higher education system in entire world.

Mapping the growth in higher education

There has been an impressive uplifting growth in the system of Higher Education on India after Independence. There is a significant growth in the number of Universities and Colleges, There is a significant increase in the number of universities (25 in 1947 to 348 in 2005) colleges (700 in 1947 to 17625 in 2005) and correspondingly the enrolment in colleges and universities has increased from 0.1 million in 1947 to 10.48 million in 2005. The majority of colleges that are affiliated to 131 universities constitute the bulk number of the higher education system in India, which collectively constitute about 89 per cent of the overall enrolment in the country. In 1980s it was obvious that new types of higher education vendors are needed in India. During this period, the private institutions came up too, the distance education programs were a famous trend in people, the public universities and the colleges attempted starting self-financing programs for the students while foreign institutions started offering programs by themselves or in alliance with pre-existing Indian institutions resulting the non-university sector gaining pace.

Concerns arising out of growth pattern

The growth of higher education system has not been well planned. The efforts to get higher education public has eventually increased the number of institutions but not the intellectual resources. That resulted in poor academic standards. There has been many problems encountered by higher education in India and poor infrastructure facilities, consistent large vacancies in major faculty positions and poor faculty, outmoded teaching methods, poor research standards, discouraged students, overcrowded classrooms and widespread geographic, income, gender, and ethnic imbalances. There is poor financial help by the government and public for higher education in India. Many existing colleges in rural areas are still under development and very limited number of teachers. Concerns have been reported about exploitation of students in private providers. Students from poor background suffers even more disadvantages for not being prepared academically to face highly competitive entrance examinations. With changing phases, three near sighted about higher education:

on national basis it is supplied to the local students;

it is government regulated

With the more and more private and foreign providers, there is an obvious competition in the higher education sector. The students and academics are now favoured with bundle of options. This paper highlights various reforms brought in higher education in India.

Expenditure on higher education in India

Expenditure on higher education is the key point in this paper. With the canvas of higher education expanding at such high rate, one cannot state of a stable and promising funding resource for higher education. The future of promises of financing in higher education cannot be just an extension of the present one but with rapid growth in the number of students a completely new mechanism could be used for cost sharing. Being consistent with facts handling expenditure issues in higher education have to be reformed and that would require new policies and mechanisms by government. Sanyal and Martin [15] have figured seven key factors that would change the new funding trends of higher education:

a. The massive expansion of enrolment;

b. The incapacity of the state to fund such an expansion;

c. The vigorous emergence of the private higher education;

d. The tendency to cost sharing by students and their parents;

e. The importance of accountability;

f. The emergence of new providers; and

g. The need for funding by the states to reduce growing inequalities in access.

Central government

Higher Education

Technical Education

Other

Total

Plan

6.4

7.5

0.65

14.55

Non-plan

11.57

8.45

0.45

20.47

Subtotal

17.97

15.95

1.10

35.02

State governments

Plan

4.94

5.41

1.25

9.15

Non-plan

72.72

12.52

4.02

87.20

Subtotal

77.66

17.93

5.27

96.35

Total

95.63

33.88

6.37

131.37

Public expenditure on higher education in India (Amount spend is in INR billion)

Addressing the challenges in education expenditure

Mobilizing the power of the people

It is obvious that the representative village education committees (VECs) — being part of the local councils do not perform their functions properly. Perhaps in certain states (e.g. Madhya Pradesh, Kerala, Himachal Pradesh) there is active involvement of the community in internal matters of the local school. In many States elementary education have not been devolved by the government bodies. The scenario for decentralization of elementary education for the local councils depends on efficiency. The last 50 years of experience has been organized educational services. The only frame for improving efficiency of primary is for all local-level State functionaries to become accountable for the local council. Responsibility for these subjects should pass from the State government to the councils.

Additional resources and reforming the public

The prime cost for opening additional school would require additional resources. Such huge amount of money could not be met without any official development assistance. Consistent expenditures like hiring additional teachers would need additional resources. Considering the tax introduced in the 2004 budget is a favourable step but it is supposed to be followed with incentives by the central government, state governments, and public as well. In order to come up with excess considering expenditures and resources. State governments have to address the pattern of public spending on education sector on a higher level. These changes are particularly important in the places where low elementary education is not present. This reform is particularly important in the States with low elementary enrolment rates. Considering the expenditures on higher education system, the private returns are supposed to be high for higher education and mostly those who have strong case on ground of equity for cost recovery at the university. Whatever increment has been made in higher levels of education, the main advantages should lead to improve higher education level.

Improving teacher accountability and effectiveness

Teachers are supposed to retain their contracts and any renewal or upgrade of their existing contracts should be strictly based on their performance and correspondingly salary. Perhaps, there is need for a quantum leap in the number of days and quality of training of para-teachers, and their monitoring and supervision.

Improving cost-effectiveness of non-salary inputs

The household expenditure for a family to send a child to school remain prohibitive, and the efforts made to push those expenditure have to be larger than hitherto. The central ministry of education holds a poorly administered scheme and is being substituted by a scheme of cooked meals, rather than distribution of rations. The State governments is supposed to take the responsibility to pay the additional cost of the meals, which could be cooked with community involvement. Inefficient placement of three other kinds of incentives offered should take place at National level considering it as a prime factor.

Regulating, not subsidizing the private sector

There should exist a national standard on every private school articulating under the central government. For every private-unaided schools converting into aided schools should be banned and all private-aided schools should be dealt strictly while providing any monetary aid by government.

Conclusion

This study concludes that there has been a lot of changes in trends since the introduction of British Education System. Now education is accessible to all thanks to the government expenditure in the education system. But still a lot is to be done to achieve MDG by 2015. It has been found that government expenditure’s main focus is to get as many student as possible to get enrolled in school and reduce the student teacher ratio. This has hampered the quality of education being imparted to the students as there is no mechanism to check that. Also the recent trend to allow private bodies to setup universities has helped in increasing the graduates in the country but government should be cautious as private players may take advantage of loopholes in the system as evident in what happened in Chattisgarh.