Never in the history of post-independence India has the combined annual education expenditure of the Centre and states exceeded 4 percent of GDP, a curious national blindspot which has encumbered the nation with 350 million adult illiterates and a crumbling elementary school system. In Budget 2010-11, provision made for education is once again grossly inadequate. Dilip Thakore reports
The annual hype and hoopla created mainly by English medium television news channels about the Union budget 2010-11 has abated as abruptly as it was generated. With the media now awash with the next big events — the Women’s Reservation and Foreign Universities Bills and the Indian Premier League T-20 Cricket tournament — Budget 2010 is history in the new information age of 24x7 television with newshounds ever in search of the next breaking story.
Nevertheless the annual ritual of presentation of the Central govern-ment’s Union budget is an important event because it signals the spending priorities of the leviathan Delhi imperium, which dominates almost every sector of the Indian economy and will spend a massive sum of Rs.1108,749 crore during the next 12 months beginning April. How and where it proposes to spend this colossal amount not only affects the life of every adult citizen, but will also shape the lives and destinies of the next generation and future leaders of 21st century India.
Therefore the Union budget 2010-11 — presented to Parliament and the nation on February 26 by Congress party grandee and Union finance minister Pranab Mukherjee, amidst considerable uproar and confusion caused by opposition parties protesting the restoration of previously reduced imposts on crude oil and petroleum products — merits careful consideration and examination. Particularly from the perspective of adequacy of provision for education and development of the nation’s silent majority of 450 million disenfranchised children below age 18.
Viewed from this perspective, curiously the thousands of manhours expended in post-budget analyses on television and the print media, had precious little to say about the provision made for development of the contem-porary world’s largest human resource pool. Most post-budget discussions focused upon the burning issue of food prices inflation — running at 18 percent over the previous year at the time of budget presentation — and the impact of the re-imposition of higher customs duty on crude oil (5 percent), petrol and diesel (7.5 percent) and other refined products (10 percent), on prices.
Moreover most financial pundits gave Mukherjee high marks for budgeting a one percentage point reduction in the Centre’s fiscal deficit to 5.5 percent (from 6.9 percent in 2009-10) of GDP next year. On the provision made for education, the general consensus of opinion is that the increase in the plan outlay for (school) education dismissed in one paragraph by Mukherjee in his 107- minute budget speech from Rs.26,800 crore in fiscal 2009-10 to Rs.31,036 crore this year was adequate, with some even describing it as generous. The outlay made for higher education this year is static at Rs.10,992 crore.
Taking credit on behalf of the Congress-led UPA-2 government which returned to power in Delhi in May 2009 with a larger majority, for having piloted the Right to Free and Compulsory Education Act, 2009 which “creates a framework for legal entitlements for all children in the age group 6 to 14 years to education of good quality based on the principles of equity and non-discrimination”, Mukherjee informed Parliament and the nation: “In recent years Sarva Shiksha Abhiyan (SSA) has made a significant contribution in improving enrolment and infrastructure for elementary education. About 98 percent of habitations are now covered by primary schools. I propose the plan allocation for school education be raised from Rs.26,800 crore in 2009-10 to Rs.31,036 crore in 2010-11. In addition, States will have access to Rs.3,675 crore for elementary education under the Thirteenth Finance Commission Grants for 2010-2011.”
But even with this 15.8 percent higher outlay for primary-secondary education, the Central government’s total expenditure for education aggregates a mere Rs.42,036 crore, equivalent to 0.68 percent of GDP. Against this grudging expenditure budgeted for the nation’s children and youth, way back in 1966 the Kothari Commission had recommended that the annual national expenditure (Centre plus states) on education should be pegged at 6 percent of GDP.
Moreover it’s pertinent to note that the developed industrial nations average annual expenditure of 5-6 percent of their larger GDP for education. The US for instance spends 5.7 percent of its $13 trillion (Rs.58,000,000 crore) GDP on education and the UK 5.3 percent. Yet never in the history of post-indepen-dence India has the combined annual education expen-diture of the Centre and states exceeded 4 percent of GDP, a curious national blindspot which has encumbered the nation with 350 million adult illiterates and a crumbling elementary school system, which experiences a globally unprecedented dropout ratio of 53 percent before class VIII. Also because of inadequate capacity in tertiary education, a mere 12 percent of youth in the age group 18-24 enters higher education (cf. 60 percent in the US and 25 percent in China).
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If the resounding silence of the academic community, and especially of Shastri Bhavan which houses the high-profile Union HRD minister Kapil Sibal, is any indication, the modest business-as-usual provision made in Budget 2010 for education is deeply disappointing. In particular Sibal’s silence on the provision made in Mukherjee’s budget (“by the middle class for the middle class”) for public education is widely interpreted as disappointment, if not dissent.
Yet according to sources within the HRD ministry, Sibal is well aware of Mukherjee’s fiscal constraints and of the near impossibility of making meaningfully higher allocations for education within the framework of the annual budgets of the Central and state governments which are heavily in the red. Therefore he is banking upon liberalisation and deregulation of the government dominated education sector and stimulating massive private investment in education, an ideological right turn which is being resisted by the HRD ministry bureaucracy, the Left and regressive caste-based parties, and die-hard socialists within the Congress.
In the circumstances Sibal has had to step gingerly, and has preferred not to comment directly on the clearly inade-quate provisions made for universal-isation of education in Budget 2010. The only oblique reference was in an interview with the television channel CNBC TV-18 on March 9, when he mooted the proposal of establishing an Education Finance Corporation with a corpus of Rs.20,000 crore. “… Education must be given the status of priority sector so that those who want to set up institutions can access finance, and have to return those loans on a long term basis in 20-25 years. That way you will be able to build infrastructure and you won’t have to go to Pranab Mukherjee for more budget allocation, and the private sector will get involved. And the fees will not have to be hiked up because now those people have to return the loan in seven years, and they take this opportunity to charge a capitation fee. There would be no rationale to do so, there will be greater competition in the market, fees will come down, and students should (also) have access to the Education Finance Corporation for getting loans to study in international colleges,” he said.
However other knowledgeable monitors of the national education scene tend to be less circum-spect. According to Dr. Jandhyala B.G. Tilak, of the National University of Educational Planning and Adminis-tration, Delhi, although the Central government’s total plan allocation for education (primary, secondary and tertiary) has been raised by 15 percent to Rs.42,036 crore in Budget 2010 (0.68 percent of GDP), it is a “very modest, if not insignificant” increase at current rates of inflation. According to Tilak, of this amount Rs.25,000 crore is the outlay for elementary education (including Rs.9,300 crore for the national mid-day meal scheme); Rs.4,700 crore for secondary education and Rs.11,000 crore for higher education. “On the whole the proposals made in the case of education in the 26th February 2010 Union budget, to say the least, do not indicate a special significance being attached to education — neither the Right to Education Act, nor to the recent proposals on univer-salisation of secondary education, nor to reforms being discussed in higher education,” says Prof. Tilak writing in the Hindu (March 6).
The low priority accorded to education of the masses — the finance minister and the establishment is perfectly aware that the middle class finances its own education through the network of the country’s estimated 80,000 private schools and elite colleges — is reflected not only in the reluctance of successive Union ministers to transparently disclose the total outlay for education, but also in the refusal to estimate the aggregate need of the public education system. Indeed for the past decade and more, your correspondent has been a voice in the wilderness calling for needs-based budgeting, especially in the vital primary-secondary education sector. This requires the army of under-employed bureaucrats in the HRD ministry and the Planning Commission to honestly assess the capital and staffing expenditure required to enable Indian education to attain the status of a medium development nation accor-ding to the norms of the United Nations Development Programme (UNDP), and then devise a resource mobilisation strategy to fulfill the need over a five year time span.
Yet such an honest assessment of the expenditure need of the education system to meet the modest aspirations of India’s 450 million children, has never been made by the HRD ministry, or by Indian academia. According to Dr. A.S. Seetharamu, hitherto professor of education at the Institute of Social and Economic Change (ISEC), Bangalore, the annual expenditure of govern-ment (Centre plus states) has to rise by an additional Rs.99,900 crore (equivalent to 1.62 percent of GDP) per year during the next five years, if India is to raise adult literacy to 90 percent and attain medium development nation status on a par with the People’s Republic of China (see box).
The standard response of the political class (which has a vested interest in mass illiteracy and quasi-literacy) is that the Central and state governments juggling with massive revenue and fiscal deficits, cannot raise outlays for education to that order of magnitude within their annual budgets. Yet a road map to attain the objective of the Central government raising an additional Rs.100,000 crore annually for education has been repeatedly presented to government and the public for the past three years by EducationWorld, without any response or debate on the issue — a telling indicator of middle class indifference to public education.
For instance in April 2008 and again in August 2009, when the then newly appointed Union finance minister of the Congress-led UPA-2 government Pranab Mukherjee belatedly presented Budget 2009-10 to Parliament and the nation, together with Dr. Seetharamu, Education-World presented a detailed (updated) schema to equip all 1.05 million government elementary (primary and upper primary) schools with libraries, laboratories and lavatories at an estimated additional cost of Rs.53,386 crore — a sum equivalent to 1 percent of India’s GDP last year. And lest this additional outlay required to raise India’s elementary education to medium development nation status prove too scary for the finance minister and the UPA-2 government, in an open letter to the finance minister, your editor suggested ways and means to mobilise resources (reduction of middle class subsidies, defence outlays, and firesale of public sector enterprises) to raise over Rs.100,000 crore annually “for investment in education, and health infrastructure and debt retirement” (see EW August 2009).
Yet so pervasive is government and middle class indifference to upgradation and improvement of the public education system that neither Dr. Seetharamu’s labour-intensive schema, nor your editor’s open letter (see p. 72 for updated version) evoked any response from government, Indian academia or the public.
Nevertheless it bears reiteration that the Union and state budgets presentation system inherited from the British Raj and characterised by opacity and obfuscation, has outlived its purpose and needs to be replaced by a more transparent and comprehensible regimen. Moreover quite clearly, the current budgeting system under which numerous small allocations are strewn over a wide variety of sectors and causes, needs to be replaced by a regimen of ‘thrust areas budgeting’ under which every year one or two thrust areas are given special attention via a massive investment boost linked with targeted outcomes. This was the objective of Dr. Seetharamu’s lib-lab-lav project proposal, which if adopted and implemented by the Union finance and HRD ministries, would enable the retention of the 105 million children who drop out of the country’s ramshackle primary-upper primary schools before reaching class VIII. And in particular if adopted, the lib-lab-lav proposal would effect a sea change in the education of girl children as millions of them routinely drop out of upper primaries country-wide, because of inadequate lavatory facilities.
Yet despite the stunning silence that has greeted his innovative lib-lab-lav blueprint which has the potential to revolutionise elementary education in India, Dr. Seetharamu is not dishear-tened. “Lack of response to radical reform ideas should be expected from the establishment which, steeped in custom and precedent, regards them as irritating criticism. Moreover middle class India which dominates the academic and public discourse, is not interested in public education. Overwhelmingly, they send their children to expensive pre-schools, private schools and later elite private colleges and the handful of top universities, if not abroad. Hence they are disinterested in the public education system for the masses. Nevertheless increasing pressure has been exerted by NGOs and the judiciary during the past decade to reform and upgrade public education. Therefore reformists should not become disheartened,” says Seetharamu.
Evidence of the impact of reformist pressure on government and the political establishment is offered by the UPA-2 government’s belated acknowledgement of the importance of vocational education and training (VET) for India’s massive population of 550 million children and youth. With only 3.5 million school-leaving children currently enroled in the country’s much-too-few VET institutions, the prime minister’s Council on National Skills Development (estb.2008) has set the nation a target to provide VET to 500 million children and youth by the year 2022 (see EW February special report feature ‘India Awakes to Vocational Education’). A silver lining to Mukherjee’s uninspiring Budget 2010 speech was his reiteration of the Union government’s support to the National Skills Development Corporation promoted in the public-private partnership mode, and announ-cement (albeit without budgetary provision) of a special scheme to upgrade the skill-sets of 3 million workers employed in the textile and garments industry, within the next five years.
“The plain truth is that in his anxiety to reduce the fiscal deficit, the finance minister has not made any significant increase in the budgetary provision for education. By clubbing the mid-day meal scheme with the outlay for education, and given that the entire allocation of 2009-10 was not spent last year, the Rs.42,036 crore provision for education this year has been dressed up to look good. Yet the reality of Budget 2010 is that despite the finance minister’s claims of having presented an inclusive budget, the provisions made for education, health and food security in these difficult times for the poor, have remained stagnant after adjustment for inflation,” says Dr. Abhay Pethe, Vibhooti Shukla chair professor of urban economics and regional development, and director of the department of economics at the University of Mumbai.
This assessment of Budget 2010 is supported by Dr. M. Thangaraj, prof-essor of economics at the University of Madras, Chennai who is outraged that in his budget speech the finance minister didn’t even make a passing reference to higher education. “At a time when the Sarva Shiksha Abhiyan (Education for All) movement is beginning to gain momentum and the Right to Education Act will become operational from April 1, the finance minister should have made a substantially larger outlay for education. Instead, as a percentage of GDP, it has actually reduced. Moreover the Central government seems to have washed its hands of higher education, and left it to the mercies of the private sector and foreign universities. This is anti-social as it will further reduce the access of the poor and socio-economically disadvantaged to higher education,” says Thangaraj.
However the finance minister’s compulsions and constraints are better appreciated by Dr. Narinder Pani, former assistant editor of the Economic Times and currently professor at the National Institute of Advanced Studies, Bangalore. “The major problem of Indian education is not so much the adequacy of investment, as efficiency of expenditure. For instance the Central government’s outlay for the nationwide mid-day meal scheme has been included in the education budget for the past few years. But despite this, there hasn’t been any decrease in the unacceptably high percentage of children suffering malnutrition in India, an indicator of inefficiency of expenditure. Moreover India is a security preoccupied country with huge defence and internal security budgets, which public opinion won’t allow to be cut. Hence the social sector spending options of the finance minister are limited,” says Pani.
An urgent imperative to demonstrate improved expenditure efficiency is also stressed by Ashish Rajpal, the Gurgaon-based founder chairman and chief executive of iDiscoveri Education Services Pvt. Ltd, whose in-house XSeed study programme is revolution-ising teaching-learning in private primary schools across the country (see EW cover story March). “Increases in budgetary allocations for education will achieve very little until the leadership becomes demanding about outcomes. While the increased outlays for IITs and NITs and other reputed institutions are welcome because of their track records of success, the increased outlays for ICT, SSA, Central univer-sities and other such schemes are likely to prove a colossal waste,” says Rajpal.
However these traditional resource-constraints and efficiency-of-expen-diture lines of argument have worn thin over the past half century since independence, during which the number of illiterates in India has risen to over 350 million, equivalent to the entire population of the country in 1947 when India wrested freedom from foreign rule.
Moreover if to this number one adds the population of quasi-literates and unemployables produced by the country’s moribund education system, the picture that emerges is of a nation trapped in a vicious cycle of an abysmal public education system producing ill-equipped graduates perpetually trapped in low productivity and poverty. Therefore quite clearly, massive additional investment is required in upgrading and expanding education infrastructure while simultaneously improving the efficiency of expenditure, particularly of the 1.1 million government schools countrywide. Moreover with a 2005 Nasscom-Mckinsey World Institute study shockingly disclosing that 75 percent of contemporary India’s engineering and 85 percent of science, arts and commerce college graduates are “unemployable”, massive resources have to be moblised for infrastructure and faculty development in higher education as well.
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Against the backdrop of this looming doomsday scenario, like its predecessor 62 budgets since India became independent in 1947, Budget 2010 has also failed to get its priorities correct, and do right by the country’s 450 million children and future generations who will have to compete with better educated and equipped youth and adults of the developed countries and new industrial nations such as China, Korea, Vietnam etc, in the fast-emerging global marketplace. Under no pressure from the myopic middle class and Indian academia (which are heavily reliant upon private education to school their children) to reform and revitalise the public education system, successive govern-ments in the Delhi imperium and state capitals are blowing up massive tax receipts and national resources on the pay and perks of bloated bureaucracies, defence, and unmerited middle class subsidies. While the wage bill of the 3.36 million Central government bureaucracy has been carefully concealed (estimated at Rs.75,000 crore), it is pertinent to note that in his latest Budget 2010, against tax collection receipts of Rs.746,651 crore, Mukherjee has provided Rs.147,000 crore for defence, Rs.116,200 crore as subsidies and Rs.248,660 crore towards interest payments. Little wonder that the best he could do for the education of India’s 450 million children was Rs.42,036 crore — a per capita provision of a mere Rs.934 in 2010-11.
Quite obviously, the status quo characterised by a prospering middle class emerging from the private education system flourishing within the fast-track Indian economy to the exclusion of the vast majority continuously short changed by the crumbling government education system, is unacceptable. The strains being visited upon the system and the polity are being manifested by the rising incidence of Naxalite and terrorist activity, and the tendency of youth enroled in the country’s second and third rung colleges churning out thousands of unemployable graduates, to resort to rioting and affray on the slightest provocation. Although the country’s political leadership cutting across all parties and Indian academia is disinclined to connect the dots, it’s quite obvious that the widespread disaffection with the system is rooted in dysfunctional and obsolete public education. That’s why despite hosting the world’s largest youth population (550 million), the Indian economy exhibits the curious paradox of a severe and deepening shortage of skilled and educated workers.
In his patently middle class-friendly Budget 2010, which has given income tax concessions of Rs.26,000 crore to the small minority of direct taxpayers while imposing a plethora of regressive indirect taxes — including a hike in customs and excise duties on crude and petrol and diesel — Pranab Mukherjee has proposed to spend a mere Rs.42,036 crore of an aggregate expenditure budget of Rs.1108,749 crore (3.8 percent) for the education of India’s children. As any ordinary housewife will aver, this provision is grossly inadequate.
Yet in his final peroration while commending Budget 2010, which according to him “belongs to the aam aadmi (common man)”, Mukherjee intoned: “Our actions today will determine our tomorrow.” And given the open, continuous and uninterrupted neglect of public education by post-independence India’s establishment, there’s a grim irony in these words.
With Hemalatha Raghupathi (Chennai)