(Union Budget 2016-17) Children Neglected by Fudged Budget

Despite the steady devaluation of post-independence India’s human capital, the BJP/NDA government’s second full-fledged budget shows no awareness that agricultural productivity and rural regeneration are intimately connected with improved learning outcomes in education

Ever since EducationWorld was launched on the eve of the new millennium with the mission to “build the pressure of public opinion to make education the #1 item on the national agenda,” your editors have been disappointed with every Union budget presented to Parliament and the people. For some inexplicable reason, developing the country’s high-potential human resource has been — and continues to be — a low priority of the Central and state governments for the past 68 years since independence. And regrettably, academia and the intelligentsia (including the media), which should know better, have been complicit in the neglect of early childhood, primary, secondary and higher education with the country and society paying dearly for continuous under-investment in development of India’s abundant human capital.

Prolonged under-investment and societal failure to provide meaningful, qualitative education to two generations of post-independence India’s children has burdened the country with 300 million adult illiterates, a community equal to the entire population of the United States of America. The rest of the populace, except for a tiny sliver at the top of the pyramid, is at best semi or functionally literate. For a start, 53 percent of the 200 million children enrolled in the country’s 1.2 million state government schools at the start of every academic year, drop out of the education system prior to completing elementary education (class VIII). Moreover, the learning outcomes of children in government primaries, as conscientiously reported by the highly-respected NGO Pratham in its Annual Status of Education Report (ASER), are rock bottom.

Consequently, even the 30 million children who complete secondary education annually, have weak foundations and are ill-prepared for higher study. Unsurprisingly, learning attainments in the great majority of India’s 35,000 colleges and 800 universities, which host 27 million students, are poor. Only two of the country’s universities are ranked among the Top 200 in the World University Rankings league tables of the authoritative London-based rating agencies QS and Times Higher Education, and several studies (McKinsey World Institute, Aspiring Minds) indicate that the overwhelming majority of graduates of India’s higher education institutions are not fit for employment in multinational companies. The accumulated burden of inferior quality education and poor learning outcomes across the spectrum is that industrial shopfloor and farm productivity in India compares unfavourably with developed OECD, China and most newly-industrialised countries of South-east Asia.

Despite this dismal scenario and steady devaluation of the country’s human capital, the proclaimed agriculture and rural development-oriented Union Budget 2016-17, presented to Parliament and the nation on February 29 by Union finance minister Arun Jaitley, shows no official awareness that agriculture productivity and rural regeneration are intimately connected with improved education in rural primaries. In his 101-minute budget speech, Jaitley ritually included “education, skills and job creation to make India a knowledge-based and productive society” among his “nine pillars to transform India” (the other eight: agriculture and farmers’ welfare; rural employment; healthcare; infrastructure investment (“to enhance efficiency and quality of life”); financial sector reforms; governance and ease of doing business initiatives (“to enable people to realise their potential”); fiscal discipline and tax reforms).

However in terms of specifics, Jaitley offered little more than crumbs to the world’s largest (500 million) child and youth population. Among the crumbs: the Sarva Shiksha Abhiyan (‘Education for All’) primary education programme promised an unspecified “increasing share of allocation”; 62 new Central government-funded Navodaya Vidyalayas (co-ed rural boarding schools) over the next two years; Rs.1,000 crore for establishment of a Higher Education Funding Agency (HEFA) for infrastructure improvement in top universities; promotion of 1,500 Multi-skill Training Institutes at a cost of Rs.1,700 crore, and entrepreneurship education and training in schools, colleges and government ITIs through Moocs (massive open online courses) programmes (see box p. 78).

Although ex facie these provisions for education in Budget 2016-17 might seem impressive, the bottomline is that the total outlay of the BJP-led Central government for education this year aggregates Rs.72,394 crore, a mere 3.24 percent increase over the actual expenditure of Rs.67,586 crore in 2015-16, which itself was revised downwards from the Rs.82,771 crore budgeted for the year. As a percentage of GDP, the Union government’s education outlay in the current year is 0.48 percent cf. 0.50 in 2015-16 and 0.66 in 2012-13. Even as a percentage of total budget expenditure, the Centre’s annual allocation for education has steadily decreased from 4.7 percent in 2012-13 to 3.7 percent in Budget 2016-17, says the Delhi-based think-tank Centre for Budget and Governance Accountability.

The rationale for diminishing Central government allocations for education advanced by Jaitley last year was the 10 percent higher share of Central taxes awarded by the 14th Finance Commission to state governments in February 2015, when he expressed the hope that state governments would enhance their education budgets. This is certain to prove wishful thinking because it’s common knowledge that infrastructure and teaching-learning standards in state government schools and colleges are way below Central government norms with even the poorest households fleeing free-of-charge state government schools to enroll children in fees-levying private budget schools, notwithstanding many of the latter being ‘unrecognised’ by state education authorities.

Moreover, it’s pertinent to note that against the recommended norm of 6 percent of GDP, the annual outlay of the state governments averages 2.80 percent of GSDP (gross state domestic production). Consequently total public spending on education in India (Centre plus states), according to all international and domestic think-tanks and economic monitoring agencies, has never exceeded 4 percent, averaging a mere 3.25-3.5 percent of GDP for over six decades.

“Census 2011 indicates that 18 percent of India’s children in the 6-14 age group — 43 million — are out of school with most surveys and reports indicating that the quality of school education has deteriorated over the years. Despite this, the overall allocation for school education has increased by only 3.24 percent over the revised estimate of 2015-16, with the total budgetary allocation for school and higher education rising from Rs.67,586 crore in 2015-16 to Rs.72,394 crore this year. This is a negligible increase if inflation and new programmes introduced by the government are taken into account. Also, it needs to be noted that the allocation for education as a share of total budget expenditure and as a percentage of GDP has decreased, and the allocation for teachers’ training has declined from Rs.558 crore in 2015-16 to Rs.510 crore in 2016-17. It’s clear that the Union government expects states to increase their education outlays. But given that only 8 percent of state government schools are compliant with all the infrastructure norms prescribed by the RTE Act six years after it became law, the commitment and capability of state governments to allocate greater resources for education is doubtful,” says Malini Chakravarty, a postgrad of the Delhi School of Economics and Jawaharlal Nehru University, former faculty at the Lal Bahadur Shastri Institute of Management, Delhi, and currently senior research consultant at the Centre for Budget and Governance Accountability (CBGA), a Delhi-based think tank (estb.2005) which renders valuable service to the citizenry by deciphering and analysing opaque government budgets.

Ambarish Rai, national convenor of the Delhi-based RTE Forum (a civil collective of over 10,000 education NGOs), is even more disappointed with the grudging provision made in Budget 2016-17 for India’s 500 million children and youth. “Even after nearly six years since commencement of the RTE Act, 2009, distressing data like less than 10 percent of schools being RTE compliant, a shortage of 940,000 teachers in government schools and 8.3 percent primary schools having only one teacher, indicate that education is not a priority of the government. To achieve the goals of universalisation of education, we need to add quality to government schools by establishing a strong national public education system and upgrading the quality of all government schools to the level of the Central government’s Kendriya Vidyalayas and Navodaya Vidyalayas.

“During our pre-budget consultations with the finance minister, the RTE Forum had demanded an increase in the allocation for education to 10 percent of GDP bearing in mind the cumulative gaps in successive budgets for the past 50 years since the Kothari Commission recommended 6 percent of GDP for education. But this budget has again proved to be an empty basket, totally ignoring the rights of children to quality education,” says Rai, in a bitter comment on the BJP/NDA government’s second full-fledged Union budget.

Curiously neither the Central or state governments — nor Indian society as a whole — seem to have much interest in providing for children, the most vulnerable section of society. In an enlightening publication titled Union Budget: Connecting the Dots (2016), CBGA highlights the obfuscated reality that the Central government’s allocations for children — education, health, development and protection — are declining year on year. According to the CBGA, total budgetary spending on child focused schemes as a percentage of Union budgets has declined from 4.7 percent in 2012-13 to 3.32 percent in 2016-17, and as a percentage of GDP from 0.67 percent to 0.44 percent. “Children constitute about 39 percent of the total population of the country, yet government spending on child-focused schemes has not been given a high priority over the past several years. In the latest Union Budget, although the total quantum of allocations for child focused schemes has increased in absolute figures, its share in the total Union Budget has registered a decline from 3.62 percent in 2015-16 to 3.32 percent in 2016-17,” comment the authors of Connecting the Dots.

The explanation of this unnatural phenomenon would be manifest in the budget itself if the Union budget rendered a true and faithful account of its expenditure priorities to the citizenry. Instead, the over-hyped Union budget hides huge amounts the government wastefully spends by way of wages, salaries and perquisites and establishment costs, from public scrutiny. The plain truth is that allocations for public education and health are pitifully small because it’s become an unchecked precedent for governments at the Centre and states to spend most of their tax and other revenues on maintaining the country’s huge 20 million neta-babu establishment which following several munificent Pay Commission awards, has emerged as an island of power and privilege in a nation devastated by neta-babu socialism.

Although in his budget speech finance minister Arun Jaitley was quick to assure Parliament that the huge Rs.1.02 lakh crore award of the Seventh Pay Commission to 4.8 million Central government employees has been factored into his calculations, neither the budget speech nor budget documents disclose the total wages and salaries bill of the Union government. Though the Companies Act, 2013 mandates full disclosure of salaries and perquisites drawn by directors and managers, the government doesn’t impose any such obligation upon itself, nor does it disclose its annual wages and salaries bill in the budget. This vital information is buried under the head of non-plan revenue expenditure which aggregates Rs.14.28 lakh crore, and appropriates a major share of the Centre’s total revenue of Rs.19.78 lakh crore budgeted for 2016-17.

In this connection, it’s pertinent to note that despite India’s notoriously corrupt and inefficient bureaucracy being globally infamous for red-tape, delay and extortion, the 7th Pay Commission chaired by Justice (Retd.) Ashok Mathur and dominated by retired bureaucrats, has awarded Central government employees a 23.55 percent pay hike which the BJP/NDA government has announced will become effective with retrospective effect from January 1, 2016. The rationale of this generous award, given that government salaries are indexed for inflation, defies all logic and is a major cause of grudging education, health and social sector budgetary outlays.

Although the Union Budget is silent on the huge slice of tax revenue allocated to the pampered bureaucracy, according to Subhamoy Bhattacharjee writing in the Business Standard (January 18), in 2015-16 the total wages, salaries and pensions bill of Central government employees (who received a huge bonanza under the Sixth Pay Commission award in 2006) aggregated Rs.1.45 lakh crore, absorbing 8.1 percent of the total budget and 1.06 percent of GDP last year. After the award of the 7th Pay Commission, the payout will rise to Rs.2.47 lakh crore, a sum equivalent to 12.4 percent of the budget and 1.63 percent of GDP.

Ten years ago while recommending a 40 percent pay hike to Central government employees, the Sixth Pay Commission had suggested a reduction in the number of government employees and introduction of productivity related pay for the bureaucracy. Neither of these conditions have been fulfilled. On the contrary, the size of the Central bureaucracy has increased from 4.5 million in 2006 to 4.8 million currently.

The conclusion is inescapable: the primary objective of the massive annual tax and spend exercise of the Central (and state) governments is to transform the neta-babu class into an affluent island in a sea of poverty. Under the award of the 7th Pay Commission, the minimum salary (excluding allowances) of a Central government employee will be Rs.18,000 and maximum Rs.2.25 lakh per month. Against this the monthly per capita income of the citizen averages Rs.3,333.

Quite obviously there is method in the confusing opacity of the Union budget. Unlike corporate balance sheets which are mandated to make full disclosure of the salaries, perquisites and extraordinary expenses of directors and senior managers, the extravagant spending of ministers and senior bureaucrats on office and home refurbishing, foreign jaunts etc is buried under the broad heads of revenue expenditure and general departmental expenses. In particular, the mind-boggling expenditure incurred by Union ministers on foreign trips and travel is impossible for citizens to monitor or track.

For instance prime minister Narendra Modi’s office initially refused to respond to a notice under the Right to Information Act, 2005 to disclose the expenditure incurred on the PM’s well-publicised 20-plus foreign excursions since he assumed office in May 2014. However after a written question was raised in the Lok Sabha, the government recently disclosed that in 2014-15 and 2015-16 the PM and government spent Rs.351 crore and Rs.509 crore respectively on foreign travel. Large as this sum is, it’s less than the foreign jaunts bill of the Congress-led UPA II government in 2012-13 (Rs.593 crore).

According to an investigation conducted by India Today, Montek Singh Ahluwalia, deputy chief of the Soviet-style Planning Commission (mercifully shut down last year), travelled abroad every nine days at tax-payers’ expense that year. Such wasteful expenditure is completely hidden in the budget presentation format by the 20 million-strong neta-babu conspiracy which has misgoverned post-independence India, and whose prime objective is to increase its pay, power and perquisites at the cost of nation-building — and especially social sector — expenditure.

The point is that the format in which the Union and state budgets are presented to the people make it very difficult — if not impossible — for the public to ascertain the spending priorities and development expenditure of government. “In India we don’t get citizens’ budgets. The finance minister’s budget speech is normally used to present a success story of the government and rarely does it reveal the actual state of the economy. A large number of technical terms and codes are used in budget documents to denote receipts and expenditure under various heads. It is necessary that additional self-explanatory budget documents are presented to the people. It would be in the public interest if a standard practice of providing all details of programmatic intervention allocations in one place, is followed. For instance, at present, information relating to different heads of expenditure for various programmes — such as Sarva Shiksha Abhiyaan — is scattered across several budget documents rather than consolidated in one place,” says Chakravarty of CBGA quoted earlier.

Although he is of the view that greater simplification of the Union budget is not desirable because it is essentially a “technical document,” Nitin Pai, co-founder and director of the Takshashila Institution, a Bangalore-based think-tank, agrees that there’s a need to “find a balance” between the information provided in the Union budget and in the annual reports of government ministries, departments and statutory boards.

“There needs to be tighter coupling and cross-referencing between the two. For instance, the ministries must publish their annual reports on the same day as the budget so that we can get details of their wage bills, administrative expenses etc. Putting all this in the Union Budget will drown it in cumbersome detail. But we need to be able to look up the ministries’ annual reports to find out how the expenditure line item in the Union budget is actually spent. Currently the time gap between presentation of the Union budget and publication of the annual reports of the ministries is inconsistent and extends to years,” says Pai, an alum of Nanyang Technological University and Lee Kuan Yew School of Public Policy, Singapore, who co-promoted the Takshashila Institution in 2009 as “an independent, non-partisan, non-profit organisation (which) contributes towards building the intellectual foundations of an India that has global interests”.

Dr. A.S. Seetharamu, hitherto professor of education at the Institute of Social & Economic Change (ISEC, estb.1974), also complains that the Union budget is needlessly complex and opaque. “The presentation format of the budget is highly technical. There is a conspicuous lack of transparency for the conscientious common man, the taxpayer, which is tantamount to low accountability. It’s the duty and obligation of government to keep the common man in mind when the budget is released to the public,” says Seetharamu.

Ex facie the opacity of the Union budget may seem unconnected with the pathetic inadequacy of the provision made for education of the country’s children and youth. But the reality is that the Central government’s budget hides the fact that its salaries and pensions bill absorbs 26 percent of the Rs.10.54 lakh crore it mobilises as tax revenue. If to this expenditure item the annual defence (Rs.2.49 lakh crore) and annual interest payout (Rs.4.92 lakh crore) is added, almost all the tax revenue is expended for non-development purposes. With successive governments at the Centre set against cutting non-development expenditure under these heads — by reducing the number of government employees, permitting the defence service to generate incomes and retiring debt through sale of public sector enterprises — it’s no surprise that social sector allocations are pitifully small. Certainly there’s something not quite right about the priorities of an elected government providing a mere Rs.72,000 crore for the education of 500 million children and budgeting a payout of Rs.2.47 lakh crore for its 4.8 million employees.

Quite clearly, the expenditure priorities of the Union and state governments have to transform radically. For several years, the editors of this publication have been advocating that the Centre should set an example for state governments by doubling its education outlay to 1.2 percent of GDP. With the aid and advice of Dr. Seetharamu, former professor of education at ISEC, we have presented several needs-based lib-lab-lav (libraries-laboratories and lavatories) construction proposals assessing the resources required to equip all government primaries countrywide with these facilities and make them RTE Act compliant. For this purpose, we have also suggested ways and means by which the Centre could mobilise resources (disinvestment of public sector enterprises, reducing defence expenditure by enabling the defence services to earn revenue, modest corporate and individual flat taxes etc) for investment in early childhood care and education, public primary education and health care (see box p.86).

While it’s understandable that Central and state governments run by the neta-babu conspiracy preoccupied with feathering its own nest, have totally ignored these schemas and proposals, perhaps the unkindest cut is that the Indian academy — which should be in the vanguard of education upgradation and reform — has also been totally unresponsive and unwilling to debate them. This gives rise to the suspicion that as beneficiaries of the Sixth and Seventh Pay Commission awards, the academy has been co-opted into the uncaring establishment. Equally uncaring about the plight of the great majority of the nation’s children — deprived of adequate food, clothing, shelter, education, healthcare and protection — is the country’s media. Repeated requests to major media houses and bleeding-heart and/or hyper-ventilating television news anchors to highlight and debate government neglect of the country’s 1.6 million anganwadis and 1.2 million government primaries, have fallen on deaf ears.

Following extreme pressure by EducationWorld, which has staged six unprecedented EW Early Childhood Education Global Conferences addressed by international experts, in December 2013 shortly before it was ousted from office in General Election 2014, the Congress-led UPA-II government approved a National Early Childhood Care and Education (NECCE) policy draft. But since then, the NECCE policy has vanished from the radar of the BJP-led NDA government.

Ominously the budget’s provision for the Central government’s Integrated Child Development Services (ICDS) programme, that funds the 1.6 million anganwadis which provide nutrition to lactating mothers and newborns and a modicum of early childhood education to youngest children, has been reduced from the budgeted Rs.15,587 crore in 2015-16 to Rs.14,863 crore this year. This despite the reality that the extant 1.6 million anganwadis accommodate only 50 percent of the country’s 158 million infants in the 0-5 age group.

As a result, 48 percent of children in this age group suffer severe malnutrition and are in danger of stunting. In light of this damning data, the finance minister’s assertion in his budget speech that “the priority of our government is to clearly provide additional resources for vulnerable sections, rural areas and social and physical infrastructure creation”, has a hollow ring to it. After all, who could be more vulnerable than the country’s children?

The objective of this somewhat prolonged lament is not to specifically target Budget 2016-17 or the BJP/NDA government but to protest the open, uninterrupted and continuous under-provision for education year after year for over half a century, which has resulted in severe devaluation of the country’s human capital with disastrous consequences for the Indian economy and society. Admittedly, in Union Budget 2016-17, finance minister Arun Jaitley has made relatively generous provisions for agriculture, farmers’ welfare and rural development. Yet given the country’s huge rural population of 600 million, the question of adequacy of the Rs.1.32 lakh crore allocated for rural development aside, the incontrovertible truth is that the great majority of the intended beneficiaries won’t be able to avail this largesse because of illiteracy and inadequate education, with a large proportion of this outlay certain to be siphoned off by the bureaucracy which has been handsomely provided for in the budget. As highlighted in the EducationWorld cover story of last month (‘The Shirpur Rural Regeneration Model’), meaningful primary-secondary education is the precondition of agriculture and rural development.

Yet the bottomline is that to make acceptable quality public education a reality for 21st-century India’s 600 million cruelly neglected children and youth, the pressure of public opinion — and particularly of the intelligentsia, media and the academy — needs to be exerted upon the Central and state governments to recast their getting and spending priorities in favour of Generation Next, which has to be prepared to compete with better-educated businessmen and professionals in a rapidly crystallising global marketplace.