The development priorities of the Central government are expressed through the sectoral resource allocations it makes in the Union budget. Viewed from this perspective, the BJP-NDA government’s Budget 2018-19 is a lacklustre, run-of-the-mill resource mobilisation and disbursal document with minimal concern for the welfare of the country’s poor and deprived majority, especially from the viewpoint of enforcing their rights and entitlements.
For reasons of poverty and deprivation, children of low-income households are obliged to attend the country’s 1.20 million government schools. But the Union Budget 2018-19 has allocated a mere Rs.85,010 crore for the education sector, an increase of 3.84 percent over the 2017-18 expenditure of Rs.81,869 crore. For public health, the allocation is 2.76 percent higher with similar percentage increases for most social sector and poverty alleviation programmes.
Even as Union finance minister Arun Jaitley has made miserly provision for public education, health and poverty alleviation in Budget 2018-19, he has made no attempt to reduce wasteful expenditure of the government. The substantial Rs.95,013 crore subsidy for fertilizers and petroleum — 15.94 percent higher than in 2017-18 — is clearly excessive. But the increase in provision for tax administration, which is 35.75 percent higher next year at Rs.1.05 lakh crore and consumes 4.32 percent of the total budget, is wholly irrational and verges on criminal waste in the contemporary digital age.
This massive increase in tax admin expenditure needs to be assessed from the perspective of additional revenue generated. The Central government expects to mobilise Rs.2.20 lakh crore next year, an increase of 14.63 percent. Therefore, an additional 35.75 percent will be spent to raise revenue by 14.63 percent. This is completely irrational and wasteful. In the new era of computation and digitalisation, it reflects deep inefficiency in the administration.
More than 50 years ago, the high-powered Education Commission headed by Dr. D.C. Kothari recommended investment of 6 percent of national income for public education. This was reinforced by the recommendations of several other committees including the Tapas Mazumder Committee (1999). However for the past 70 years since independence, investment in public education (Centre plus states) has been less than 4 percent of GDP with Big Brother Union government’s contribution for education hovering around a mere 0.5 percent.
The Constitution of India decrees that elementary education (classes I-VIII) of all children in the 6-14 age group is a fundamental right. Implicit in this constitutional directive is that children in primary-upper primary schools must receive high-quality education with demonstrably good learning outcomes.
Therefore, it’s high time the Big Brother Union government takes the lead and inspires all states to increase their education budgets to attain the 6 percent of GDP target to provide quality schooling to children of the country’s bottom-of-the-pyramid households. To attain this level of investment, the Union government urgently needs to increase its annual budgetary outlay for education by one percent of national income, i.e, by an additional Rs.160,000 crore. Indeed, it’s the duty and obligation of the Central government to inspire, motivate and lead by example, and persuade the country’s 29 state governments to mobilise resources to invest an additional 1 percent of GDP to raise the country’s annual investment in education (which is already 3.5 percent of GDP) to 6 percent, a national dream for the past 50 years.
Contrary to the official consensus there are ways and means for the Union government to mobilise an additional Rs.160,000 crore for investment in education. Some sugges-tions — open to debate — are given below.
• Reduce the Budget 2018-19 allocation for tax administration by 10 percent to an increase of 25.75 percent instead of the 35.75 percent budgeted. This will enable a saving of Rs.10,554 crore.
• Reduce the subsidy on fertilizers and petroleum by 10 percent to generate a saving of Rs.9,501 crore.
• Earmark 10 percent of the budgeted revenue from disinvestment of public sector enterprises (Rs.80,000 crore) for investment in developing the long-neglected human resource of the country.
These three initiatives in costs cutting and redeployment will generate an additional Rs.28,055 crore for investment in the education sector. The remainder Rs.131,000 crore can be mobilised by raising the Centre’s fiscal deficit by 0.78 percent, increasing it to 4.08 percent against the budgeted 3.3 percent of GDP.
In my opinion, supported by the opinions of several globally renowned economists (J.M. Keynes and Paul Krugman), a fiscal deficit of up to 5 percent of GDP is safe provided the additional revenue is invested in infrastructure and assets creation. To my mind, there is no cause greater than developing India’s long-neglected human assets.
(Dr. A.S. Seetharamu is former professor of education at the Institute of Social and Economic Change, Bangalore)