Public Expenditure in Education Sector

As per the norms of National policy on education (1986), at least 6% of the GDP must be spent on education. However, successive governments have failed to achieve this target and remained at around 4%. The Union Budget has allocated Rs 72,394 crore to education in 2016-17. Out of which, Rs 43,554 crore is allotted for school education and Rs. 28,840 crore for higher education.

• As education sector needs to be adequately funded, there should be a clearly defined pattern of sharing of funding between the Union and state governments. While central governments are increasing the allocation of funds to the education sector, many state governments are not substantially increasing the allocation for the education sector. It is the time to revise the goal, the central and state governments should spend at least 6% of the GDP towards this sector.
• It has to be ensured that the existing institutions are well developed and on sound resource base in terms of financial, physical and human resources before further expanding the education system with new schools, colleges and universities.
• Reasonable resources have to be allocated to teacher training, modern technology based equipments, libraries, laboratories and quality research.
• Resources to the educational institutions should be allocated in a way that it fulfils the basic needs on the one hand and rewards the performance of the institutions on the other hand.
• In the advanced regions of the world, high quality education systems have been developed exclusively by the state in case of school education. For Higher education, heavy public funding coupled with liberal funding by the society at large, especially through philanthropic donations and endowments from the corporate sector are relied upon. In these societies, fees paid by the students’ forms a minor source of funds. In India too, this framework can be implemented by linking some of the provisions of the Corporate Social Responsibility Act to the education sector and innovative measures to promote individual and corporate donations has to be searched for.
• The profit seeking private institutions should not be promoted by the state as even though these institutions may be good but they may not help in building nation with values.
• The government should devise a 10-20 year national plan of funding of education. The plan should be developed based on the principles of financing of education (adequacy, equity and efficiency) and should be capable of assuring steady flow of funds for the education sector at least for a period of 10-20 year with provisions for rewards and punitive action.

Keeping in mind, the historical and contemporary experience of many countries especially the developed, it is imperative for the state to play an active role in financing education at all levels. It should rely on resources from non-state actors only when needed and treat them only as a supplementary source of funding.