Education: Higher allocation, better resource utilisation needed

Updated: Feb 16 2002, 05:30am hrs
Economists such as T W Shultze, Gary Becker and Amartya Sen have emphasised the role of education as a critical aide in economic growth in the long run. Knowledge-based sectors, such as information technology, telecommunication and bio-technology, will be driven by the quality of human skills and educational standards will be a critical input in the near future.

Unfortunately, in India, education has been a victim of benign neglect all these years. The adverse fallout on poor quality of human capital and the resultant low productivity have affected the rate and quality of growth.

As Budget 2002-03 approaches, it will be interesting to see if, as usual, issues such as ESOPs (employee stock option plans) or tax breaks for foreign institutional investors hog the limelight, while the crucial issue of education gets mere lip service. The social rates of return on education are quite significant even if they largely accrue to the individual. Moreover, universalisation of elementary education up to 14 years of age as a directive principle incorporated in Article 45 of the Indian Constitution must become an operational imperative.

Though India has made big strides in improving literacy rates and universalisation of education, it still has a long way to go. Data shows that growth of literacy has been steady since 1951. However, it showed any noticeable jump only after 1991. The average decadal growth rate was only 10.3 per cent till 1991, while during the period 1991 to 1997 literacy grew at a clip of 10 per cent. Also commendable is the fact that female literacy has risen by a faster 11 per cent than 9 per cent for men between 1991 and 1997.

Even during the previous decade, female literacy was higher. This trend is also in line with OECD’s Programme for International Student Assessment (PISA) International Comparative Data on Schooling Outcomes. According to this recent study, in many countries, boys have fallen far behind in reading literacy. In every country surveyed, girls were, on average, better readers than boys. Yet, we must be far from complacent as every third illiterate person in the world happens to be an Indian. Moreover, the Decennial Census 1991 put the figure of illiterate adults at over 200 million in the country.

Talking of enrolment figures, there has been a significant jump in Gross Enrolment Ratio (GER) for primary school children at 92.14 per cent in 1998-99. However, GER for secondary stage is quite low at 52 per cent which is a cause of concern. Another disturbing feature has been the rural-urban and inter-state disparity. While gross enrolments in primary and upper primary levels were higher in Assam, Gujarat, Karnataka, Madhya Pradesh, Maharashtra and Tamil Nadu, it was substantially lower in Uttar Pradesh and Bihar.

Only a quick progress in primary education can help India on this front. In fact, it is often joked that the quality of primary education in India is such that unless free food is offered no one attends school. Thus, unless there is a convergence between literacy rates between the privileged and the underprivileged class or the rural and urban areas, India will continue to be home to the largest population of illiterates in the world even as its technically trained manpower increases by the day.

The literacy rate, though steadily rising, cannot keep pace with the growth in population. The biggest challenge thus is to improve the status of primary education. Demand for infrastructure far outstrips the investments made in primary education. It is, therefore, necessary to look at the allocation over the years for education. Expenditure on education in 1996-97 was a low 3.8 per cent of GNP (gross national product). The government has committed itself to raise the share of education in GDP to 6 per cent by the end of the current Plan period (1997-2002). However, given its track record, it seems improbable that the government will actually do so.

Available data for the period 1991-1997 shows that public expenditure as a percentage of GNP has been on the decline. (see table 2). However, there is a clear shift in the priorities of the government towards primary education. The share of primary education (class I-V) and elementary education (class V-VIII) in the total current expenditure on education has been steadily rising from 34.2 per cent in 1991 to 37.1 per cent and 46.3 per cent to 50.4 per cent, respectively, for 2000.

The government is toying with the idea of enhanced legislation in the area. Certain states, like Tamil Nadu, have initiated additional legislative measures such as the Compulsory Education Act for universal participation of all children in primary education. However, all this amounts to mere lip service if allocations are reduced every year.

Even if there is a significant increase in the Plan expenditure for education, past experience shows that effective utilisation of resources remains an area of concern. Sadly, much of this allocation finds its way towards financing non-Plan expenditure, such as salary and maintenance of the large system. Therefore, there is a need for better allocative efficiency as well as monitoring of utilisation to the needy segments if quality of education has to improve in the country. One hopes the Budget 2002-03 takes note of this fact.