Education spend needs a boost: Centre needs to do more heavy-lifting if public spending on education is to hit 6% of GDP

The allocation for the mid-day meal scheme, now called PM POSHAN, is below both the amount budgeted in FY22 and that spent in FY21.

education budget
The larger picture on Union government expenditure on education is cause for concern.

The Union Budget pencils in an outlay of Rs 1.04 lakh crore in FY23 for the ministry of education; this is an 18.6% jump over the revised estimate of spending last year. While that may seem impressive, the fact is that FY20 spending was a 11.3% jump over FY19’s, and education spending saw a 6% fall in FY21 from the FY20 spending, thanks to the pandemic; it rose a very modest 4.5% in FY22.

Within the overall spending projected for the next year for the department of school education and literacy, the biggest jump is in allocation for the National Education Mission; again, the jump here is moderate, read against the spend the year before the pandemic and the ambition articulated just before the global contagion broke out. The allocation for the mid-day meal scheme, now called PM POSHAN, is below both the amount budgeted in FY22 and that spent in FY21. Against the backdrop of dropouts because of the prolonged pandemic-forced school closure—and the raft of studies that detail the salutary effect mid-day meal has on school enrolment—the cut in funds for mid-day meals seems ill-advised. More so, given the economic turmoil the pandemic has inflicted on low-income households. In the department of higher education, Digital India e-Learning has seen only a modest increase from the spend in FY22, and a fall from the amount budgeted for that year. Given how the Centre has sounded gung ho about giving e-learning a push, this certainly should bring to mind the old money-mouth gap.

The larger picture on Union government expenditure on education is cause for concern. The spend on the education ministry, as a percentage of GDP, has remained in the 0.4-0.5% range during FY18-FY22. This is disheartening and virtually negligible for a developing country like India. At just over 3% of the GDP, public expenditure on education (the Centre + the states) lags the 6% goal significantly; bear in mind, the 6% aspiration is of 1968 vintage, adopted in the National Education Policy that year. That this had to be reiterated again, in the National Education Policy last year, shows how little movement has happened over the decades. And the trend in central spending perhaps indicates that the burden of realising the goal will largely fall to the states even though education, as a governance subject, features in the concurrent list. Contrast this with China, where the public education spending has averaged above 4% since 2012, with a stated aspiration to improve this further; the OECD average, meanwhile, stands as 11%, ranging from 7% to 17%. Just two decades back, India and China were at a similar level of public expenditure on education (as percentages of their respective GDP) and, indeed, China lagged India before that. Needless to say, to be a education (and, consequently, R&D) superpower, India needs considerable stepping up of central and state government spending on education.

Also worrying is the fact that a whopping Rs 62,000 crore of the Rs 1.04 lakh crore outlay is funded from the various education cesses—Rema Nagarajan points out in The Times of India—with just Rs 42,000 coming from the Centre’s own kitty. Indeed, the Centre has been leaning more and more on cesses since 2017, having cut its own outlays. Given cesses don’t feed the states’ coffers—and thus the states likely have little say on the spending from such sources—there seems very little that could accrue in focused intervention to address local needs. A key sector like education cannot be funded by cesses. Even as the finance minister’s Budget speech was heavy on the government’s intention on pushing digital in education and making it future-ready, there has to be greater thrust on fixing present and legacy problems.

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