The Annual Indian Tamasha

12 Mar

“A budget tells us what we can’t afford, but it doesn’t keep us from buying it.”

-William Feather

Every year I get excited to watch the Budget session of the Parliament. The Railways budget is followed by the Economic survey and then the presentation of the financial budget. This generally takes place during the last week of February. The budget is more of an account of the expenditure and the revenue of the Government. But what makes it interesting is the innovative ways and means devised to collect and spend the money. It is also a way to estimate whether the state is able to deliver on what it promises . It seems to have a high aspirational value for both the people and the government.

According to me the two things that makes the Budget engrossing are:

1)   The hype that is created by the media and the complex analysis that ensues.

2)   the fact that it is one of the legislation that impacts  people of all backgrounds. There is something for everyone.

Every year the budget’s main preoccupation is with   Gross Domestic Product (GDP- which is one of the measurements of economic growth) and Fiscal Deficit (where the total expenditure is more than the revenue generated). This year’s budget is no different and it is presented against the backdrop of 5.2 per cent fiscal deficit of the GDP and Wholesale Price Index Inflation at 7 per cent.

Some of the major highlights of the Budget 2013-14 are:

1)   Surcharge of 10 per cent for taxable incomes above Rs. 1 crore. No review of tax slabs. No review on Tax slabs.

2)   Rs. 2 trillion for defence sector

3)   Rs. 1,000 crore working capital for first women’s bank in India.

4)   Rs 5,87,082 crore to be transferred to states under share of taxes and non plan grants in 2013—14. Budget expenditure is Rs 16,65,297 crore and Plan expenditure Rs 5,55, 322 crore.

5)   Rs. 2,13,689 for Social Services (includes plan and non plan expenditure on Education, Youth Affairs and Sports, Art & Culture; Health & Family Welfare: Water Supply & Sanitation;Housing & Urban Development; Information & Broadcasting; Welfare of SCs, STs and OBCs; Labour & Labour Welfare: Social Welfare & Nutrition; and Other Social Services.)

420311_582843725060653_418793391_n

Source: Cartoonist Satish

The overall budget estimates for Plan expenditure for the current fiscal is Rs. 5,21,025 crore and for 2013-14 the raise in expenditure is by 6.58 per cent to Rs. 5,55,322 crore. The revised estimates for the current fiscal stands at Rs. 4,29,187 crore and compared to this figure there is a 29.4 percent more Plan Expenditure. Having given the macro level picture, I would now like to focus on the Education Sector.

“Education is the most powerful weapon which you can use to change the world.”

– Nelson Mandela

 The Ministry of Human Resource and Development takes care of matters related to education. The field of education is considered to be a priority; the FM reiterated this when in his 2013-14-budget speech he mentioned, “Health for all and education for all remain our priorities.

My main contention is that the relative increase in the funds allocated  alone will not determine efficiency or growth of the education sector. Timely and sufficient allocation of funds to schemes is the only way to facilitate productive output. In order to elaborate more on this I will primarily look at Budget outlay and Right to Education.

  • Budgetary Outlay:

The table below gives the estimates of the funds allocated to the Ministry of Human Resource Development.

Ministry

2012-13 Budget Estimates

2012-13 Revised Estimates

2013-14 Budget Estimates

Human Resource Development

*All figures in Crore

 

74,056

66,819

79,451

As percent of Total Union Budget

4.97

4.67

4.77

As percent of GDP

0.74

0.67

0.70

Source: Compiled by Centre for Budget and Governance Accountability (CBGA) from Union Budget documents, GoI, various years. 

 The UPA promise of implementing  the recommendations of the Kothari Commission (1966) remains unfulfilled even in 2013-14. India’s total public spending on Education at 3.31 per cent of GDP (2012-13 BE as per the Economic Survey 2012-13) is nowhere near the promised level of 6 per cent of GDP. Data reveal that the total spending on education was 3.65 per cent in 2009-2010 BE.

The decline in the level of spending is mainly due to:

1)   Progressively decreasing priority of education for the union government even though there has been an increase in allocation  in absolute terms.

2)    Increasing privatisation of education.

The total allocation for Education in 2013-14 (BE) at 0.7 of GDP is marginally better than 0.67 per cent 2012-2013(RE). There is a proportional increase in outlays for education from 4.67 per cent in 2012-13 (RE) to 4.77 per cent in 2013-14 (BE). A major part of the financing of the elementary and secondary education has been through education cess. Minor increase in the outlay for Strengthening of Teachers Training Institutions is inadequate to enhance the quality of education. The outlays for Rashtriya Madhyamik Shiksha Abhiyan (RMSA) has not increased significantly from Rs.3172.63 crore in 2012-13 (RE) to Rs.3983 crore in 2013-14 (BE).

The Annual Status of Education Report (Rural) 2012,points that 23 per cent of schools are privately funded (for children in the age group 6-14 years). The two main reasons for the increase in private funded schools are:

1)   Constraints in the implementation of government policies; and

2)   Poor learning outcomes in the public schools.

The main reasons for the above mentioned are: low financial funding, poor utilization of funds and lack of trained human resources.  In view of this it is necessary to ask the question, if the Government of India has the means to implement their ambitious right to education.

  • Right to Education

A very  ambitious policy adopted by the government is the Right of the Children to Free and Compulsory Education Act, 2009 that came into effect from April 1, 2010. The main goal was to provide free and compulsory education to children in the age group of 6-14 years. There are enough number of issues with this policy. This Act is to be implemented through the  Sarva Siksha Abhiyan(SSA) a centrally sponsored plan that is operational form 2001. SSA accounts for 20 per cent of the total education budget, out of which 35 per cent is met through Plan spending and 65 per cent through non-plan expenditure.

The 12th Plan Working Group recommended that for the first three years of the 12th Plan Rs. 1,46,825 crore must be allocated, thus making it Rs. 48,941 crore for 2012-13. The 12th plan dispensation watered down the allocations of SSA for five years to Rs.1, 92,726 crore making it Rs. 38, 545 crore  per year. “The Department Related Parliamentary Standing Committee Report on Human Resource Development observes that 2012-13 (the 1st year of the 12th Plan) saw a shortfall of Rs.15,000 crore in terms of what was allocated (Rs.25,555 crore) to what was demanded by the Department (Rs.40,000 crore).”  This gap has increased in the budgetary allocation of 2013-14. The lack of financial help has affected states like Uttar Pradesh, Andhra Pradesh, Bihar and Chhattisgarh the most.

The financial gap has impacted the implementation and even the quality of the output.

One such example is that of infrastructure shortfalls. To ensure universal access to education adequate schools and qualified teachers needs to be in place. Over  thirty-five per cent of teachers positions are vacant. There are some serious regional disparities when it comes to constructing of schools. For setting up of Primary Schools states like Himachal Pradesh (with 11.25 per cent completion), West Bengal (59.25 per cent) are among the poorest-performers. For Upper Primary Schools, Himachal Pradesh 0 per cent, Meghalaya (29.94 percent), Nagaland (34.56 percent) and West Bengal (44.99 percent) reveal the skewed regional progress.

 Under the SSA, the government subsidises both the aided and unaided schools.To understand the vast difference that takes place, the following table shall explain:

 Select Unit Costs for SSA-RTE:

 

Unaided Aided
Reimbursement of Expenditure incurred on 25% of childrenadmitted to unaided schools

 

9190 Nil
Uniform for both Primary and Secondary

 

2500 1300
Textbooks for both Primary and secondary

 

1750 400
 *All Figures in Rupees

The deadline to comply with the RTE norms is 31st March 2013. The lack of funds and the improper utilization would make the compliance close to impossible.

To sum up, I do not think that RTE was a good idea for legislation. The government can still achieve universal education through SSA. The accountability factor is important, but RTE has increased legal and financial woes for itself.There should be substantial allocation of funds for the training of quality teachers. Just by relative increase in allocation the government cannot expect results.  Funding needs to have some realistic accountability so that reasons for failures are identified and those responsible for it are suitably dealt with.The other aspect is even though there is high inflation and fiscal deficit, the government should prioritise education and health sectors. Even if we leave aside its intrinsic value it can be safely said that  it is based on these sectors that future of the nation will be secured. With the growing pace of the economy, it is only through a literate population, that the momentum can be sustained.

To conclude, it is high time that Budget is not about mere allocations. It needs to be much more dynamic to still have its relevance in the future.

To have a good laugh and understanding of the budget, go through this link.

 

By: Ashwin Parthasarathy

Reference:

A Patchwork of Promises

At the Feet of Rating Agencies

Budget 2013-14: Highlights

Budget musings

Budget 2013-2014, Speech of P. Chidambaram, Minister of Finance, February 28, 2013

Economic Survey 2012-2013- Human Development

How has the Dice Rolled?

Plan Expenditure 29.4% more than revised estimate

Public spending on Education, total (% of GDP)

The Budget of the Middle Class

Union Budget 2013-14: Department of School Education and Literacy

Union Budget 2013-14: Department of Higher Education

 

3 Responses to “The Annual Indian Tamasha”

  1. jankipandya March 28, 2013 at 7:23 am #

    Budget is something I still do not understand and I dont think I even want to make an attempt to understand it because of the complex manner in which it is put forth. However loved the Ronald Reagan quote.

  2. SSA Chhattisgarh March 29, 2013 at 8:51 am #

    Hi there i am kavin, its my first occasion to commenting anyplace, when i read this piece of writing i thought i could
    also create comment due to this good article.

  3. viajes baratos a marrackech April 6, 2013 at 3:45 am #

    Thank you for the auspicious writeup. It in fact was a entertainment account it. Glance complicated to far added agreeable from you! However, how could we keep in touch?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: