In 2019-20, India Funds spent Rs 6.43 lakh crore ($88 billion) of public funds on education. How was this money spent? We explain how the government finances public school education in India, how the money is spent and what can be improved.
Jaipur: India needs to spend 6% of its gross domestic product (GDP) on education, every national education policy (NEP) since 1968 has said.
In 2019-20, 52 years since that recommendation, India spent only 3.1% of its GDP on education, the 2019-20 Economic Survey showed.
One of the results of this under spending on public education is that over one million government schools, where over half (52%) of India’s nearly 248 million children study.
have remained poorly funded. This is among the reasons why learning outcomes in India have been so poor, say experts.
In this pre-budget explainer, we outline how funds are allocated for government-run schools, how the money is spent, and what more needs to be done for effective financing of the sector.
(While the education budget is divided between school and higher education, this explainer concentrates on early childhood and school education.
which is considered the most critical stage of learning and a key to higher incomes and better health in later life.)
What the government spends on
In India, government spending on school education is mostly for government schools (over one million) and a small proportion goes to government-aided schools (84,623).
Private schools (326,228) do not receive government funding but they do receive funds for every student enrolled in Grades I to VIII who is from an economically weaker family.
under the Right to Education Act, which mandates that schools reserve 25% of positions for disadvantaged students.
Both the central and state governments spend on education.
Central spending, full and partial
The central government contributes to education in two ways: through centrally sponsored schemes and central sector schemes.
The first category includes schemes such as the Samagra Shiksha Abhiyan, a central government programmed for school education and teacher training.
which are mostly funded in the ratio of 60:40 by the Centre and the state.
In northeastern states, 90% of the funding for centrally sponsored schemes comes from the Union government.
Central sector schemes–scholarships for Scheduled Castes and Tribes, the Navodaya school network for exceptionally talented children in rural areas, and the Kendriya Vidyalayas for the children of government employees–are completely funded by the Centre.
But these form a small proportion (1-2%) of education funding in India, as per Mridusmita Bordoloi, senior researcher at the Delhi-based research group Accountability Initiative.
The central government also funds the National Council of Educational Research and Training.
the government body responsible for designing and publishing textbooks and teacher training.
“If you look at only the Union budget, the education story in India is incomplete,” Bordoloi said, pointing out that the bulk of funds for government schools come from the state government.
The central government contributes partially to programmes such as those for teacher training and mid-day meals.
State funding
States contribute the most education funds. A state like Maharashtra, for instance, banks on the Centre for only about 7-10% of its school education spending.
But Bihar would get 40-50% of its education funding from the central government, said Bordoloi of Accountability Initiative.
Other than contributing to centrally sponsored schemes, states also have their own schemes, such as Bihar’s incentives for girls in secondary school.
Many times, other state departments, such as the tribal ministry, may contribute too.
States vary greatly in how much they spend on education. Spending, as a share of gross state domestic product (GSDP) in 2017-18.
ranged between 4.3% in Bihar and 1.8% in Maharashtra and Tamil Nadu, found a June 2020 analysis of eight states by Accountability Initiative.
Spending as a proportion of total state government spending varied from 12% in West Bengal and 15% in Bihar, Maharashtra and Himachal Pradesh, the analysis found.
Education expenditure, as a percentage of total government expenditure, declined in six states–Kerala, Maharashtra, Odisha, Madhya Pradesh, Rajasthan and Himachal Pradesh–between 2014-15 and 2019-20, according to budget documents, India Spend reported in September 2019.