chapter 3 household expenditure on education in...
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CHAPTER 3
HOUSEHOLD EXPENDITURE ON EDUCATION IN INDIA
3.1. Introduction
Achievement of inclusive growth in India as per the mandate of the eleventh
five year plan is a daunting challenge for policy makers. It is argued in the policy
circle and by a strong group among the academia that there is indeed a stronger case
for economic reforms with greater infusion of market principles and a larger role of
the private sector to maintain the tempo of India’s inclusive growth. However, our
achievement in the realm of human development since independence has been dismal
as several indicators would show that disparities and deprivation have only worsened
over the years. The social fabric of the nation is under stress as discontentment among
various sections of the population is brewing. But, growth with worsening disparities
of various kinds is argued to be an inevitable outcome of market oriented reforms.
Education being an important instrument for achieving inclusive growth, the issue is
whether we should continue to support marketisation of education to realize our
mandate of inclusive growth (Chattopadhyay, 2007).
There has been an unmistakable tendency towards marketisation of education
as the growing size and dominance of the private providers at all levels of education.
It is also relevant to note that one of India’s main hurdles in achieving development
also lies in education, as the quality of education remains poor for the majority of the
population. Over the years, higher education has gained importance in India’s policy
landscape as the entire centre realized albeit of late, that India’s strength lies in
education, particularly in higher education in the emerging global knowledge
economy. Globally, public authorities and other institutions such as United Nations
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Scientific and Cultural Organisation (UNESCO) and World Bank are very keen in the
development of education especially in the poverty ridden countries of the world.
3.2. Global Educational Developments
Most of the developing countries are making massive efforts to achieve
massive primary education and expansion of secondary education (Dreze and Sen,
1995). It is accepted that though primary and secondary education are important, it is
the quantity and quality of the higher educational system that lead to the
transformation of a marginalized economy into a dynamic economy. In countries
where, the focus is on arts and humanities with little relation to the skills required in
the industrial economy, this leads to the problem of over–education in those countries.
From the focus of primary and secondary education, now there is emphasis on higher
education in the developing countries of the world. It is one of the most important
means of achieving economic development. It is now realized that, without a strong
base in higher education, the developing countries may find it increasingly difficult to
benefit from the global knowledge economy (World Bank, 2000a). For such
countries, the importance of higher education in support of the general educational
system has become increasingly important as they moved from primary education to
the progressive universalisation of secondary education and become stricter in
enhancing higher educational qualifications for overall development of a nation.
For the higher educational sector, the main purpose is to equip people with
necessary analytical skills to lead the modern knowledge economy (World Bank,
2002a). Traditionally, public expenditure represents a form of government
intervention designed to promote locative efficiency through correction of market
failures, to redistribute resources equitably and promote economic growth and
stability (Musgrave, 1959). Education for All (EFA) is an international initiative first
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launched in Jomtien, Thailand, in 1990 to bring the benefits of education to ‘every
citizen in every society’. In order to realize this aim, a broad coalition of national
governments, civil society groups and development agencies such as UNESCO and
the World Bank committed to achieving three specific educational goals such as 1)
expand and improve comprehensive early childhood care and education, especially
for the most vulnerable and disadvantaged children, 2) ensure that by 2015 all
children, particularly girls, those in difficult circumstances, and those belonging to
ethnic minorities, have access to and complete, free, and compulsory primary
education of good quality and 3) Ensure that the learning needs of all young people
and adults are met through equitable access to appropriate learning and life–skill
programmes. Similarly, the targets of Millennium Development Goals (MDGs)
include: 1) achieve 50 percent improvement in adult literacy by 2015, especially for
women, 2) achieve equitable access to basic and continuing education for all adults,
3) besides this, eliminate gender disparities in primary and secondary education by
2005, 4) achieve gender equality in education by 2015, with a focus on ensuring girl’s
full and equal access to and achievement in basic education of good quality and 5)
improve all aspects of the quality of education and ensure the excellence of all so that
recognised and measurable learning outcomes are achieved by all, especially in
literacy, numeracy and essential life skills.
After a decade of slow progress, the international community reaffirmed its
commitment to EFA in Dakar, Senegal, in April 2000 and again in September of that
year. At the latter meeting, 189 countries and their partners adopted the two EFA
goals that are also Millennium Development Goals (MDGs). Although MDGs 2 and 3
refer only to issues of universal primary education and gender parity, respectively, the
World Bank recognizes that achieving these goals requires supporting the full EFA
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commitment. Achieving the education for all is critical for attaining all MDGs as part
of the direct impact of education on child and reproductive health. In addition, EFA
has created a body of experience in multi–partner collaboration with countries and
organizations to achieve the 2015 targets. In the context of EFA and other related
developments in the global higher education, it is important to examine the financial
commitment of countries to various types of education in the world.
3.3. Global Expenditure on Education
The level and the composition of government expenditure can have conflicting
considerations, such as growth, price stability and the payments equilibrium. The
redistributive powers of the state, through expenditure emanates from the normative
arguments in favour of greater equality. In the Keynesian Paradigm, public
expenditure promotes growth through upward shift in effective demand in an
economy operating at less than full employment level. However, it is found that the
link between public expenditure and growth is contingent upon the nature of
expenditure. Similarly, in the framework of endogenous growth theory, public
expenditure on investment in areas like infrastructure, human capital and science and
technology exerts positive influence on economic growth (Roemer, 1994; Tanzi and
Zee, 1997).
The expenditure on education by the public and private agencies has a crucial
role in the growth as well as the development of an economy. Total expenditure of
education of a country has the prominent role in its social and economic development.
The public authorities and the private agencies such as households and other private
agencies are the major spenders on education. The total public expenditure on
education in the world and the relative share of various countries of the world give a
broad picture on the country–wise expenditure on education. Out of the total public
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expenditure on education in the world, United States of America (USA) alone has a
share of 28 percent, followed by China and Japan (both with 6 percent), India (5
percent) and Brazil (3 percent) during the year 2004 (Table 3.1 and Figure 3.1).
Expenditure on education, population and Gross Domestic Product (GDP) can give a
broad picture about the financial position and the required expenditure to some extent.
It is revealed that, USA has only 4.5 percent share of world population while it has 28
percent of the total world public expenditure on education and 20.61 percent share of
the world GDP respectively in the years, 2010, 2004 and 2008.
Table-3.1
Distribution of Global Public Expenditure on Education, Population
and Gross Domestic Product (GDP) by Country
Country
Percentage to Total Global Public Expenditure on Public
Expenditure on Education of the Countries in the World (2004)
Percentage Share of GDP in World GDP
(2008)
Percentage to Total Population of World
(2010)
U.S.A 28.00 20.61 4.50
China 6.00 11.35 19.40
Japan 6.00 6.35 1.90
India 5.00 4.75 17.50
Brazil 3.00 2.85 2.80
Other Countries
52.00 54.09 53.90
Total 100.00 100.00 100.00
Note: Distribution is Calculated by Using PPP US$
sources: 1. Computed from UNESCO Institute of Statistics (UIS), 2007 2. EFA, UNESCO, Oxford, Various Issues
It is clear that, the USA has dominance in the share of Gross Domestic
Product (GDP) as well as the public expenditure on education in the world. Moreover,
high level of relative public expenditure on education can influence the GDP of USA.
In other words, when the expenditure on education increases, there will be
corresponding increase in the GDP of a country. Besides this, private and public
expenditure on education, total amount and its allocation to various level
of education, initial stage of education and size of the relevant age group
determine the educational outcome of a nation. The country
on education has a crucial role in determining the relative contribution
sectors in the total expenditure on education in a country. The discussion was more on
a general perspective based on the
perspectives of the group of countries. The overall spending and nature of expenditure
together determine the result to the education
Percentage–Wise
Source: UNESCO Data Series, Various Issues
The pattern of public expenditure on education as a
Product (GNP) in the group o
that the low education may lead to
picture will be clear when the discussion delve
education. Finland’s expenditure on higher education is 1.70 percent of GDP while it
52%
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expenditure on education, total amount and its allocation to various level
of education, initial stage of education and size of the relevant age group
determine the educational outcome of a nation. The country–wise public expenditure
on education has a crucial role in determining the relative contribution
the total expenditure on education in a country. The discussion was more on
spective based on the expenditure on education in terms of macro
spectives of the group of countries. The overall spending and nature of expenditure
together determine the result to the educational investment.
Figure-3.1
Wise Distribution of Total Global Public Expenditure
on Education by Country (2004)
Source: UNESCO Data Series, Various Issues
The pattern of public expenditure on education as a percent of
in the group of nation’s show that, it may be misleading to
that the low education may lead to high level of socio–economic development
picture will be clear when the discussion delves into the details of the expenditure on
Finland’s expenditure on higher education is 1.70 percent of GDP while it
28%
6%
6%
5%3%
expenditure on education, total amount and its allocation to various levels and types
of education, initial stage of education and size of the relevant age group can
wise public expenditure
on education has a crucial role in determining the relative contribution of various
the total expenditure on education in a country. The discussion was more on
in terms of macro
spectives of the group of countries. The overall spending and nature of expenditure
Distribution of Total Global Public Expenditure
cent of Gross National
may be misleading to conclude
economic development. The
into the details of the expenditure on
Finland’s expenditure on higher education is 1.70 percent of GDP while it
U S A
China
Japan
India
Brazil
Other countries
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is 0.20 percent in Indonesia and 1 percent in India in the year 2005. It is revealed that,
developing countries spend less than US$1000 per–student whereas developed
countries spend close to US$10000 during the same year. It is noticed that India
spends only US$400 on higher education (on all types) for the year 2005. Per–student
public expenditure on higher education in India is very low compared to other
countries of the world (Table 3.2).
Table-3.2
Global Per–Student Public Expenditure on Higher Education (2005)
Country Percent of GDP
Per–Student Public Expenditure
PPP US$
Per–Student Public Expenditure as a Percent
of GDP Per capita
Finland 1.70 9996 34.10
Sweden 1.50 13,035 44.10
U.S.A 1.30 10,365 27.60
France 1.10 9,996 34.10
India* 1.00 400.00 N.A
U.K 0.80 8,100 27.70
Australia 0.80 7,041 23.20
Brazil 0.70 2,938 35.90
Russia 0.62 1024 10.80
Japan 0.54 4830 17.00
China 0.50 2728 53.00
Korea 0.50 1841 9.00
Philippines 0.40 575 12.40
Indonesia 0.20 465 13.30 Notes: 1.*: Financial Year 2005-06 2. N.A: Not Available Sources: 1. Computed from Global Education Digest 2007, UNESCO, Oxford 2. UNESCO Data Base, Various Issues
The contribution of various sectors to the total education can give valuable
insights to the various stages of educational development of a country. The data
reveals that, the Dakar frameworks forces governments and donors to provide the
resources to achieve EFA and calls for creative and sustained mobilization of
resources from other parts of society, including the private sector and Non–
Governmental Organizations (NGOs). But, the reality is that, still the households
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make a noticeable contribution to the total expenditure on education of various
countries in the world. It is noticed that, the contribution of the public sector is 97.5
percent in Portugal and household’s contribution is a mere 2.5 percent towards the
total expenditure (on all levels of education) in the year 2004. On the contrary,
households contributed 41.2 percent of the total expenditure on education (on all
levels of education) in Philippines in the year 2004 (Appendix–2.3). These two
countries (Philippines and Portugal) stand at the extreme positions of household
contribution to the total expenditure on education in the world. However, most of the
countries are in a central position in terms of the relative contribution of households
towards the total expenditure on education. It is observed that, major portion of the
total expenditure is coming from the government sector in almost all countries of the
world. The level of education and the contribution of various sectors to total
expenditure on education show that the private sector has remarkably increased its
share in most of the countries in the world (Appendix–2.1, 2.2 and 2.3).
As far as the public expenditure on education is concerned, developed
countries spent 5.0 percent of GNP to education which increased to 5.2 percent over
the period between 1999 and 2008. However, the developing countries spent 4.4
percent and 4.2 percent respectively during the same period. North America/West
Europe tops with 5.5 percent in 2008 while Central Asia has allocated only a 3.2
percent of the GNP for education in the year 2008. The difference in the level of
GNP, participation rates of the relevant age group and other factors may influence the
relative efforts of the different countries towards education. In terms of public
expenditure towards education as a percent of GNP, there are a few differences
between the developed and developing countries. Developed countries earmarked 12
percent to education from the total government expenditure, while developing
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countries and countries in transition have 16 percent and 17 percent respectively in
the year 2008. Similarly, sub–Saharan Africa contributed 18 percent to education and
it is only 12 percent for central and Eastern Europe during the same year (Appendix–
2.4). Therefore, it is important to examine the nature of expenditure on education of
the major countries of the world. The nature of expenditure within a particular level of
education gives valuable insights into the expenditure priorities of governments and
households. The expenditure in terms of GDP, the expenditure at various levels, the
percentage contribution of various sectors to education finance and the nature of
expenditure are broad methods to measure the financial commitment from various
aspects. It is clear that, per–student public expenditure on education is low in India
compared to the developed countries of the world. Therefore, it is important to
examine the Indian educational system.
3.4. Developments in Indian Education
With a majority of young people in its vast population of about 1.2 billion,
India is seen as an engine of global growth. It has now become a major player in the
global economy. Skill–based activities and a large pool of qualified manpower have
made noticeable contribution to this growth. From the early 20th century onwards,
there have been several high level committees instituted by the government started to
give policy orientations to the improvement of education in India. The first
commission on education set up immediately after Independence was the University
Education Commission in 1948 and in its report in 1949 recommended that University
Education should be placed in the concurrent list so that there is a national guarantee
for minimum standards in university education. The planning process in the country
began in 1951. The problems of secondary education were considered in a
comprehensive manner with the appointment of the secondary education commission
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in 1952. Kothari Commission (1964-1966) had suggested that the government
expenditure on total education should be a minimum of 6 percent of GDP. The
Central Advisory Board on Education (CABE) on financing higher education
reiterated the same. Moreover, it was suggested that the government’s financial
support to higher education should be at least 1.5 percent of GDP. However, higher
level of funding alone is not a panacea for improving the higher educational system of
any nation including India (Agarwal, 2009).
With a view to implement the provisions contained in article 45 of the
Constitution, the government of India, the state governments and the union territories
took a number of measures to universalize elementary education to all children
between 6 to 14 years. As a follow up, Article 21, Government of India (GOI) decided
to introduce the Right to Education Bill (RTE) in 2005. However, it was introduced in
the parliament only in the year 2008. To enhance the facilities with an increase in the
enrolment in all levels of educational sector GOI increased its allocation in the 11th
five year plan to around 20 percent of the total plan expenditure. To enhance the
education facilities especially in the higher education sector, it is important to increase
the level of participation of government, financial institutions, families and other
private institutions. In this background, GOI introduced revised education loan
scheme in 2001-02 to enhance the financing options of the students. To expand the
educational facilities in the country, GOI has allowed foreign educational institutions
in India. There are various other demand and supply factors such as high level of
inflation, success of employment generation programmes and high female literacy
which can improve the educational investment in India (Tilak, 2003).
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3.4.1. Higher Education Growth in India
Higher Education is rooted in the country’s history and culture, its growth
depends upon the changing socio–economic environment of the country. Though the
modern higher education in India is largely based on the British model, it has also
inherited the oriental culture, where learning has taken place for its own sake, without
reference to economic or other external factors. Indian education remained as a small
system until Independence in 1947, and then saw an isomorphic growth of institutions
before being influenced by the higher educational system in the USA, which was
recognized as a powerful centre of learning. To a large extent, the academic system
and the fundamental ethos (core principles, administrative organizations, the
professoriate, personal affairs, research organizations, curriculum, teaching methods,
examination systems and so on) is still akin to the old universities in Britain. Overall,
the number of universities has increased from 25 in 1950 to 371 in 2006, the number
of colleges has increased from 700 to 18,064 and the enrolment has increased from a
tiny base of 0.1 million to a whopping 11.2 million. Out of the total number of
universities, 6 central and 114 state universities have affiliating powers to the colleges
and courses in India. Together, these universities have affiliated more than 18,000
colleges in the country. It is more than 34000 in the year 2010-11.
Large number of colleges were started and affiliated to the new and the
existing universities. The government set up universities and colleges at places not
having higher education facilities. Courses in new and under–represented subject
areas were started. This resulted in geographical dispersal of higher education
facilities and broadened the bases of higher education. From 1980s onwards,
expansion is largely driven by private initiatives. After 2000s, there is a consolidation
of private initiatives, particularly in the area of professional higher education. Despite,
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explosive growth of private professional education, majority of the universities and
colleges still impart education at the undergraduate level in arts, science and social
sciences. A large number of private institutions at the elementary and secondary
education had come up as viable enterprises all over the country. Due to financial
constraints, the government found it difficult to set up new universities and colleges.
According to some observers, this marked the withdrawal of the government from
taking over additional responsibility for higher education. Thus, this period saw the
emergence of new types of providers (Tilak, 2009).
Private institutions proliferated, distance education programs gained wider
acceptance, public universities and colleges started self–financing programs and
foreign institutions started offering programs either by themselves or in partnership
with Indian institutions and the non–university sector grew rapidly. As a result, the
entire higher education landscape got transformed over the past 25 years. Growth of
financially independent private institutions is the most significant development over
the past few decades. Faced with financial constraints, the government had no option
but to reluctantly allow their entry. During the late 1990s, the main mode of growth of
private institutions was through establishing colleges affiliated to the existing
universities or new universities carved out from the existing ones. By late 1992, many
private promoters were getting uneasy of the regulatory controls. Private institutions
grew in the country in a diverse manner and their impact on provision for higher
education is most significant so much so that private higher education now occupies
the centre stage in the debate on higher education (Tilak, 2009). The post 1980s also
saw growth of the non–university sector. The size, structure and growth of the Indian
higher education system are riddled with many contradictions. Until 1980-81, growth
was mainly in colleges affiliated to public universities. After 1980-81, growth was
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primarily in private professional colleges and is still continuing. The government
plans to expand Gross Enrolment Ratio (GER) of higher education in the country.
This requires an additional capacity for 7.5 million students. This growth momentum
has to be sustained and further accelerated over the next few years. Recently, the
Indian government has decided to set up several IITs, IIMs and other premier
institutions for higher professional education. Sixteen new central universities and 14
world class universities have also been proposed, this would be the largest ever
expansion. From the early 1990s, faced with paucity of funds, public institutions have
expanded primarily through self–financing programmes.
The GER of higher education is 18 percent in 2012 which is among the
highest for countries at India’s level of development. The 12th five year plan aims at
raising the GER to 25 percent by 2017, which is both desirable and achievable. While
GER are not bad by relevant international standards, India is about four decades
behind in most of the advanced nations in enrolment. The advanced countries are
close to universal higher education. But, it must be recognised that enrolments have
grown based on the rise in demand for qualified people, with agriculture contributing
less than 5 percent (developed nations) of the work force. The biggest challenge is
that the students do not choose to study in fields that will best contribute to economic
growth–or to their own job prospects. Besides this, the Indian higher education is not
effective as developed countries.
3.5. Public Expenditure on Education in India
Education is financed by both governmental and private resources. However, a
major commitment from government is required in financing education because of the
positive externalities associated with it. Thus, it is generally recommended that the
burden of financing higher education should be shifted to private individuals. The
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liberalisation process feeds this line of thinking. This also gets reflected in our
changing educational policies with greater emphasis on generation of additional
resources through conventional and non–conventional measures. The national policy
on education (1986 and 1992) as well as the recommendations made by the University
Grants Commission (UGC) recognised the need for reducing the role of the
government in education sector and increasing the role of private sector, particularly
in the sphere of higher education (Tulasidar, 1993). Lack of political will is evident by
looking into the present status of education in India. Under–funding of education
remains the major constraint of educational development in the country despite all the
national education commissions from 1964 onwards recommending and all political
parties readily agreeing to the need for setting apart 6 percent of the GNP for
education. But the actual ratio has never reached anywhere near the target despite
massive increases in enrolment at all stages.
During the structural adjustment regime in the nineties, the ratio came down
from 4.1 percent in 1991 to 3.2 percent in 1997 (Sabni and Kale, 2004). There are
several important sources of educational finance: the public sector which includes the
expenditure by the central, the state, the local bodies and foreign agencies which
primarily transferred through the central budgets, and household and non–household
private agencies. In post–Independence India, education was the primary
responsibility of the individual states, but in 1976 it was placed in the concurrent list
denoting the joint responsibility of the central and the state governments. The
contribution of different sectors to the total expenditure on education is necessary to
understand the stage and position of educational development in India. It is seen that
state governments and Union Territories (UTs) together contributed the lion’s share in
the total spending on education in India. Public expenditure on education in India was
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a mere 0.6 billion in 1951-52 which substantially increased to 1865 billion in the year
2008-09 (Table 3.3). Further, public expenditure on education1 was 0.6 percent and 3
percent of GDP respectively for the same period. However, the highest (3.50 percent)
allocation was in 2001-02 and 2002-03. But, after the initiation of economic reforms,
it consistently decreased and reached to 3 percent in 2008-09.
Table-3.3
Public Expenditure (`) on Education in India
Year Public Expenditure
on Education (`in Billion)
Expenditure on Education as a Percent to Total Public Expenditure
Expenditure on Education as a
Percent of GDP
1951-52 0.60 7.90 0.60
1961-62 2.60 11.70 1.40
1971-72 10.10 9.50 2.00
1981-82 43.00 10.30 2.50
1991-92 223.90 13.10 3.40
2001-02 798.70 12.90 3.50
2002-03 855.10 12.60 3.50
2003-04 890.80 12.00 3.20
2004-05 966.90 12.10 3.10
2005-06 1132.30 12.70 3.20
2006-07 1373.80 13.30 3.20
2007-08 1614.20 13.30 2.90
2008-09 1865.00 13.60 3.00
Source: Department of Secondary Education, Various Issues, MHRD, GOI
It was 3.40 percent in 1991-92. The expenditure on education as a percent of
total public expenditure has increased marginally from 12.70 percent in 2005-06 to
13.60 percent in 2008-09. However, the percentage share of each sector to the total
expenditure on education had noticeably changed in the year 2003-04. The per–
student public expenditure on higher education varies from `13019.03 in 1993-94 to
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`10341.18 in 2003-04 (Table 3.4). However, the expenditure on elementary education
increased from `1198.61 to `1786.04 during the same year. The expenditure on
secondary education increased from `5445.30 in 1993-94 to `5660.47 in 2003-04.
The CAGR of elementary education, secondary education and higher education is
5.10 percent, 1.40 percent and 0.90 percent respectively during the period 1993-94 to
2003-04.
Table-3.4
Average Annual Per–Student Public Expenditure (`) on Education
in India (1999-2000 Prices)
Year Elementary Education
(1)
Secondary Education
(2)
Higher Education (General
and Technical) (3)
Percentage Change
(1)
Percentage Change
(2)
Percentage Change
(3)
1993-94 1198.61 5445.30 13019.03 0.00 0.00 0.00
1994-95 1152.41 5213.58 12673.89 -3.85 -4.26 -2.65
1995-96 1257.17 5397.94 11214.15 9.09 3.54 -11.52
1996-97 1393.65 5586.02 9639.02 10.86 3.48 -14.05
1997-98 1489.22 5712.88 9851.19 6.86 2.27 2.20
1998-99 1708.15 6490.76 10573.17 14.70 13.62 7.33
1999-2000
1792.00 7392.00 13219.00 4.91 13.89 25.02
2000-01 1773.22 6675.69 13024.73 -1.05 -9.69 -1.47
2001-02 1843.98 6034.59 10899.02 3.99 -9.60 -16.32
2002-03 1722.28 5785.35 10709.99 -6.60 -4.13 -1.73
2003-04* 1786.04 5660.47 10341.18 3.70 -2.16 -3.44
CAGR - - - 5.10 1.40 0.90
Note:* Revenue Estimates
Source: Selected Educational Statistics, Various Issues, MHRD, GOI
It is observed that, the CAGR of expenditure on elementary, secondary and
higher education was 13.7 percent, 15.9 percent and 15.2 percent respectively during
the period 1951-52 to 1979-80. The CAGR of expenditure on elementary education
has grown to 14.7 percent while higher education growth rate declined to 13.5 percent
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during the period 1980-81 to 2003-04 (Table 3.5). The growth rate of central
expenditure on elementary education increased from 8.8 percent in the former phase
(1951-52 to 1979-80) to 31.8 percent in the later period (1980-81 to 2003-04) and
from 10.5 percent to 20 percent in the case of secondary education in India. However,
in the case of higher education, it decreased from 18.7 percent in the former period to
11.1 percent respectively in the later period.
Table–3.5
Compound Annual Growth Rate (CAGR) of Public Expenditure (`̀̀̀) on
Education in India (1999-2000 Prices)
Item 1951-52 to 1979-80 (CAGR) 1980-81 to 2003-04 (CAGR)
Elementary (Total) 13.7 14.7
Secondary (Total) 15.9 14.5
Higher (Total) 15.2 13.5
Elementary (Central) 8.8 31.8
Secondary (Central) 10.5 20.0
Higher (Central) 18.7 11.1
Note: CAGR: Compound Annual Growth Rate
Source: Computed from Analysis of Budgeted Expenditure on Education, Various Issues, MHRD
Even though, absolute amount allocated to education has increased, it is clear
that public expenditure on education declined in terms of percentage change during
the period under consideration. In other words, public sector remarkably retreated
from the total expenditure on education in the country. This will adversely affect the
participation of poor students in education. The overall size of the government sector
(centre plus states) expenditure, after reaching a peak of 32.3 percent in 1986-87
showed a steady decline up to the first half of the nineties. Out of the total expenditure
on all levels of education (Government and households together), state governments
and UTs contributed 61.3 percent followed by households (31.6 percent) and central
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government (7.1 percent) in India for the year 1995-1996 (Tilak, 2003). For
elementary education, the households contributed 37.8 percent and it is 27.4 percent
for secondary education for the same period. Household contribution is significant
(28.2 percent) in university and higher education in the year 1995-96 (Appendix–2.5).
In terms of relative priorities, the public expenditure on higher education suffered
severely in India. The contribution of the Central Government to the total expenditure
is around 10 percent in India for the year 2004-2005. The major share of expenditure
on education is borne by the state and UTs and it comes to 87.12 percent in 1992-93
and 67.89 percent in 2005–06 (B.E.) in the expenditure by all the departments on
education. However, the education departments contributed 90.61 percent and 76.45
percent respectively during the same year.
The country’s educational system suffers today not due to the lack of policy
recommendations or programmes of action but due to the failure in their
implementation. It is noticed that Indian education is a clear case of a Niagara of
reports on educational/policy reports and a Sahara of action (Pradhan etal, 2000). The
Review Committee Report 1992, itself confessed that much of what is contained in
this report has already been dealt with commissions and committees who were called
upon to go into the educational policy from time to time from the 19th century
onwards. Part of the reason for this failure in implementation lies in the failure of the
committees and successive governments to appreciate the trade–offs involved in
following multiple objectives. They did not take into account the strength of
resistance to institutional changes from well–entrenched interest groups. They also
did not suggest concrete methods for mobilizing resources. Another important feature
of public financing of higher education is the crowding out of public financing of
higher education by the elementary education in the second phase. It may, however,
92
be argued that in the first phase it is the higher education that has crowded out
elementary education. Thus crowding out as a whole does not seem to be an important
factor. However, the phenomenon of crowding out is quite prominent with respect to
central government expenditure on elementary, secondary and higher education. The
overall pattern of expenditure was primarily shaped by the central government, while
the state’s expenditure remained stable at around 15.16 percent of GDP in India. An
analysis of the India’s union budgets of various years, indicate that, the trends of
social services expenditure2 of the general government3 indicates that the share of
social expenditure in the total general government expenditure has substantially
increased from 18.9 percent in 1986-87 to 19.0 percent in the year 2003-04 after
reaching a peak of 22.2 percent in 1998-99. Expenditure on social services by the
general government as a proportion of total expenditure increased from 21.1 percent
in 2005-06 to 23.8 percent in 2008-09 and again to 25.2 percent in 2010-2011(B.E)
(Tilak, 2009).
3.5.1 Public Expenditure on Higher Education in India
Public expenditure on higher education has increased from 0.19 percent of
GDP in 1950-51 to 0.66 percent of GDP in 2004-05 (Table 3.6). Since the beginning
of 1990s, public expenditure on higher education has been subject to severe budget
squeezes. It is noticed that, the expenditure on higher education was 0.98 percent of
GDP in 1980-81 while expenditure declined to 0.66 percent in 2004-05. Similarly,
expenditure on higher education with respect to total expenditure on education was 29
percent which decreased to 18 percent respectively during the same year. This trend
clearly reveals that expenditure on higher education has substantially declined after
the introduction of economic reforms in the country. The share of education as well as
the amount has to be increased with a proper blend of outlay and outcome to increase
93
the stock of educational capital in India. It is clear from the Figure 3.2 that the centre
and the state government’s priority are on the elementary education. Therefore, higher
education got little attention in India in the year 2008-09. The trend of public
expenditure in higher education constitutes two important phases. A phase from 1951-
52 to 1980-81 is a high growth phase and the second phase from 1980-81 to 2004-05
is a low growth phase in higher education.
Table-3.6
Public Expenditure (`) on Higher Education in India
Year Total Expenditure on Education as a Percent of GDP
Expenditure on Higher Education as a
Percent of GDP
Expenditure on Higher Education as a Percent
of Total Expenditure on Education
1950-51 1.20 0.19 20.00
1960-61 1.52 0.39 22.00
1970-71 2.11 0.77 27.00
1980-81 2.98 0.98 29.00
1990-91 3.84 0.77 20.05
2000-01 4.28 0.89 20.55
2001-02 3.50 0.69 18.06
2002-03 3.50 0.70 18.42
2003-04 3.20 0.62 18.08
2004-05 3.10 0.66 18.00
Source: Selected Educational Statistics, MHRD, GOI, 2004-05
The declining trend of central government expenditure on education in tune
with the economic reforms and is one of the important reasons for the declaration of
the public expenditure on education in India. The states in India were constrained by
fiscal shortages and they found it very difficult to invest in the higher education. The
deceleration in the public expenditure on higher education may be the result of three
factors such as deceleration in the public sector GDP, declining tax–GDP ratio and
crowding out of public expenditure for higher educ
(Chattopadhyay, 2007).
GDP has fallen from 7.73
period 1981-82 to 2002
the former phase has grown at 17
the second phase.
Sector–Wise Public
Note: All Values are in Percentages,
Source: Analysis of Budgeted Expenditure on Education
The CAGR of state plan and non
grown at 15 percent and it has declined sharply to 11
Thus, the decline in the rate of growth of public expenditure by the centr
sharper in comparison to the decline in the rate of
state. The former phase in the growth of public expenditure was a high growth phase
in spite of the fact that the rate of growth of GDP was much lower in the former phase
at 3.35 percent as compared to the 5.42
29.34
0.46
0.4711.89
94
crowding out of public expenditure for higher education by other sectors
(Chattopadhyay, 2007). Firstly, the rate of growth of public sector contribution to the
GDP has fallen from 7.73 percent in 1960-61 to 1980-81 and 6.33
2002-03. The CAGR of central plan and non–plan expenditure in
the former phase has grown at 17 percent and it has declined sharply to 10
Figure-3.2
Public Expenditure on Education by Education Department
in India (2008-09)
Percentages, Revenue Account (Plan and Non–Plan)
Source: Analysis of Budgeted Expenditure on Education, MHRD, GOI, Various Issues
The CAGR of state plan and non–plan expenditure in the former phase has
cent and it has declined sharply to 11 percent in the second phase.
Thus, the decline in the rate of growth of public expenditure by the centr
in comparison to the decline in the rate of the growth of expenditure by the
hase in the growth of public expenditure was a high growth phase
in spite of the fact that the rate of growth of GDP was much lower in the former phase
cent as compared to the 5.42 percent rate of growth of GDP in the second
52.13
11.89
4.780.87 0.06
Elementary
Secondary
Adult
Language & Development
University & Higher
Technical
General
Physical
ation by other sectors
Firstly, the rate of growth of public sector contribution to the
6.33 percent during the
plan expenditure in
cent and it has declined sharply to 10 percent in
Expenditure on Education by Education Department
plan expenditure in the former phase has
cent in the second phase.
Thus, the decline in the rate of growth of public expenditure by the centre is much
growth of expenditure by the
hase in the growth of public expenditure was a high growth phase
in spite of the fact that the rate of growth of GDP was much lower in the former phase
cent rate of growth of GDP in the second
Elementary
Secondary
Adult
Language & Development
University & Higher
Technical
General
Physical
95
phase. The second phase is, therefore, the phase of deceleration of public expenditure
of higher education. An important point to observe is the contribution of the centre
and the state in the financing of higher education.
The trend since 1950s provides an interesting picture. So long as education
was under state list till the 42nd amendment in 1976, the central government reduced
the share in the financing of public expenditure on higher education. Centre
contributed 37 percent in the total financing of higher education in 1965-66. However,
the rate of growth of private sector contribution to the GDP has increased from 2.45
percent during the period 1960-61 to 1980-81 and increased to 4.94 percent during the
period 1981-82 to 2002-03. The other reason is that the total expenditure as a
percentage of current expenditure declined from 117 percent in 1950-51 to a level of
61 percent in 2004-05. Secondly, the tax revenue as a percentage of current
government expenditure has declined from 102 percent to 45 percent during the same
year. Therefore, there is a fiscal constraint to public expenditure in general, and
particularly for higher education. Central government expenditure on education is one
of the major components of public expenditure on education in India.
3.6. Central Government Expenditure on Education in India
As per the analysis of budgeted expenditure on education, the share of centre
to the total public financing of higher education is 19 percent in 2003-04. It is noticed
that, there is a sharp decline in the CAGR on per capita Central Government
expenditure on education is inconsistent in India during the last six decades since
Independence. For instance, it was 11.9 percent during the period 1950-1951 to 1959-
1960 and decreased to 2.8 percent during the period 2000-2001 to 2007-08 (Table
3.7). The CAGR of central government expenditure on higher education is 17 percent
during the period 1951-52 to 1979-80. It declined to 10 percent during the period
96
1980-81 to 2003-04 (Table 3.8). However, the CAGR of GDP increased from 3.35 to
5.42 percent during the same period. On the contrary, the CAGR of public
expenditure on higher education has decreased from 15.2 percent during the period
1951-51 to 1979-80 and to 13.5 percent during the period 1980-81 to 2003-04. A
better measure is to use both the student enrolment and the higher education spending
related to the whole economy. The government expenditure on education particularly
higher education as a percentage of GDP is often used to measure the importance of
higher education (Agarwal, 2009).
Table-3.7
CAGR of Per capita Central Government Expenditure (`) on Education
in India (1999-2000 Prices)
Year CAGR
1950-1951 to 1959-1960 11.9
1960-1961 to 1969-1970 3.5
1970-1971 to 1979-1980 5.2
1979-1980 to 1989-1990 6.4
1989-1990 to 1999-2000 2.8
2000-2001 to 2007-2008 2.8
Note : CAGR: Compound Annual Growth Rate
Source: Computed from Analysis of Budgeted Expenditure on Education, Various Issues, MHRD, GOI
The central Government’s expenditure on higher education declined from
`646 crores in 1990-1991 to `559 crores in 1996-1997 while it increased to `1438.5
crores in 2000-2001 and decreased to `1005.08 crores in the year 2003-04. The other
aspect to be noted is that, the states accounted for a major share in the public
expenditure on education in India with 79.43 percent in 1990-1991 to 80.91 percent in
2003-04.
However, government expenditure on poor sections coupled with its proper
utilization may help the poor students. Centre’s declining share is one of the important
reasons for the deceleration in the public funding of education. Similarly, central
97
government’s role in higher education has also declined. The state governments have
limited resources in India compared to the central government. Therefore, central
government should increase its participation in depth and width especially in higher
education which will be a great relief to the state governments as well as the
households in India.
Table-3.8
CAGR of Central Government Expenditure (`) on Higher Education
in India (1999-2000 Prices)
Item 1951-1952 to 1979-1980
(CAGR)
1980-1981 to 2003-2004
(CAGR)
Total State and UT (1) 15.00 11.00
Central (Total) (2) 17.00 10.00
Grand (1+2) 15.20 13.50
GDP 3.35 5.42
Note: UT: Union Territories Source: Computed from the MHRD (1950-51 to 2005-06)
However, one of the major contributors to total expenditure on education in
the country is none other than households. Therefore, it is important to examine the
household expenditure on education in India.
3.7. Household Consumption Expenditure and Education in India
Generally, the share of non–food component in total household
expenditure will increase with the increase in household4 income. As education
belongs to the non–food category, the expenditure on education reveals the priority of
education as well as the income level of the households in India. The percentage share
of education on the total Private Final Consumption Expenditure on Education
(PFCE) was 0.60 percent in 1950-51 and increased to 2.55 percent in 2007-08. It is
clear that, there is a continuous increase in the allocation to education in the total
household consumption expenditure in India (Table 3.9). Even though, the share of
98
education in the total consumption expenditure is not at the satisfactory level, the
percentage share of expenditure on food steadily declined from 61.3 percent in 1950-
51 to 31.0 percent in the year 2007-08. However, this expenditure is not sufficient to
create a satisfactory stock of trained people in the country (James, 2008). The analysis
of trend in public expenditure on education shows that the process of liberalisation
and privatisation have resulted in inequality in education among the socio–economic
groups as a result of the decline in public expenditure on education in India.
Table-3.9
Average Annual Percentage Share of Education in Total Household
Consumption Expenditure (`) in India (1999-2000 Prices)
Year Percentage Share of
Education Year
Percentage Share of Education
1950-1951 0.60 2001-2002 2.08
1960-1961 0.82 2002-2003 2.22
1970-1971 1.41 2003-2004 2.30
1980-1981 1.46 2004-2005 2.39
1990-1991 1.66 2005-2006 2.47
1995-1996 1.59 2006-2007 2.53
2000-2001 2.01 2007-2008 2.55
Note. All Values are in Percentages Source. Based on CSO (2008 and 2009) (wwww.mospi.nic.in), Government of India, Various Issues
In the era of liberalisation, privatisation and globalisation, several reforms are
being proposed in the financing of education. Such reforms are necessary due to the
dwindling resource base relating to public expenditure on education in India.
Generally, the PFCE is higher than the change in GDP. However, absolute amount of
PFCE is lower than the GDP of India. The PFCE showed an increasing positive trend
except for the periods 2002-03 and 2007-08. But, PFCE increased from 3.34 percent
in 2001-02 to 6.98 percent in 2007-08. The per capita expenditure on education was a
mere `34.54 in 1950-51 which jumped to `437.02 in 2007-08. There is a remarkable
99
change in the household expenditure on education in India (Appendix-2.6). Though
the total government expenditure is high compared to many other countries in the
world, the level of expenditure on higher education in India is not particularly high. It
appears that India should allocate a higher proportion than the national average to the
cause of higher education. A trend noticed from the nineties is the proliferation of
unaided schools and the growth of self–financing courses and institutions in the
higher education and technical education sector in particular. These changes in
educational scene may lead to an increase in the household expenditure on education5
in India (Tilak, 1993).
3.8. Household Expenditure on Education in India
3.8.1. Trend of Household Expenditure on Total Education in India
The cost incurred by private households on education and training could be
classified into three types. These are direct, indirect and opportunity costs. Direct
costs are outlays by public authorities for building and operating expenses for schools
(capital and current expenditure), tuition charges paid by students, and fees paid by
employers to training providers. Indirect costs are expenses that are not a part of the
direct learning process. They include living costs incurred by a higher education
student, and allowances or other subsidies provided by public authorities in order to
alleviate living costs by students and transportation costs. Opportunity costs are those
reflected in the value of work or leisure that is foregone in order to devote time for
learning. Examples are earnings foregone by students when they delay entry to or
withdraw from the labour force to participate in higher education, foregone
production by employers when workers attend training, and leisure time foregone for
those attending adult education at night courses. Per capita household expenditure on
education was `34.54 in 1950-51 which increased to `437.02 in 2007-08 (Tables
100
3.10(a) and 3.10(b)). The per capita expenditure on education shows a continuous
upward trend during the period 1950-51 to 1969-70. But, thereafter it started to
decline during the period 1970-71 to 1979-80. The percentage change is negative
during the years 1973-74 (-1.51 percent), 1976-77 (-0.91 percent), 1977-78 (-1.82
percent) and 1978-79 (-0.22 percent) during the period 1970-71 to 1979-80.
Table-3.10 (a)
Average Annual Per capita Private Household Final Consumption Expenditure
(`) on Education in India (1999-2000 Prices)
Year (`) Per capita
Percentage Change
Year (`)
Per capita
Percentage Change
Year (`)
Per capita
Percentage Change
1950-51 34.54 0.00 1960-61 57.37 0.00 1970-71 105.47 0.00
1951-52 36.44 5.50 1961-62 61.53 7.25 1971-72 107.98 2.38
1952-53 37.8 3.73 1962-63 68.55 11.41 1972-73 110.53 2.36
1953-54 39.87 5.48 1963-64 73.43 7.12 1973-74 108.86 -1.51
1954-55 42.23 5.92 1964-65 77.09 4.98 1974-75 117.07 7.54
1955-56 44.73 5.92 1965-66 82.49 7.00 1975-76 117.08 0.01
1956-57 46.56 4.09 1966-67 86.97 5.43 1976-77 116.02 -0.91
1957-58 48.34 3.82 1967-68 91.09 4.74 1977-78 113.91 -1.82
1958-59 51.03 5.56 1968-69 99.25 8.96 1978-79 113.66 -0.22
1959-60 53.99 5.80 1969-70 104.8 5.59 1979-80 120.78 6.26
CAGR 5.00 CAGR 6.70 CAGR 1.20
Note: CAGR: Compound Annual Growth Rate Source. Based on CSO (2008 and 2009) (wwww.mospi.nic.in), Government of India
The decreasing trend continued in the period from 1980-81 to 1989-90. Per
capita household expenditure on education started to increase from the year 1995-96
in India. However, in absolute terms, it shows a positive growth in almost all years in
India over the period 1950-51 to 2007-08. There is a marked increase in the
household expenditure on education in India. It is clear that, the per capita
expenditure on education increased several folds during the period 1987-88 to 2007-
08. The CAGR of per capita household expenditure has fluctuated between 7.90
101
percent (2000-01 to 2007-08) and 1.20 percent (1970-71 to 1979-80). The percentage
change in per capita household expenditure on education varies from 19.12 percent
(1986-87) to -9.27 percent (1985-86) over the period 1950-51 to 2007-08. It is evident
that, the percentage change in the per capita expenditure on education has fluctuated
during the period 1987-88 to 2007-08.
Table-3.10 (b)
Average Annual Per capita Private Household Final Consumption
Expenditure (`) on Education in India (1999-2000 Prices)
Year (`)
Per capita Percentage Change
Year (`)
Per capita Percentage
Change Year
(`) Per capita
Percentage Change
1980-81 120.71 0.00 1990-91 166.58 0.00 2000-01 257.02 0.00
1981-82 117.01 -3.07 1991-92 163.27 -1.99 2001-02 275.31 7.12
1982-83 116.51 -0.43 1992-93 161.36 -1.17 2002-03 297.33 8.00
1983-84 113.56 -2.53 1993-94 165.03 2.27 2003-04 322.03 8.31
1984-85 112.73 -0.73 1994-95 164.21 -0.50 2004-05 348.38 8.18
1985-86 102.28 -9.27 1995-96 174.49 6.26 2005-06 378.13 8.54
1986-87 121.84 19.12 1996-97 185.34 6.22 2006-07 406.49 7.50
1987-88 130.96 7.49 1997-98 204.67 10.43 2007-08 437.02 7.51
1988-89 136.36 4.12 1998-99 216.72 5.89
1989-90 150.58 10.43 1999-00 237.57 9.62
CAGR 2.10 CAGR 4.00 CAGR 7.90
Source. Based on CSO (2008 and 2009), (wwww.mospi.nic.in), Government of India
The fluctuations in the household expenditure on education is due to
endogenous and exogenous factors like fluctuation in income, changes in total
consumption expenditure, expectation of higher returns from education and the
changes in the relative priorities of the households in India. Two phases of
expenditure on education are be visible, viz., period from 1953-54 to 1986-87 and
from 1986-87 to 2004-05. It is clear that the increase in expenditure was 100 percent
during the period 1950-51 to 1986-87. But, the change during the period 1986-87 to
102
2007-08 was 221.78 percent which is high compared to the growth of previous
decades in the country. Therefore, economic reforms have increased the rate of
growth of household expenditure on education in India. There is a difference of
CAGR between both in `crores and `per capita household expenditure on education
during the period 1950-1951 to 1959-60 and 2000-2001 to 2007-2008 (Table 3.11).
The CAGR of per capita household expenditure on education is 5 percent
(1950-1951 to 1959-1960) followed by 6.7 percent (1960-1961 to 1969-1970), 1.2
percent (1970-1971 to 1979-1980), 2.1 percent (1979-1980 to 1989-1990), 4.0 percent
(1989-1990 to 1999-2000) and 7.9 percent (2000-2001 to 2007-2008) over the period
1950-51 to 2007-08 in India. However, the CAGR of household expenditure on
education (in terms of `crores) is 6.9 percent, 8.9 percent, 3.3 percent, 4.5 percent, 6.2
percent and 9.6 percent respectively during the same period. The CAGR of per capita
expenditure is less than the growth in terms of `crores in India. It is noticed that,
household expenditure on education is 1.06 percent for the period 1987-88, which
increased to 1.74 percent of GDP in 2007-08. However, household expenditure on
education as a percent of personal disposable income was 3.54 for the year 1987-88
Table-3.11
CAGR of Private Household Final Consumption Expenditure
(`) on Education in India (1999-2000 Prices)
Year Expenditure on Education
(Crore) (CAGR) (1) Expenditure on Education (Per capita) (CAGR) (2)
Difference (1-2)
1950-1951 to 1959-1960 6.9 5.0 1.9
1960-1961 to 1969-1970 8.9 6.7 2.2
1970-1971 to 1979-1980 3.3 1.2 2.1
1979-1980 to 1989-1990 4.5 2.1 2.4
1989-1990 to 1999-2000 6.2 4.0 2.2
2000-2001 to 2007-2008 9.6 7.9 1.7
Note: CAGR :Compound Annual Growth Rate
Source: Computed from CSO, Various Years, GOI
103
and declined to 1.98 in 2007-08. But, there is an increasing trend as a percent of per
capita income. It was 1.18 percent in 1987-88 which increased to 1.91 percent in
2007-08. It is the highest (1.74 percent) contributor to household expenditure to GDP
in 2007-08 and the lowest (1.03 percent) in the year 1988-89. It is clear that, the
household expenditure on education in India is sizeable. The expenditure on education
shows an increasing trend in terms of GDP and per capita income of India (Tilak,
2002; Agarwal, 2009).
Knowledge of total contribution to expenditure on education by households, its
percentage change and CAGR are important to find the real magnitude and the
variations of household expenditure on education in India. The expenditure on
education shows a steady increase in India. Among the exogenous factors,
government expenditure on education and the level of inflation are the main factors in
determining the household expenditure on education in India. This may be the result
of the willingness to pay for education or the compulsion on households as a result of
the inadequacy of government expenditure on education in India (Tilak, 2002). The
CAGR of household expenditure on education (in crores) varies from 9.6 percent to
3.3 percent during the periods 2000-2001 to 2007-2008 and 1970-1971 to 1979-1980
respectively. The public expenditure increases the educational facilities and the
household expenditure may enable its utilization. These two types of expenditure are
so inter–related and inter–dependent that in the absence of any of them, there is likely
to be under allocation of resources for education (Panchmukhi, 1989). Thus,
expenditure incurred by a household on education depends on various socio–
economic and demographic factors with in a region. Expenditure on education varies
depending on the socio–economic background of each region (Tilak, 2002).
Household investment in education is influenced by a wide variety of factors. The
104
level of inequality in household expenditure on education is visible in the growth
differences of two measures of household expenditure on education. It is noted that,
per capita government expenditure on education and per capita household expenditure
on education has increased in India. The level of investment at the household level
has always been underestimated since the perception among the masses is that
education is cheap and free in the context of free and compulsory education at the
lower strata. Household expenditure on education has noticeably increased during the
last six decades in India. For example, when the growth rate of household expenditure
is low it is compensated by growth rate in government expenditure on education.
3.8.1.1. Government and Household Expenditure on Education in India
The CAGR of per capita government (central) expenditure on education varies
from 11.9 percent from 1950-1951 to 1959-1960 and it declined to 2.8 percent from
2000-2001 to 2007-2008 (Table 3.12). Therefore, it is clear that the household
expenditure on education has increased in India during the same period. On the
contrary, government expenditure on education has substantially declined in India.
The CAGR of total expenditure on education (government plus household) varies
from 16.9 percent (1950-1951 to 1959-1960) to 6.4 percent (1970-1971 to 1979-1980)
and again increased to 10.7 percent (2000-2001 to 2007-2008) during the period
1950-1951 to 1959-1960 and 2000-2001 to 2007-2008. Thus, after a steady decline
from 1960-1961 to 1969-1970 and 1989-1990 to 1999-2000, growth rate increased to
10.7 percent during the period 2000-2001 to 2007-2008. The CAGR of per capita
household expenditure on education has consistently increased as a result of reforms
in the country. Thus we can infer that, it started to increase with the privatization
programmes in the economy. Therefore, it is clear that the household expenditure on
education has increased after the introduction of structural adjustment programme in
105
India. According to the National Sample Survey Organization (NSSO) data, the
government’s share in overall expenditure on education was declining steadily, from
80 percent in 1983-84 to 67 percent in 1999-2000. For the states like Kerala, the
decline is steep, from 75 to 48 percent, while for Madhya Pradesh it is from 84
percent to 68 percent during the same year.
Table-3.12
CAGR of Household and Government Expenditure (`) on Education
in India (1999-2000 Prices)
Year Per capita Household
Expenditure on Education (CAGR) (1)
Per capita Government Expenditure on Education
(CAGR) (2)
Total (1+2)
1950-1951 to 1959-1960 5.0 11.9 16.9
1960-1961 to 1969-1970 6.7 3.5 10.2
1970-1971 to 1979-1980 1.2 5.2 6.4
1979-1980 to 1989-1990 2.1 6.4 8.5
1989-1990 to 1999-2000 4.0 2.8 6.8
2000-2001 to 2007-2008 7.9 2.8 10.7
Note: CAGR: Compound Annual Growth Rate
Source. Computed from the Analysis Budgeted Expenditure on Education in India, Various Years, MHRD,GOI
Private household expenditure on education rose 10.8 percent between 1988-
1989 and 2004-2005, which for the poor rose even faster, i.e., by 12.4 times. In the
case of engineering colleges, the private sector, which accounted for just 15 percent of
the seats in 1960-1961, accounted for 86.4 percent of seats and 84 percent of the total
engineering colleges by 2003-2004. The movement of students to private suppliers of
higher education is a phenomenon not limited to India’s borders. While the numbers
are lower, the overseas purchase of higher education has much greater financial
implications. It is around $1.6 billion in 2005-06, more than tenfold of the amount in
2000-01 ($95 million). From the Figure 3.3, it is clear that the household expenditure
106
on education has noticeably increased from the period of economic reforms. Beside
this, government expenditure on education has may decreased to some extent. Thus,
poor students will suffer from this shift in the structure of educational financing in
India.
Figure–3.3 Trend of Central Government and Household Expenditure (`̀̀̀) on Education
in India
Sources: 1. Analysis of Budgeted Expenditure on Education in India,Various Issues, GOI
2. See Tables 3.10 (a) and 3.10 (b).
As per the RBI report 2010, the total flow of money to foreign educational
institutions is about $3.0 billion, a staggering amount for a poor country whose own
educational institutions are starving for resources. Economic reforms may act as a
catalyst for change in the Indian educational system. But, it should act as measure to
increase the welfare of the country. Therefore, state must formulate the necessary
measures to reduce the educational inequality in the economy (Sen, 1999). State must
formulate appropriate policies to monitor private educational institutions and thereby
0
200
400
600
800
1000
1200
19
61-6
21
96
2-6
31
96
3-6
41
96
4-6
51
96
5-6
61
96
6-6
71
96
7-6
81
96
8-6
91
96
9-7
01
97
0-7
11
97
1-7
21
97
2-7
31
97
3-7
41
97
4-7
51
97
5-7
61
97
6-7
71
97
7-7
81
97
8-7
91
97
9-8
01
98
0-8
11
98
1-8
21
98
2-8
31
98
3-8
41
98
4-8
51
98
5-8
61
98
6-8
71
98
7-8
81
98
8-8
91
98
9-9
01
99
0-9
11
99
1-9
21
99
2-9
31
99
3-9
41
99
4-9
51
99
5-9
61
99
6-9
71
99
7-9
81
99
8-9
91
99
9-2
00
02
00
0-0
12
00
1-0
22
00
2-0
32
00
3-0
42
00
4-0
52
00
5-0
62
00
6-0
72
00
7-0
8
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Year Household
Central Government
107
improve the educational as well as distributional effects to a large extent. Moreover,
institutions have to follow an international standard to produce quantity as well as
quality results in the country. Analysis of per–student expenditure is crucial to study
the level of expenditure on education by the households in India.
3.8.2. Per–Student Household Expenditure on Education
3.8.2.1. Fractile Groups and Expenditure on Education
It is important to examine the household expenditure on education on a student6
in India. Per–student household expenditure on education is available in terms of
quintile group of Per capita Consumption Expenditure on Education (PCE)7 in India.
The expenditure categories can be divided into five quintile groups of PCE such as 0-
20, 20-40, 40-60, 60-80, 80-100 and the average of all these categories. Household
expenditure on various levels8 of general education can give a picture about the
priority and level of cost incurred by households. The household expenditure on
general education in India based on the PCE fractile groups is presented in Table 3.13.
Percentage change of the per–student expenditure in secondary/higher
secondary level of education is the highest (250.52 percent) in the 80-100 fractile
group and the lowest (127.37 percent) in the 20-40 fractile group in the rural+urban
category during the period 1995-96 to 2007-08. However, the percentage change is
the highest (184.92 percent) for the 40-60 groups, while the lowest (144.21 percent)
for the 80-100 group in the above–higher secondary (general) education category
during the same period. There is a positive relationship between the size of fractile
group and actual household expenditure on education during the period 1995-96 to
2007-08. For instance, the average expenditure on general education (all levels of
education) is `717 in 0-20 fractile group and it is `6992 in 80-100 group which is
around 3 fold times high when compared to the average expenditure of all fractile
108
group (`2461) with respect to general (all) education (average of the all levels of
general education–hereafter general (all)), in the year 2007-08. The expenditure for
above–higher secondary level of general education is `3756 (0-20 fractile group) and
`9021 (80-100 fractile group) for the year 2007-08.
Table-3.13
Average Annual Per–Student Household Expenditure (`) on General
Education by Fractile Group in India (Rural + Urban)
Level of Education
Fractile Group
0-20 20-40 40-60 60-80 80-100 All
1995-96
2007-08
1995-96
2007-08
1995-96
2007-08
1995-96
2007-08
1995-96
2007-08
1995-96
2007-08
Secondary/Higher
Secondary 768 1841 961 2185 1096 2656 1424 3607 2322 8139 1577 4351
Percentage Change
139.71 127.37 142.34 153.30 250.52 175.90
Above–Higher
Secondary (General)
1353 3756 1645 4514 1810 5157 2220 6081 3694 9021 2923 7360
Percentage Change
177.61 174.41 184.92 173.92 144.21 151.80
General (all)*
300 717 472 1031 647 1488 923 2537 1836 6992 904 2461
Percentage Change
139.00 118.43 129.98 174.86 280.83 172.23
Notes: 1. Household Expenditure on Education also Referred to as Private Expenditure on Education
2. Age Limit of Students is 5-24 (NSSO Report No.439) and 5-29 (NSSO No.532 ) 3.:*:General (All) or general (all) is the Average of all Levels of General Education Source: Computed from NSS 52nd Round, Report No.439 (for 1995-96) and NSS 64th Round, Report No.532 (for 2007-08)
It is clear that, there is a widespread disparity in household expenditure on
education among the different fractile groups in India. Generally, the level of
expenditure will be high with the increase in the quality of general education. The
expenditure on education may be influenced by the supply of educational institutions
in a country. Nature9 and type10 of institutions may be the major determinants of
household expenditure on education in India.
109
3.8.2.2. Institution–Wise Expenditure on Education
Generally, educational institutions can be classified based on two factors such
as nature and ownership. The households send their children to various types of
education11 in order to fulfill their educational needs. It can be grouped into private
unaided, private aided, government and local body institutions in India. Percentage
change of per–student household expenditure with respect to the secondary/higher
secondary level of education is the highest (191.77 percent) in private–unaided
institutions and the lowest (67.38 percent) in local body institutions during the period
1995-96 to 2007-08 (Table 3.14). Percentage change is the highest (145.92 percent) in
government institutions and the lowest (117.18 percent) in local body institutions with
respect to the above–higher secondary level of general education during the same
period. But, absolute expenditure is `6293 in government institutions while it is
`11575 in private unaided institution for above–higher secondary level of general
education in the year 2007-08.
Therefore, the type and level of education, type of institution, percentage
change and the actual amount of expenditure are relevant factors in the direction of
household expenditure on education in India. In the case of technical education, the
level of expenditure is the highest (`38675) in private unaided institutions and the
lowest (`19989) in government institutions in the year 2007-08. Generally, rich
income groups send their children to private–unaided institutions, while poor people
prefer the government institutions. The difference between a public and private
institution is usually seen along two dimensions: ownership and the pattern of
financing. Initially, private institutions were confined to the school sector up to the
1980s. After the 1980s, private schools had increased their presence and continued to
grow steadily and by 2004, one third of all institutions for class 10 and class 12 were
110
in the private sector in India (Agarwal, 2009). The private institutions in the higher
education sector are a post 1980s phenomenon. Until recently, all universities were
public universities, but the colleges were allowed to be established on self–financing
basis after the 1980s.
Table-3.14
Average Annual Per–Student Household Expenditure (`) on Education
by Type of Institution in India (Rural+Urban)
Level/ Type of
Education
Type of Institution
Government Local–Body Private–Aided Private–Unaided
All
1995-96
2007-08
1995-96
2007-08
1995-96
2007-08
1995-96
2007-08
1995-96
2007-08
Secondary/ Higher
Secondary 1236 2745 1349 2258 1861 4911 3061 8931 1577 4351
Percentage Change
122.09 67.38 163.89 191.77 175.90
Above–
Higher Secondary (General)
2559 6293 2415 5245 3143 7387 5296 11575 2923 7360
Percentage Change
145.92 117.18 135.03 118.56 151.80
General (all)
580 1267 628 949 1615 4220 1904 5689 904 2461
Percentage Change
118.45 51.11 161.30 198.79 172.23
Technical Education
- 19989 - - - 34282 - 38675 - 32112
Vocational Education
- 8089 - - - 14082 - 20063 - 14881
Note: -:Not Available Source: Computed from NSS 52nd Round, Report No.439 (for 1995-96) and NSS 64th Round, Report No.532 (for 2007-08)
There is an increasing trend towards privatisation in Indian higher education.
The share of private unaided institutions increased from 42.6 percent in 2001 to 63.21
percent in 2006. According to the estimates of planning commission in 2007, the
share of the private unaided enrolments also increased from 32.89 percent to 51.53
percent in the same period. Household expenditure on education in India has also
increased during the period 1995-96 to 2007-08. It is clear that, the level of
111
expenditure in general and percentage change in some cases are high in the private
unaided institutions. The private aided institutions are partly funded by government.
Large number of private unaided institutions meets most of their expenses from
tuition revenue. A significant number of them are family–owned and run as business
enterprises. It is clear that the absolute amount of expenditure is low in government
institutions compared to private aided and private unaided institutions.
3.8.2.3. Gender–Wise Expenditure on Education
Household expenditure on education based on the sex of the student can be seen
from the Table 3.15. It can be observed that, considering the secondary/higher
secondary education, the per–student expenditure on female student (`1619) is higher
than that of the male student (`1552) for the year 1995-96. The expenditure on female
student (`4140) is less than that of the male student (`4503) in the same level of
education for the period 2007-08. The pattern continues in the above–higher
secondary level of general education also where the female student (`2995)
expenditure is higher than that of the male student (`2879) in 1995-96 while male
expenditure is higher in the same level of education in the year 2007-08. However,
percentage change is the highest (190.14 percent) for the male student compared to
female student (155.71 percent) with respect to the secondary/higher secondary
education in India over the period 1995-96 to 2007-08. This pattern continues in the
secondary/higher secondary (general), above–higher secondary (general) and general
education as a whole, where the percentage change of male student is higher than
female student in India. But, expenditure on female student (`17705) in vocational
education is higher than that of the male student (`13480) in India in the year 2007-
08. It is visible that there is gender bias in favour of the male student in general
education (all) in India in the year 2007-08. But, expenditure of female student is
112
higher than that of the male student on vocational education with a margin of `4225
for the year 2007-08. It shows that the gender–disparity is comparatively low at
higher levels of education. However, the level of participation with respect to females
is low compared to males in India.
Table-3.15
Average Annual Per–Student Household Expenditure (`) on Education
by the Sex of the Student in India (Rural + Urban)
Level/ Type of
Education
Sex of the Student
Female Male Total (Person)
1995-96 2007-08 1995-96 2007-08 1995-96 2007-08
Secondary/ Higher
Secondary 1619 4140 1552 4503 1577 4351
Percentage Change
155.71 190.14 175.90
Above–Higher
Secondary (General)
2995 7324 2879 7386 2923 7360
Percentage Change
144.54 156.55 151.80
General (all)
882 2293 919 2595 904 2461
Percentage Change
159.98 182.37 172.23
Technical Education
- 31111 - 32695 - 32112
Vocational Education
- 17705 - 13480 - 14881
Source: Computed from NSS 52nd Round, Report No.439 (for 1995-96) and NSS 64th Round, Report No.532 (for 2007-08)
It is important to increase the household expenditure on education for the
female students in India. But, there is wide disparity among the major states in India
with respect to the level and nature of household expenditure on education. Analysis
of inter–state disparity can give a broad picture on the level and degree of disparity
among the major states in India compared to all–India average of household
expenditure on education.
113
3.8.2.4. Inter–State Disparity in Expenditure on Education
The previous section discussed the average annual per–student household
expenditure on education based on fractile group, type of institution and the sex of the
student in India. There is huge disparity in terms of economic development among the
major states in India. In relative terms, some states are economically advanced and
some others are backward. Even within the same state, some regions or areas are more
developed while some others are less advanced and almost primitive in certain
respects. The co–existence of relatively developed and economically depressed states
and even in different regions within each state is known as regional imbalance or
inequality. Regional variations in per capita consumption have increased in post–
reform period as compared to pre–reform period both in rural and urban areas in
India. The inter–state comparison is helpful to understand the level of regional
disparity with respect to household expenditure on education in India.
The expenditure on education and the Human Development Index (HDI) may
have a bi–directional relationship among the major states in India. High HDI may
help some of the states to increase the expenditure on education. Similarly, low HDI
may accompany a high expenditure on education among the major states in India. The
household expenditure on education of the selected major states in India can be seen
from the Table 3.16. The per–student expenditure on secondary/higher secondary
education is the highest in Punjab with `7233 and the lowest in Arunachal Pradesh
with `2866 for the year 2007-08. Percentage change is the highest (297.49 percent) in
Assam and the lowest (91.32 percent) in Arunachal Pradesh for secondary/higher
secondary education in India during the period 1995-96 to 2007-08. Punjab is the
highest spender on general education in India and it is one of the richest states in
India. The income position of states will reflect in expenditure on education of the
114
households and it positively affects the future income. The highest spender in above–
higher secondary level of general education is Punjab with `13008 and the lowest is
`4665 in Bihar for the year 2007-08.
Table-3.16
Average Annual Per–Student Household Expenditure (`) by Level of General
Education of Major States in India (Rural + Urban)
States
Secondary/ Higher
Secondary Percentage
Change
Above–Higher Secondary Percentage
Change
General (all)* Percentage
Change 1995-
96 2007-
08 1995-
96 2007-
08 1995-
96 2007-
08
A.P 1541 4194 172.16 3081 7973 158.78 825 2780 236.97
A.R 1498 2866 91.32 1455 6867 371.96 821 2059 150.79
Assam 998 3967 297.49 2261 7617 236.89 594 1920 223.23
Bihar 1153 3574 209.97 2327 4665 100.47 631 1209 91.60
Gujarat 1498 5491 266.56 2352 7398 214.54 815 2695 230.67
Haryana 2391 6982 192.01 3409 8587 151.89 1395 4877 249.61
H.P 1777 5423 205.18 2966 7281 145.48 1058 3861 264.93
K.R 1130 3720 229.20 2886 9604 232.78 686 2333 240.09
Kerala 1259 4300 241.54 3102 6630 113.73 1066 3629 240.43
M.P 1274 3435 169.62 2000 7031 251.55 592 1599 170.10
M.R 1483 4157 180.31 3518 6813 93.66 996 2883 189.46
Orissa 1233 3561 188.81 2150 6176 187.26 657 1652 151.45
Punjab 3241 7233 123.17 4307 13008 202.02 1853 5389 190.83
R. N 1400 4596 228.29 2016 8002 296.92 778 2572 230.59
T.N 1502 3615 140.68 3465 9617 177.55 872 2907 233.37
U.P 1535 3453 124.95 2407 5567 131.28 808 1846 128.47
W.B 2653 6283 136.83 3914 9348 138.83 1056 2840 168.94
All-India 1577 4351 175.90 2923 7360 151.80 904 2461 172.23 Notes: 1. A.P: Andhra Pradesh, A .R:Arunachal Pradesh, H.P: Himachal Pradesh,: K. R Karnataka, M.P: Madhya Pradesh, M.R: Maharashtra, T.N: Tamil Nadu, U.P: Uttar Pradesh, R. N:Rajastan and W.B: West Bengal 2. *: General (All) or general (all) is the Average of the all Levels of General Education. Source: Computed from NSS 52nd Round, Report No.439 (for 1995-96) and NSS 64th Round, Report No.532 (for 2007-08)
The percentage change is the highest (371.96 percent) for Arunachal Pradesh
and the lowest (93.66 percent) for Maharashtra with respect to the above–higher
115
secondary education (general) during the period 1995-96 to 2007-08. It is clear that,
expenditure on general education is the highest in Punjab during the period 1995-96
to 2007-08 (Figure 3.4). The results indicated that, there is widespread disparity
among the major states of India when compared to all–India expenditure on education
during the same period.
Figure-3.4
Average Annual Per–Student Household Expenditure (`) on General
Education (all) of Major States in India (1995-96 and 2007-08)
Source: Computed from NSS 52nd Round, Report No.439 (for 1995-96) and NSS 64th Round, Report No.532 (for 2007-08)
But, the states like Punjab, Gujarat, Haryana, Himachal Pradesh, Kerala and
Andhra Pradesh have high levels of household expenditure on general education
compared to other major states in India. The educationally and/or economically
advanced states have high level of household expenditure on general education
compared to the other states in India. However, it is clear that when the ladder of
education increases, the disparity decreases in the household expenditure on general
education. There is large disparity on household expenditure on general education
(all) among the major states in India during the period 1995-96 to 2007-08. It is
0
1000
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Major States in India
General (All) 1995-96
General (All) 2007-08
116
important to compare the general, technical/professional and vocational per–student
household expenditure on education among the major states in India. The level of
development of technical/professional and vocational education may be different from
one state to another. Generally, major determinants of total household expenditure on
education are household income, caste, gender of the student, education status of the
household, public expenditure on education and availability of institutions (Tilak,
2002).
The changing structure of the Indian economy saw a need for the development
of more professional programmes and may leading to the rise in financially
independent private professional colleges. The rise of professional higher education in
India follows the pattern seen elsewhere in the world with a shift from liberal
education towards professional programmes. So, this trend may reflect in India also.
But, it may not be uniform in various states in India (Agarwal, 2009). The expenditure
on general (all), technical/professional and vocational education in the major states of
India can be seen from the Table 3.17. The household expenditure on general (all)
education is the highest (`5389) in Punjab and the lowest (`1209) in Bihar for the
year 2007-08. The difference between the expenditure of the lowest and highest
spender is `4180, which is far distant from the all–India average expenditure of `2460
for general education (all) in the year 2007-08. Punjab’s expenditure on general
education (all) is 4.46 times high when compared to Bihar’s expenditure during the
same year. Moreover, the highest expenditure is in Punjab (`1853) and the lowest in
Madhya Pradesh (`592) for the same type of education for the year 1995-96. In other
words, the expenditure is 3.13 fold times high in Punjab compared to Madya Pradesh
during the same year. These numbers in terms of expenditure indicate that there is a
clear disparity in both the periods among the major states in India. Besides this, the
117
extent of disparity increased during the period 1995-96 to 2007-08. Percentage change
of general education (all) is the highest (264.93 percent) in Himachal Pradesh and the
lowest (91.60 percent) in Bihar during the period 1995-96 to 2007-08.
Table-3.17
Average Annual Per–Student Household Expenditure (`) on Types
of Education of Major States in India (Rural +Urban)
States General (all)* Percentage
change
Technical/ Professional
Vocational
1995-96 2007-08 2007-08 2007-08
A.P 825 2780 236.97 29739 8384
A.R 821 2059 150.79 6292 -
Assam 594 1920 223.23 11286 11238
Bihar 631 1209 91.60 39297 -
Gujarat 815 2695 230.67 18256 8430
Haryana 1395 4877 249.61 31066 24212
H.P 1058 3861 264.93 22186 11485
Karnataka 686 2333 240.09 34201 16265
Kerala 1066 3627 240.24 25447 12259
M.P 592 1599 170.10 27114 5055
M.R 996 2883 189.46 36392 13990
Orissa 657 1645 150.38 37772 6750
Punjab 1853 5389 190.83 49032 13922
Rajasthan 778 2572 230.59 29840 11715
T.N 872 2907 233.37 34024 17759
U.P 808 1846 128.47 24936 19059
W.B 1056 2840 168.94 31298 9516
All-India 904 2460 172.12 32111 14881
Note:*: Average of all Levels of General Education Source: Computed from NSS 52nd Round, Report No.439 (for 1995-96) and NSS 64th Round, Report No.532 (for 2007-08)
It is evident that, the household expenditure on education has a crucial role in
the educational outcomes of the states. As per NSSO 2010 estimates, Bihar is one of
the poor performers in the educational achievements especially in literacy.
118
Expenditure on general education (all) has shown a widespread disparity among the
major states compared to the all–India average expenditure for both the periods.
However, the level and nature of expenditure has shown a different scenario in
technical/professional education compared to general education (all) in India.
Generally, only a small part of the relevant age group is participating in the
technical/professional education in India. Household expenditure on
technical/professional on education is the highest (`49032) in Punjab and the lowest
in Arunachal Pradesh (`6292) for the year 2007-08. The level of disparity is high
compared to the all–India average (`32111) for the same period. But the states like
Punjab (`49032), Bihar (`39297), Orissa (`37772), Maharashtra (`36392) and
Karnataka (`34201) have a high level of household expenditure on
technical/professional education compared to the other states in the year 2007-08. The
note worthy aspect is that, Bihar’s household expenditure on general education (all) is
low compared to major states in India in the year 2007-08.
However, Bihar has second position in per–student technical/professional
education in India during the year 2007-08. The range of vocational education varies
from `24212 in Haryana to `5055 in Madhya Pradesh when compared to `14881 of
all–India average for the year 2007-08. The ratio of technical to general education,
vocational to general education and technical to vocational education may give a
picture about the extent of disparity among the various types of expenditure on
education among the various states in India. It is visible that the ratio of
technical/professional to general education (all) is the highest (32.50 fold) in Bihar
and the lowest (3.06 fold) in Arunachal Pradesh in 2007-08. Generally, the
participation is high in the general education (all) when compared to
technical/professional and vocational education. However, the expenditure on general
119
education is comparatively low in India. This disparity is intensified with various
types of education especially the states like Bihar and Madhya Pradesh for the year
2007-08. From the discussion, it is clear that the expenditure on education has
substantially increased in India. It is important to increase the public expenditure on
education in India. Besides this, it is found that household expenditure on education
has been noticeably increased in India. Structural adjustment programmes have a
remarkable role in it. Per–student expenditure has showed a disparity in terms of
fractile groups, type of institutions and sex of the student during the period 1995-96 to
2007-08. Moreover, there is a widespread disparity in per–student household
expenditure on general education among the major states in India during the period
1995-96 to 2007-08.
End Notes
1. Public expenditure on education is the sum of total of expenditure on education by the centre and states in India
2. Social services expenditure includes expenditure on education, medical and public health, family welfare, water supply and sanitation, welfare of scheduled castes (SC, ST), Scheduled Tribes (STs) and other Backwards (OBCs), labour and labour welfare, social security, nutrition, and relief for natural calamities
3. General Government Expenditure is the combined central and state government’s expenditure
4. Household is a group of persons, who normally live together, taking food from a common kitchen. It includes temporary stay–away (those whose total period of absence from the household is accepted to be less than 6 months) but excludes temporary visitors and guests (expected total period of stay less than 6 months).
5. Household expenditure on education refers to the sum total of all the expenses incurred by the student on education (towards fees, books and stationery, uniform, transport, private coaching, and study tours). It includes all the expenditure incurred and/or to be incurred during the current academic year or session on the education of the household members, aged 5-24(1995-96), 5-29 years (2007-08) who are currently attending at primary level and above.
6. A person is student if he/she is in the age-group of, 5-24 (as per definition of NSSO 52 nd
Round, Report no 439, 1995-96) or in the age group of 5-29 (as per definition of NSSO 64th
Round, Report no 532, 2007-08), who is currently attending formal education at primary level or above.
7. Quintile Class of PCE is five. The first quintile of PCE means the level of PCE below which 20% of the population lie; the second quintile, is level below which 40% of the population lie, and so on.
8. ‘Educational Level’ refers to the stage of educational attainment. It is the highest level a person has passed (not just completed). The levels include, not literate, literate without any
120
schooling, literate without formal schooling, literate with formal schooling, below primary, primary upper primary/middle, secondary, higher secondary, diploma/certificate course, graduate, post–graduate and above.
9. Nature of institution refers to whether the institution is recognized or not. A recognized school/institution is one in which the course(s) of study followed is/ are prescribed or recognized by the government or a university or a board constituted by law or by any other agency authorized on its behalf by the central or state governments.
10. Type of institution refers to the type of management by which the institution is run. It may be run by government or a local body or a private body either receiving or not receiving the government aid. Types of Institutions are (a) government, (b) local body (c) private aided and (d) private unaided.
11. Types of education are broadly divided into three categories: (i) general education, (ii) technical and professional education and (iii) vocational education. General education includes general school education from the primary to the higher secondary level, normal university education for a degree, while technical/ professional courses mean the hands–on training in addition to theoretical classes. The education which aims at imparting training in recognized institutions in specific fields though providing significant ‘hands–on’ experience is included under vocational education