The Hindu Business Line : Education, the key to inclusive growth

The Eleventh Plan Approach Paper spelt out that a key element of the strategy for inclusive growth must be “to provide the mass of our people access to basic facilities such as health, education, clean drinking water etc that they need. …Governments at different levels have to ensure the provision of these services and this must be an essential part of our strategy for inclusive growth.”

‘Lagging behind’

In this context, it may be recalled that the National Human Development Report (2002) indicated that ranked by the Human Development Index, Andhra Pradesh was eighth in 1981, ninth in 1991 and tenth in 2001. Studies show that Andhra Pradesh lags behind in ‘human development’ indicators particularly literacy, and infant mortality compared to other southern States. J. B. Tilak highlighted the poor performance of Andhra Pradesh and the better performance in Rajasthan in the education sector and concluded that if the trends continue in both the States, Rajasthan can come out of the infamous BiMaRU club and Andhra Pradesh may take its place.

This situation in Andhra Pradesh persists despite the measures taken by the State Government, in consonance with Central policies. Budget documents reveal the priorities of the government, and they are also an important source of information on the expenditure trends and their pattern. Here an attempt is made to highlight some of the issues that need immediate attention.

Expenditure Trends

The expenditure heads under budgetary classification of social services (Education, Public Health and Family Welfare, Housing, Water Supply and Sanitation, Welfare of SC, ST and BC, Labour Welfare) are crucial indicators of human development.

The proportion of expenditure on ‘Social Services’ in the Gross State Domestic Product (GSDP) during the 1980s was in the 6-8 per cent range but dropped in the 1990s to 5-6.5 per cent.

Since 2000-01 it is in the 5.5-6.5 per cent range. The corresponding expenditure proportion on ‘Health and Family Welfare’ in GSDP during the 1980s was about 1 per cent and has declined thereafter. A similar trend is seen in ‘Welfare of SC ST and BC’ and ‘Labour Welfare’.

Primary Education

The proportion of total expenditure (revenue plus capital) on education, art and culture in GSDP during the 1980s ranged between 2.78 per cent and 3.61 per cent and declined in the 1990s (2.15-3.05 per cent). During 2000-06 it ranged between 2.2 per cent and 2.7 per cent.

The revenue expenditure on primary education during 2000-06 was less than 2 per cent of GSDP, which includes such Centrally-sponsored schemes (CSS) as SSA, DPEP, KGVB and NEPGEL that are not reflected in the State budget but spent through State Implementing Authorities. Sans the CSS funds for the aforesaid schemes, the State government expenditure on elementary education would have been lower still.

The corresponding proportions for the years 2006-07 (revised estimates) and 2007-08 (budget estimates) are 2.03 per cent and 2.00 per cent respectively.

In absolute terms, the revenue expenditure on elementary education increased by 1.5 times from Rs 1,569 crore in 2000-01 to Rs 2,413 crore in 2005-06.

But the expenditure in 2005-06 fell by Rs 451 crore (around 16 per cent) and Rs 681 crore (around 22 per cent) compared to the Budget and Revised Estimates respectively. Again the Revised and Budget Estimates for 2006-07 and 2007-08 show a promising increase.

But such estimations may not help achieve the targeted goals, particularly that of inclusive growth. It is the responsibility of the government to see that estimates are more accurate – if not to the BE at least to the RE which are estimated taking eight months’ actuals.

The overall expenditure on elementary education is increasing at the aggregate level, but at the disaggregated level a different picture emerges.

The expenditure trends are inconsistent both in the segregated level of Plan (MSS, CSS and NSP) or non-Plan.

There are certain schemes whose expenditures keep fluctuating (DPEP, SSA, Operation Black Board, Integrated Education for Handicapped, area Intensive Programme for Backward Communities, etc).

The relationship between MSS, CSS and NSP for the same programme for some years is in one direction (either increase or decrease) and for other years just the opposite.

Further analysis of these inconsistencies could hold the key to achieving inclusive growth.

Target Not Reached

According to the National Policy on Education, at least 50 per cent of the total expenditure on education must be allocated to elementary education. Consequently, many State governments changed the design of allocation of resources within education.

In Andhra Pradesh the 50 per cent expenditure towards elementary education was never reached till 2005-06. Though the Revised Estimates of 2006-07 and the Budget Estimates of 2007-08 are around 53 per cent of the total education expenditure, one has to wait till the actuals are available.

Fiscal Marksmanship

Regarding the fiscal marksmanship, while the non-Plan actual expenditure is nearer to the estimates, the Plan expenditure, under which come all the schemes meant for Universalisation of Elementary Education, are far away from the estimates — both Budget and Revised Estimates — diluting the sprit of the education policy.

The funds flow (both Central and State) and their expenditure towards the programmes of SSA shows that less than 50 per cent of the ‘funds released’ was spent during 2001-03 and in 2005-06 88 per cent of the funds lay unspent.

Similarly with regard to NEPGEL — 73 per cent in 2004-05 and 84 per cent in 2005-06 — and KGBV — 48 per cent in 2005-06 — of the funds released were not utilised. This is an important point to be kept in mind while formulating the Inclusive Growth Oriented Eleventh Plan.

Effective intertwining of policy, budgetary allocations and subsequently expenditure management towards education (applied to all expenditure heads under budgetary classification of general, social and economic services) is essential in achieving inclusive growth.

In the absence of this, inclusive growth is would be a dream even during Eleventh Plan Period.

(The author is Associate Fellow, Centre for Economic and Social Studies, Hyderabad. The views are personal.)