Economics · Ch 12 — Human Capital Formation in India
Growth in Government Expenditure on Education
Growth in Government Expenditure on Education
Government spending on education is measured in two different ways, and each way tells us something distinct:
- As a percentage of total government expenditure, which shows how important education is among all the government's spending priorities.
- As a percentage of Gross Domestic Product (GDP), which shows how much of the nation's income is being committed to developing education.
The trend over the decades. Between 1952 and 2014, education expenditure rose from 7.92 to 15.7 per cent of total government expenditure, and from 0.64 to 4.13 per cent of GDP. The increase over this period was not steady; there was irregular rise and fall throughout. If the private spending by individuals and philanthropic institutions were also included, the total education expenditure would be considerably higher.
How the spending is distributed. Elementary education takes the largest share of total education expenditure, while higher or tertiary education, meaning colleges, polytechnics and universities, gets the smallest share. Yet expenditure per student is higher in tertiary education than in elementary education, because the government spends less overall on the tertiary level while there are far fewer students in it. This does not justify moving funds from tertiary to elementary education, because expanding school education needs more teachers, and those teachers are trained in higher institutions; so spending on all levels of education should be raised together.
Wide gaps between states. In 2014-15, the per capita public expenditure on elementary education differed considerably across states, from as high as Rs 34,651 in Himachal Pradesh to as low as Rs 4,088 in Bihar. Such differences lead to unequal educational opportunities and attainments across states.
Drawn by us to help you understand the concept clearly, and verified to make sure it's accurate. For exams, practice from your NCERT textbook's own diagram.
Own-drawn recreation of NCERT Fig 4.5 …
How much should be spent. The inadequacy of current spending becomes clear when compared with the levels recommended by expert bodies. The Education Commission of 1964-66 recommended that at least 6 per cent of GDP be spent on education, so as to bring about a noticeable improvement in educational outcomes. The Tapas Majumdar Committee, appointed by the government in 1999, estimated that around Rs 1.37 lakh crore would be needed over the ten years from 1998-99 to 2006-07 to bring every Indian child aged 6 to 14 into school. Against the desired level of about 6 per cent of GDP, the current level of a little over 4 per cent has been quite inadequate, and reaching the 6 per cent goal has been accepted as a must for the coming years. …