Andhra Pradesh

Public Expenditures on Education in Andhra Pradesh: A Review of Trends, Issues and Problems

Public Expenditures on Education in Andhra Pradesh: A Review of Trends, Issues and Problems

Jandhyala B G Tilak National Institute of Educational Planning and Administration 17-B Sri Aurobindo Marg, New Delhi 110 016

August 1998

Distribution: Restricted

Public Expenditures on Education in Andhra Pradesh: A Review of Trends, Issues and Problems

Ja n d h y a l a B G T ilak National Institute of Educational Planning and Administration 17-B Sri Aurobindo Marg, New Delhi 110 016

Andhra Pradesh Prathamika Vidya Parishad District Primary Education Programme Dq)artment of Education G o v e r n m e n t o f A n d h r a P radesh

Hyderabad August 1998

J a n d h y a la T ilo k : P u b l ic E x t e n d it ijr e o n E i x k :a i k h 4 in A n d h r a P r a d e s h

Acknowledgements

The study has been prepared for the Andhra Pradesh Prathamika Vidya Parishad, Department of Education, Government of Andhra Pradesh as a research input mto the District Primary Education Programme (DPEP). I am grateful to Shri M.V.P.C. Shastry, the then Secretary, Education, Government of Andhra Pradesh, for giving me the opportunity to prepare this study. Shri A. Giridhar, the then State Project Director, DPEP, Shri C. Subrahmanyam, the then Director/Commissioner for School Education have provided all necessary help with cheer, whenever I requested for the same. I have also considerably benefited from the discussions with them at various stages of the work. Discussions with Shri D. Subbarao, Secretary, Departmoit of Finance, and with several officials of the DPEP Bureau and the Directorate of School Education were also very useful. I am also grateful to Shri R. Subrahmanyam, Director, School Education and State Project Director, DPEP for his continued interest and help and cooperation extended to me, in the completion of the study.

11

Ja n d h y a ia T ila k ; PUBUc ExfENDfTURE o n Ko u c a t io n in A n d h r a P r a d e s h

Contents A cknowledgements

Introduction

I

Socio-Economic Development of Andhra Pradesh

6

Education and Development Nexus 3.1 Returns to Investment in Education 3.2 Education, Economic Growth and Poverty 3.3 Education and Health 3.4 Education and Crime

20

Education Situation in the State 4.1 Explosion in Numbers 4.2 The Stock Indicatofs of Education 4.3 The Flow Indicators of Education 4.4 Regional Imbalances in Education Development

29

Recent E>evelopments and Policies in Education

56

Investment in Education 6.1 Trends in Public Expenditure on Education Revenue and Capital Expenditure E?q)enditure on Education by Dq»rtment of Education and Other Departments Plan and Non-Plan Expenditures 6.2 Relative Prior^ies: Inter-Sectoral Allocation of Resources Share of Education in SDP Share of E&ication in the Government Budget Share of Education in Expenditure on Social Sectors Share of Education in Plan Expenditure Education in Five Year Plans 6.3 Intra-Sectoral Allocation of Resources

59

III

J a n d h y a la T ila k : P u B U r EXPl-N Dm 'RF o n EDUrATloN IN A n d h r a 1’ ra pitsh

6.4 6.5 6.6

Intra-Sectoral Allocation of Resources in the Five Year Plans Intra-Sectoral Allocation of Budget Expenditure on Education Functional Allocation of Resources Utilisation of Resources Expenditure per Student Government Expenditure per Student by Socio-economic Category Expendimre per Student in Government and Private Schools

7

Sources of Funds for Education 7.1 Fee Income in Government and Private Schools 7.2 Centre-State Responsibilities in Financing Education 7.3 Family Expendimre on Education 7.4 External Aid

117

8

Government Financing of Private Schools

138

9

Resource Requirements for ElementaryEducation

149

10

Summary and Conclusions 152 10.1 Major Trends in Financing Education 10.2 Measures for Improvement High Priority needed for Education Huge Resource Needs Share of Education in SDP/Budget Expenditure Intra-Sectoral Allocation of Resource Inter-Functional Allocation of Resources Inter-Regional Variations Financing Higher Education Financing the ’Fundamental Right’ Mobilisation of Resources Education Cess Community Contributions and Corpus Fund for Education 10.3 Summary of Recommendations

References

170

IV

J a n d h v a l a T i l a k : P u b l i c H x H i- N o m 'R H

on

I'U)i rA T i(>N

in

A n d h r a I’ r a d r s h

List of Tables

Table Table Table Table Table Table Table Table Table Table Table Table Table Table

1

2 3 4 5

6 7

8 9 10 11 12 13 14

Table 15 Table 16 Table 17 Table 18 Table 19 Table 20 Table 21 Table 22 Table 23 Table 24 Table 25 Table 26 Table 27 Table 28 Table 29 Table 30 Table 31

Selected Development Indicators of Andhra Pradesh Expenditures of the Government of Andhra Pradesh Growth in Revenue Deficit in Andhra Pradesh Growth in Outstanding Public Debt in Andhra Pradesh Rate of Growth in Expenditure and Tax Revenues in Andhra Pradesh (per cent) Revenue Receipts of Andhra Pradesh Poverty m Andhra Pradesh Human Development Index in Select States in India Rates of Return to Education in Andhra Pradesh, 1978 (per cent Correlation between Literacy and Development in Andhra Pradesh Education and Mortality in Andhra Pradesh, 1992 Use of Health Facilities by Education Level in Andhra Pradesh. 1992 Education and Fertility in Andhra Pradesh. 1992 Education and Crime m Andhra Pradesh. 1993 (Number of Prisoners by Education Levels) Growth of Education in Andhra Pradesh Effective Literacy in Andhra Pradesh (per cent) Educational Levels of Population in Andhra Pradesh, 1992-93 Educational Development in Select States in India Educational Levels of Population in Andhra Pradesh, 1992 Index of Education in India, by States Gross Enrolment Ratios in Elementary Education in Andhra Pradesh (per cent) Percentage of Children Attending Schools in Andhra Pradesh, 1987-88 Percentage of Never-Enrolled Children in Andhra Pradesh, 1986-87 School Attendance Rates in Andhra Pradesh, 1992-93 (per cent) Dropout Rates in Elementary Education in Andhra Pradesh (per cent) Pass Rates in SSC/Matriculation/School Leaving Examination (per cent) Reasons for Never-Enrolment of Children in Schools in Andhra Pradesh. 1986-87 Reasons for Dropout and Non-Enrohnent in Schools in Mehboobnagar and Adilabad Districts, 1995 Villages having no Schooling Facilities in Andhra Pradesh, 1993 Availability of Schooling Facilities in Andhra Pradesh, 1993 (Number of Rural Habitations with schooling facilities) Growth in the Number of Schools in Andhra Pradesh

Ja n d h y a la T ila k : PiiBU C ExPEN D m rR E o n E d u c a t io n in A n u h r a P ra i >esh

Table 32 Table 33 Table Table Table Table Table

34 35 36 37 38

Table 39 Table 40 Table 41 Table 42 Table 43 Table 44 Table 45 Table 46 Table 47 Table 48 Table 49 Table 50 Table 51 Table 52 Table 53 Table 54 Table 55 Table 56

Number of Teachers per School Pupil Teacher Ratio in Schools in Andhra Pradesh (Number of Pupils per Teacher) Literacy in Andhra Pradesh, 1991 (per cent) Districts Classified by Level of Literacy in 1991 Growth in Government Expenditure on Education in Andhra Pradesh Per Capita Budget Expendimre on Education, 1995-96 Expendimre on Education Under Revenue and Capital Accounts ui Andhra Pradesh Expenditure on Education by the Department of Education and Other Departments in Andhra Pradesh (Revenue Account) Expendimre on Education and Training by Other Departments in Andhra Pradesh Expendimre on Education of Weaker Sections in Andhra Pradesh (incurred by the Department of Social Welfare) Plan and Non-Plan Expendimre on Education in Andhra Pradesh (incurred by All Departments) Expenditure on Education in Selected States in India, 1993-94 Expenditure on Education as % of SDP and Total Budget Expendimre in Andhra Pradesh Government Expendimre on Education* m Andhra Pradesh Share of Education (All Departments) in Total Plan/Non-Plan Expendimre on Education in Andhra Pradesh (per cent Expenditure on Education in the Five Year Plans in Andhra Pradesh Outlays for Education in the Seventh and Eighth Five Year Plans in Andhra Pradesh Intra-Sectoral Allocation of Public Expendimre on Education in Andhra Pradesh (per cent) Intra-Sectoral Allocation of Public Expendimre on Education in Andhra Pradesh Public Expendimre on Education by Levels in Andhra Pradesh Intra-Sectoral Allocation of Plan and Non-Plan Budget for Education in Andhra Pradesh, 1995-96 Expendimre on School Education, by Items, in Andhra Pradesh, 1990-91 Inter Functional Allocation of Budget Expendimres by Levels of Education in Andhra Pradesh (per cent) Expendimre on Scholarships as % of Total Expendimre on Education in Andhra Pradesh Non-Salary Expendimre in Government and Private Secondary Schools in Andhra Pradesh

VI

Jandiiyata Titak: P i m u c E x in iN O in 'K t o n E d i t a t i o n in ANDHRA PR/U)ESH

Table 57 Table 58 Table 59 Table 60 Table 61 Table 62 Table 63 Table 64 Table Table Table Table

65 66 67 68

Table 69 Table 70

Table 72 Table 73 Table 74 Table 75 Table Table Table Table

76 77 78 79

Table 80 Table 81 Fable 82 Fable 83

Plan Outlays for Education in the Seventh and Eighth Five Year Plans in Andhra Pradesh Under-Utilisation of Plan Resources for School Education in the Eighth Five Year Plan in Andhra Pradesh Direct/Recurring Expenditure per Student in School Education in Andhra Pradesh Recurring Expenditure on Higher Education per Student in Andhra Pradesh Colleges Degree Standard and above Recurring Expenditure per Student, 1990-91 Government Expenditure on Education per Student (by Household Income Group), 1980-81 Government Expenditure on Education per Student (by Caste Background), 1980-81 Expenditure per Student in Government and Private Secondary Schools in Andhra Pradesh Sources of Funds for Education in Andhra Pradesh (per cent) Source-Wise Recurring Income of School Education in Andhra Pradesh Sources of Income for Higher Education in Andhra Pradesh Average Fee Income* in Govenmient and Private Secondary Schools in Andhra Pradesh Central Government’s Assistance to Andhra Pradesh for Education, 1995-96 Trends in Central Assistance to Andhra Pradesh for Selected Schemes in Education Table 71 Financing the Plan Expenditure on Education in Andhra Pradesh by Centre and the State (per cent) Average Monthly Expenses of Schooling in Andhra Pradesh (Rs per Suident) Item-wise Monthly Expenditure on Schooling (All Levels of School Education) in Andhra Pradesh (Rs per Student) Regression for Monthly Expenditure on Schooling per Student Household Expenditure on Elementary Education per Student, by Household Income Groups in Andhra Pradesh, 1992-93 Growth in Schools by Type of Management in Andhra Pradesh Distributicm of Schools by Management in Andhra Pradesh (per cent) Growth of Colleges in Aiuihra Pradesh Distributioo of Institutions, Government Expenditure and Enrohnents by Type of Schools, 1993-94 Govemmott Expenditure by Type of Schools in Andhra Pradesh, 1993-94 Government Expenditure by Type of Schools in Andhra Pradesh: Grant per Institution and per Student, 1993-94 Estimated Contribution of Private Management to Education in Andhra Pradesh, 1987-88 Estimated Contribution of Total Private Sector to Education in Andhra Pradesh

vii

Ja n d h y a la T ila k : PuBUC E x p O N D m m e ON E d (' c a t io n in A n d h r a P r a d e s h

Table 84 Table 85

Requirement of Additional Funds for Universalisation of Elementary Education in Andhra Pradesh in the Ninth Five Year Plan Allocations to Education in the Ninth Five Year Plan in Andhra Pradesh

List of Figures

Figure 1 Figure 2 Figure Figure Figure Figure

3 4 5 6

Figure Figure Figure Figure Figure

7 8 9 10 11

Human Development Index by States in India, 1991 Per capita Budget Expendimre on Education in Selected States in India, 199596 Share of Education in SDP in Andhra Pradesh Share of Education in SDP in Selected States in India, 1993-94 Share of Education in Total Government Expendimre in Andhra Pradesh Share of Education in Total Government Expendimre in Selected States in India, 1995-% Share of Education in Five Year Plans in Andhra Pradesh Allocation to Education in the Ninth Five Year Plan in Andhra Pradesh Recurring Expenditure per Smdent in Primary Education, 1990-91 Sources of Funds for Education in Andhra Pradesh Family Expenditure on Education in Andhra Pradesh

Vlll

JandhyaU T ilak; Pl'BLiC- EXPENDnTRE on Em cATlos lv

P r .'VDESH

Public Expenditures on Education in Andhra Pradesh: A Review of Trends, Issues and Problems

Education is ftindamental to all round development of any society.

It is a means to human development and human

empowerment. Government of Andhra Pradesh (1997d. p. 1).

No nation goes bankrupt by investing in education of her people.

1

Introduction

The contribution of education to development is well recognised all over the world since the days of the 'human investment revolution in economic thought* (Schultz, 1961) and in India in particular after the Education Commission (1966) had highlighted the role of education in development.

In fact, even the very first Fi\e Year Plan (1951-56) had

recognised the vital role that education plays in socioeconomic development. Education is viewed as an important instrument of economic growth, distribution and socioeconomic development in general. The concq)t of ’investment in education’ was recognised by the Government of India, and it was explicitly adopted in the National Policy on Education 1968 and also in the National Polic\ on Education 1986 (including revised Policy 1992). In view

J a n d h y a la T ila k : P u b l ic E x P K N o m iR i: o n EiM'rATK)N in A n d h r a P r a d e s h

of the multitude of effects of literacy and education on various facets of socioeconomic development, particularly on economic growth, poverty, income distribution, infant/child mortality, life expectancy, general health status of population, growth in population, and quality of life in general (see e.g., Tilak, 1994a), and keeping in view the needs of the fast growing education system, the Government of India has promised to allocate at least six per cent of GDP to education by the end of the ninth Five Year Plan (1997-2002).

Also

recognising the effects of various levels of education, and the unfinished tasks enshrined in the Constitution o f India, special emphasis is being laid on elementary education.

The

Constitution o f India requires the government to provide universal free and compulsory education to all children in the age-group of 6-14.

The target date of achieving

universalisation of elementary education has been repeatedly postponed, and now it is hoped to be accomplished by the end of the ninth Five Year Plan, i.e., by 2002 AD.

As an

important follow-up measure of the National Policy on Education 1986, a massive programme of provision of critical infrastructural facilities and other inputs, including teachers had been launched.

The progranmie called ’Operation Blackboard’ provided

additional teachers, additional school buildings/classrooms, and teaching learning material and several other inputs to all the primary schools in the country. The programme is being extended to the upper primary education during the ninth Five Year Plan,

^ lite a few

important programmes of incentives including provision of noon meals, free textbooks, uniforms, etc., are strengthened in recent years. Currently, the Government of India has also initiated efforts to make elementary education a ftmdamental right in the Constitution and to make it compulsory for all the children. A bill for the same is pending before the Parliament.

There have also been successful attempts to mobilise external resources for

elementary education and a massive programme of improvement of quality of primary education is under way under the name of District Primary Education Programme (DPEP).

J a n d h v a la T ila k : PUBLIC E x p e n d it t 'RE o n E tH ifA U O N in A n d h r a PKADE.sti

Following the 73rd and the 74th amendments to the Constitution, efforts are being made to decentralise planning and management aspects of many areas of operation, including education. Andhra Pradesh, a state in south India is a part and parcel of all these national developmental efforts relating to education. The state is one of the late entrants into the DPEP arena. While attempts are being made to reduce inter-state differences in education development, still significant differences exist. While states like Kerala, Himachal Pradesh, Maharashtra and Tamil Nadu have progressed significantly in education, as many as ten major states in India, including Andhra Pradesh, are still educationally backward. Andhra Piadesh is one of the backward states with rates of literacy, enrolments and other indicators of education development less than not only several advanced states, but also less than national averages. The relative position of the state in terms of education development has been consistently unsatisfactory since mid 1970s (see Tilak, 1979) on wards, as we shall discuss later. Economically the state is not so backward as in case of education. All this requires a critical examination of the education situation in the state of Andhra Pradesh and its policies and practice relating to education development. However, this no! the scope of the present study.

The present study is deliberately confined to an

examination of a few select issues and problems relating to financing of education in the state.

Since finances form a major policy instrument of the government, a critical

examination of the finances and related aspects of education is hoped to provide valuable insights into the problem of relative backwardness of the state of Andhra Pradesh in education and how the situation can be improved. The smdy presents an analytical and descriptive review of major issues in financing education in Andhra Pradesh. Some of the available statistics and research evidence on a few important aspects relating to financing of education in the state are critically examined.

Jandhyala Tilak: P u B U C E x p e n d i t u r e o n E D i't’ATioN in A n d i i r a P r a d e s h

The principal focus of the paper is to review recent trends in public expenditure on education in Andhra Pradesh. After presenting a quick account of the current education situation in the state as evolved over the years since the formation of the state in the present form in 1956, the paper focuses in the remainder on aspects relating to public expenditures on education and related issues. A variety of indicators of quantitative expansion of education, and quality of education are briefly examined. Analysis of expenditure on education includes discussion on trends in public expenditure on education, inter-sectoral and intra-sectoral patterns of expenditures, inter-ftmctional allocation of resources, sources of finances, costs of education, resource requirements for the ftiture, mobUisation of resources, external aid etc. There is a close relationship between public expendimre and household expenditures on education. Hence any study on public expenditures on education cannot ignore analyzing at least some crucial aspects relating to family expenditures on education as well. The extent of household expendimres on education is briefly reviewed in the present study. The focus of the paper is on school education, more particularly elementary education, though discussion on higher education is not altogether avoided. An important contribution of the study is a detailed statistical profile of the state on financing education. The study is based on public and unpublished data collected from different sources: national and state government publications and other research studies. Important published statistical reports of the Government India, inter alia, include. Education in India, Analysis o f Budgeted Expenditure on Education, Selected Educational Statistics, and the Annual Reports. These sources of information are supplemented by the publications of the Planning Commission (viz.. Five Year Plans, Annual Plans, Analysis o f the Annual Plan: Education Sector, Report o f the National Development Council’s Committee on Literacy, etc.), the Ministry of Fmance (viz.. Economic Survey and the Budgets), Central Statistical Organisation (viz.. National Accounts Statistics), the National Sample Survey Organisation (viz..

jandhyala T ilak : P i)B U c HXPENom iRE ON E d u c a h o n in A n d h r a P r a d e s h

Sarvekshana), and National Council of Educational Research and Training (viz., All-India Educational Survey). These publications, most of which are regular annual and/or periodic publications of various years have been used in the present study. These are supplemented by the published and unpublished information collected from the state government, particulary. Statistical Abstract o f Andhra Pradesh, Economic Survey o f Andhra Pradesh, Five Year Plans, Survey o f Economic Trends and Annual Plans, and Budget documents, and information collected through discussions with the state governments officials.

Rather

relatively a more reliance on national sources is deliberately opted for, as national sources provide data that are comparable across different states. Though it is not a major focus of the study, it is attempted here to compare the performance of Andhra Pradesh in education with that of various other states of the Indian union. One may note minor discrepancies in statistics relating to the most recent years. This is because of use of different sources, some of which provide some particular details, and some do not. Data for the most recent years are also subject to marginal revision, as they are ’revised estimates' and/or ’budget estimates’. Secondly, it may be noted that neither the selection of the issues in the study is exhaustive, nor discussion on each issue is thorough a i# in depth. A thorough and critical analysis of each policy issue is outside the scope of the study. In this sense, the study has a limited objective of presenting a review of trends in public expenditures on education in the state and a broad perspective of problems and policy issues relating to the same. Not withstanding some of these limitations, the study is hoped to contribute to informed policy making in education in Andhra Pradesh.

J a n d h y a la T ila k : P l'B U c EXPENDiTURC o n Ed i 'c a t io n in A n d h r a P ra d esh

2

Socio-Economic Development of Andhra Pradesh

With an estimated population of about 7.2 crores* (in 1996), Andhra Pradesh is the sixth largest state in India in terms of size of population. Population of the state has been urreasing rapidly. The rate of growth of population seems to be still on rise. Population has increased between 1981 and 1991 at a decadal rate of growth of 24.2 per cent. Between 1961 and 1971 the growth rate was only 2.1 per cent per annum, which increased to 2.3 per cent between 1971 and 1981. Sex ratio, i.e., number of women per one thousand men, an indicator of social preference for gender balanced development of population, has been declining continuously from 977 in 1971 to 975 in 1981 and to 972 in 1991, though it is still better than all-India level. Both these dimensions relating to the demography of the stale should be a matter of concern. Andhra Pradesh is one of the middle income states in India with a per capita SDP of Rs.8,615 in 1995-96, compared to the national income per capita income of Rs.9,517. Andhra Pradesh ranks 11th from above in per capita income among the 25 states of Indian union (EPWRF, 1997). In terms of SDP, the state accounts for 7.1 per cent of the country’s gross domestic product. [Table 1] Not only in terms of SDP per capita, but also in terms of real rate of growth in SDP, tiie state of Andhra Pradesh stands behind many states and all-India average. While the growth rate in the state has been on average above five per cent during the 1980s, during the 1990s it has fallen to about three per cent. The rate of growth in per capita income was 2.5 percent in Andhra Pradesh between 1980-81 and 1990-91, compared to 3.1 per cent at all-

A crore equals ten million and a lakh equals one-tenth of a million.

JandhvalaTilak: P l'B u r ExPENDm'Rr- on I-d it a t io n in A ndhra P rai>fsh

India level. Agricultural sector in the state accounts for 37 per cent of the SDP of the state in 1995-96, manufacturing sector 10.5 per cent and the other (service) sector 51.6 per cent. The respective figures were 43.1 per cent, 11.2 per cent and 45.7 per cent in 1980-81 (see EPWRF, 1997). Though there has been improvement in the sectoral distribution of GDP in favour of manufacturing and service sectors, the improvement is not very significant. Since 1983-84 there has been revenue deficit almost continuously in the state budget, while the preceding decade was associated with surplus. The revenue deficit in 1997-98 was estimated to be above Rs.1,180 crores, compared to Rs.740 crores in 1995-96 and Rs.576 crores in 1996-97. [Table 3]

Though the total fiscal deficit* as a proportion of total

expenditure and also as a proportion of SDP declined since the late 1980s, still the proportions are rather high. As a proportion of the total expendimre the fiscal deficit formed about 17 per cent in 1993-94, and as a proportion of SDP it was above four per cent (see Sarma and Sreedevi, 1994; and Sarma, 1995). Another problem with the budgetary situation is rapid growth in public debt. The outstanding public debt of the Government of Andhra Pradesh has increased five-fold during the last decade from Rs.3,700 cores in 1985-86 to Rs. 18,000 crores in 1995-96. In per capita terms the debt amounts to Rs.2,500 in 1995-96. [Table 4]

The unsatisfactory

budgetary position of the state is due to several factors. The growth in non-development expendimre is much higher than the growth in development expendimre.^ During 1990-91 to 1994-95 the annual rate of growth of non-development expendimre was 19.2 per cent

2

Fiscal deficit is defined as the difference between the total expenditure and the revenue receipts.

3

While development expenditure includes plan and non-plan expenditure on social and economic services, non-development expenditure includes plan and non-plan expenditure on organs of state, fiscal services such as collection of taxes, interest payments administrative services, pensions, etc.

7

Jandtiyala Tilak; PuBiJc EXPENDmiRii o n EorcA TJO N in A n d h r a P r a d e s h

compared to 16.6 per cent in development expenditure. The difference was larger during 1985-86 to 1989-90. Secondly, the rates of growth in expenditure -- development or non­ development — have outstripped the rate of growth in state’s own tax revenues.

For

instance, while state’s own tax revenues increased at an annual rate of growth of 12.2 per cent during 1990-91 to 1994-95, development expenditure increased at a rate of growth of 16.6 per cent and non-development expenditure 19.2 per cent, widening the resource gap ftnther and ftirther. [Table 5] There are other sources of revenues for the state, in addition to own tax revenues. They are: non-tax revenues (that include interest earnings, profits of state government enterprises and other miscellaneous earnings of the government), state’s share in central taxes, and grants from the Centre. It has to be noted that state’s own tax revenues are the single largest source of revenues for the state and in relative proportions this is increasing in die recent years in Andhra Pradesh. [Table 6] The state was found to have performed exceptionally well in raising taxes from its own sources during the 1980s and Andhra Padesh topped all the major states in this respect (Bagchi and Sen, 1992); but during the fint half of the 1990s, the tax efforts of the state have marginally declined. The share of the state in central tax revenues has been somewhat static during 1995-96 to 1997-98; and in relative terms the contributions from other sources are declining.

More recent fiscal

inidadves in terms of increase in tariffs in sectors such as power, water and transport, reduction m rice subsidies, and increases in taxes like professional tax and turnover tax on trade and the like are estimated to yield Rs.2,100 crores and thereby reduce the state’s fiscal deficit to three per cent of SDP by the end of 1998-99 and this is hoped to put the state’s finances on a ’sustainable path.’'*

Times o f India (New Delhi) (10 August 1998, p.l 1)

8

Jandhyala Tilak: P i'B L ir UxPENorn'Ri;

on

liDK AiioN IN A n d h r a P r a d k s h

Tlie state has made impressive progress in terms of reduction of poverty.

The

proportion of the poor in total population has declined from 49 per cent in 1973-74 to 22 per cent in 1993-94, according the ’modified’ estimates of the Planing Commission (1997). The relative position of the state m terms of the poverty ratio also showed improvement, falling from 18 to 23 among the 25 states. [Table 7] The progress may owe to some of the welfare policies, including specifically public distribution system - subsidised rice distribution system implemented as a part of Pragathi Patham, adopted by the state government during the last two decades. However, still 1.5 crore population were below the poverty line in 1993-94 compared to 1.8 crore in 1973-74. One among every 20 poor in India lives in Andhra Pradesh. h is not only in terms of poverty, but also in terms of several indicators of human development, the state is in a marginally better position than many other states in general and the average level in India as a whole. According to the latest estimates, the infant mortality rate in the state is 64 compared to 74 per thousand in India; and the life expectancy in the state is 60.5 years compared to 59.3 years in the country on average. The general health index^ is marginally higher for the state compared to the coimtry as a whole [as already shown in Table 1]. The level of development in the state is not homogeneous. Inter-regional differences in socioeconomic development are large within the state. The three regions of the state, viz., Coastal region, Rayalaseema and Telangana rank in the same order in terms of socioeconomic development. Inter-district variations within each region are also marked, some of which are discussed later.

5

the index is based on life expectancy, infant mortality and index of education, which in turn is based on literacy and middle school enrolment ratios. See UNFPA (1997).

Jandhyaia TUak: H/BUC: HXPENDITURE ON E d u c :a t io n in A n d h r a P r a d e ^

The Government of Andhra Pradesh is preparing a long term plan of development "Vision 2020" that will articulate the development goals of the state which is that Andhra Pradesh should be the fastest growing state in the country and should surpass the growth rates of many fast growing countries of the world. The Government wants to make the state a ’model state’ of development for others in India.

One of the key components of

development strategy is development of information technology.^ A state that aims at rapid promotion of information technology and at becoming a model state can ill-afford to ignore its education systems. In fact, high priority needs to be accorded to education, as this will be a critical factor for the ’growth engines’ to work.

Figure I

Human Develofmeiit Index bj' States in fada, 1991 Value o f the Index 0.4 Jammu & Kashmir LktarPndesh Bhar Macliya Pradcafa Oiisssa Rajasthan Assam Aadhia Pndesh Hmachal Pradesh W:st Bengal Karnataka Tamil Na above national average)

Medium Level Districts (Literacy: < national average but > above state average)

Low Literacy Districts (Literacy: < sate average)

Very Low Literacy DisU’icts (Literacy: < 40%)

Hyderabad West Godavari Krishna

Chittor Rangareddy East Godavari Cuddppah Nellore Guntur Visakhapatnam

Anantpur Khammam Prakasham Kurnool

Warangal Nalgonda Karimnagar Srikakulam Vizianagaram Nizamabad Adilabad Medak

55

Ja n d h y a la T ila k : PUBLIC E x P E N o n u R E o n E d u c a t io n in A n d h r a P r a d e s h

5

Recent Developments in Education in the State The Government of Andhra Pradesh realises the strategic importance of education for

achieving basic objectives of economic growth, equity and self reliance. For instance, the Government of Andhra Pradesh (1997e, p. 14) stated clearly: "Education is one of the principal instruments for achieving the socio-economic development." At the same time the Government is also aware of the current status of the education situation, when it states, rather repeatedly that "Andhra Pradesh is one of the nine educationally backward states in India, marked by insufficient enrohnent rate and high dropout rates.." (Government of Andhra Pradesh, 1997c).

Accordingly, special efforts are being made to improve the

education situation in the state.

Elementary education was included as one of the basic

minimum services. The Ninth Five Year Plan aims at universalisation of primary education, including provision of necessary schools, universal enrohnent and retention up to Class V and with particular emphasis on girl children. In addition to several conventional programmes of development and on-going initiatives to improve the education situation in the state, the state government has launched a few significant programmes. Only a couple of them are briefly mentioned here. The Andhra Pradesh Open School Society was formed in 1992 with an aim at enroling 25,000 school dropouts every year into Classes V to X. Currently it is ftmctioning in 14 districts. In cooperation with voluntary organisations, in 1997 a programme called ’Back to School’ was launched with a view to bring the children in the labour force to schools.

18

It may have to be noted that while the national goal is universalisation of elementary education by the end of the ninth Five Year Plan, the Government of Andhra Pradesh confmes its goal to primary education only.

56

Jandhyala Tilak: Pl'BLIC EXPENOm iRE ON EDUCATION IN ANDHRA PRADESH

Primarily aimed at scheduled castes, the programme offers two months intensive coaching in hostels run by Department of Social Welfare to the children drawn from labour market, so that their academic levels are made equal to the level when they dropped out of school and admit them to nearby formal schools. The state would also like to provide universal computer literacy by 2010 to all, so that the state could be in the forefront of other states in information technology. Quite a few imiovative experiments are being made to improve the education management in the state. Decentralisation in educational planning and administration has been one particular area, where some important reforms have been introduced in the most recent past.

Decentralisation improves participation of the community and helps in the

overall efficiency of the education system.

The 73rd and the 74th Constitutional

Amendments provide for elaborate mechanism for decentralisation and increased role of Panchayati Raj instimtions. Panchayati Raj instimtions. viz.. Gram Panchayats, Panchayat Samithis and Zilla Parishads have been ftmctioning in the state since 1959. In fact, Andhra Pradesh was one of the two states to have introduced the system of Panchayat Raj. During the last four decades the Panchayats have passed through various phases: a phase of high praise (1959-64), a phase of stagnation (l% 5-69), a phase of decline (1970-83) and a phase of reforms (1983 onwards). The growth and decline of Panchayat Raj system in the state had little impact on education (Jain, 1996). Education has not got any favoured treatment or otherwise. However, the influence of Panchayat Raj on education was more in qualitative terms rather than quantitative terms. The main drawback of the system was diat the local people or decision makers have hardly any say on educational processes, policies, programmes or their implementation. Accordingly the Narasimhan Committee (Government of Andhra Pradesh, 1981. p. 249) had recommended that academic and administrative

57

Jandhyala Tilak: PuBUc ExPENDrrt'RE o n E d u c a t i o n in A n d h r a P r a d e s h

supervision of primary and secondary schools in rural areas should be under the control of the Panchayat Raj bodies. Following the recommendations of the Narasimhan Committee, and more importantly the detailed reconmiendations of the Ramakrishna Rao Committee (1995) that was specifically appointed by the Government of Andhra Pradesh with a view to reform school education thorough participation of the conmiunity in education, the Government of Andhra Pradesh has enacted a state legislation in April 1998 for reforming school education in the state.

The Act promises to eliminate the main weakness of the earlier Panchayati Raj

system and provides establishment of Committees for people’s participation in educational activities at various levels - a school committee, a Panchayat Education Committee, Mandal Education Committee, Municipal Education Committee, District Education Committee, and for monitoring the activities relating to education two boards one at district level called District Education Board and another state level called State Advisory Board for School Education.

These conmiittees at various levels are expected to be composed of parents,

community leaders and teachers, with a fair representation of women. The Committees are vested with several powers including resource generation. Thus a significant move has been made on the part of the government to decentralise the administration of school education in the state.

19

Act No. 13 of 1998: An Act to Provide for Reforming School Education in Andhra Pradesh by ensuring People’s Participation in Administration of Schools...

58

Ja n d h y a la T ila k : P u b l ic E x p e n d it u r e o n E d u c a t io n in A n d h r a P r a d esh

Investment in Education

The problem of resource scarcity is assuming serious proportions everywhere, including in Andhra Pradesh, while, at the same time the need for more resources is increasing rapidly. First let us note the growth in expenditure on education in the past. The educational expansion that took place in the state since the formation of the state was of course possible due to the growth in investment in education. Investment in education takes place in two domains: institutional or public domain and household domain (Majumdar, 1983). First, the public investments in education.

6.1

Trends in Public Expenditure on Education Public expendimre on education has increased in the state of Andhra Pradesh

remarkably during the post independence period, particularly since the formation of the state o f Andhra Pradesh in 1956. The increase in public expenditure on education was by 160 times during the forty-year period. It increased from Rs. 14.8 crores in 1956-57 to Rs.2,400 crores in 1995-96.

Expenditure on education per capita has increased by more than 120

times from Rs.4.40 to Rs.537 during the same period. Even concentrating on the more recent period, government expenditure on education has increased by about 12 times from Rs.227 crores in 1980-81 to Rs.2,418 crores in 1995-96 (budget estimates).

These

impressive increases, however, do not remain so impressive, if one (a) looks at the trends not in current (nominal) prices but in real prices, i.e., after adjusting for increase in prices, (b) compares these trends with the growth in population and (c) compares them with the

5 9

Jandhyala Tilak: PUBLIC ExPEN D m jR E o n E d u c a t i o n in A n d h r a P r a d e s h

growth in student population in particular. In real (1980-81) p r ic e s ,th e total government expenditure on education was just nearly doubled during this period. [Table 36] In current prices, the government expenditure on education per capita increased eight times from Rs.42 to Rs.325 between 1980-81 and 1995-96, while in 1980-81 prices, it has increased from Rs.42 to only Rs.74, i.e., by 75 per cent only. Between 1990-91 and 199596, the increase was negligible, Rs.5 in real terms. Further, the current level of expenditure on education per capita in Andhra Pradesh is not favourably comparable with that in other states. It is also less than the national average.

Figure 2

Per C ^ t a BiHtget f ^ n d t u r e on Education in Selected States in India, 199S-96

8(K)

HmachalPiadesh

Kerab

J& K Pmjab TamiNadfu Assam Goiarat KanMUka Mahanatra Haryana Rajasthan Al-lndk Andhra Pradesh Mfest Bengal Madhya Pradesh Oiiua Uttar Pradesh Biiar

ISouices:Tabfe

20

State income deflators are used throughout the paper, unless otherwise mentioned, to convert all the figures from current prices into constant (real) prices, with 1980-81 as the base. SDP figures are drawn from EPWRF (1997).

60

Jandhyala Tilak; PuBU c ExPEN D rruR E o n E d u c a t i o n in A n d h r a P r a d e s h

Andhra Pradesh ranks 12th from above among the 17 major states in terms of per capita budget expenditure on education in 1995-96, spending just Rs.335 per head of population, compared to Rs.650 in Himachal Pradesh, Rs.565 in Kerala - the two most advanced states in education development, and compared to above Rs.400 in several states. [Figure 2] Even an economically backward state like Rajasthan spends a higher level of expendimre on education per capita than Andhra Pradesh. [Table 37] A close correspondence between public expenditures on education per capita and education development can be easily noted, suggesting the need for stepping-up of public expendimres on education in educationally backward states such as Andhra Pradesh.

Revenue and Capital Expenditure Government expendimre on education is incurred under two categories, viz., ’revenue’ and ’capital’ accounts.^*

Capital account comprises of state’s own loans and

grants and also those from the central government and other sources.

Mosdy, one

concentrates in case of education sector specifically, on revenue expendimre only, as it forms the most of the total expendimre on education. For example, more than 90 per cent of the total expendimre on education in the state has been incurred under revenue account until 1993-94. The expendimre on capital account has been very small.^ It is only since 199495, the share of the capital account in the total seems to be rising, according to the

21

Expendimres on the revenue account are further classified into plan expendimres and non-plan expendimres.

22

However, expendimre incurred under revenue account, includes capital expendimre on buildings, flimimre, equipment etc. The classification of government expenditure under ’revenue account’ and ’capital account’ should not be confused with the nature of expendimres - current and capital.

61

Ja n d h y a la T ila k : PuBUc ExPENorruRE o n E d u c a t i o n in A n d h r a P r a d e s h

revised/budget estimates. In 1995-96 revenue expenditure accounts for 86 per cent of the total and the capital expenditure 14 per cent. [Table 38] Further, expenditure on capital account on education also forms only about one per cent of the total expenditure of the government on capital account on all sectors in 1995-96 (budget estimates), which was 1.45 per cent in 1990-91. It may be reiterated that bulk of the expenditure on education comes under revenue account.

Hence one might focus on

revenue expenditures only.

Expenditure on Education by Department o f Education and Other Departments Expendimre on education is incurred by the government not only by the Department of Education, but also by other Departments.

For example, the Ministry of Defence (in

central government) runs schools such as Sainik or Army Schools for children of its employees.

Ministry of Railways also runs schools.

Among the several departments,

important ones at the state level spending on education, including specifically in Andhra Pradesh, include Department of Social Welfare, Department of Tribal Welfare (on school education). Department of Health and Medicine (on medical education, including nursing and dentistry). Department of Agriculture (on agricultural education), etc. Expenditure on school buildings under the programme of Operation Blackboard is nowadays incurred by the Department of Rural Development under the National Rural Employment Programme (NREP). In case of school education in Andhra Pradesh, the Departments of Tribal Welfare, Social Welfare and Backward Classes are important.-^ While the Department of Education

23

For example, there are presently 3,367 single teacher primary schools {Gramin Vidya Vikas Kendras) and 448 Ashram schools and 504 hostels meant for primary, upper primary and high school children belonging to scheduled tribes, run by the Department of Tribal Welfare; the Department of Social Welfare runs 150 residential schools and several student hostels (including 50 orphanages, 14 children homes, 75 vimukthi hostels and 2210 hostels) for scheduled caste children; and the Department

62

Ja n d h y a la T ila k : P u b l i c ExPENDrruRE o n E d u c a t i o n in A n d h r a P r a d e s h

meets a major share of expenditure on education, other Departments in the state are found to finance about one-fifth to one-fourth of the total expenditure on education. [Table 39] Hence to focus on the expenditure on education incurred by the Department of Education and to ignore the expenditure incurred by other Departments would lead to serious under estimation of total government expenditure on education in any state in hidia in general, including specifically in the present context, in Andhra Pradesh. The other departments spend on three kinds of education: formal education, training and informal education.

But most of the expenditure is on formal education.

Training

activities receive a small amount of resources, and informal education negligible amounts. [Table 40] Further, in the recent years the Department of Social Welfare is found to be contributing to about 13-15 per cent of the total expendimre on school education, and the I>epartment of Tribal Welfare about three per cent. Specifically in case of elementary education, nearly 95 per cent of the total expenditure comes from the Department of Education alone. The Departments of Tribal Welfare and Social Welfare share the remaining five per cent, the former accounting for about four per cent. The Department of Social Welfare has been gradually increasing its expenditures on e(kication o f Scheduled Castes, Scheduled Tribes and other backward castes, under both plan and non-plan categories. Between 1994-95 and 1997-98 the expenditure on education of Scheduled Tribes increased by 75 per cent, on Scheduled Tribes by 60 per cent and on other backward castes by nearly 50 per cent. [Table 41]

of Welfare of Backward Classes runs 63 Ashram schools and 267 hostels. Government of Andhra Pradesh (1995, p. 8).

6 3

See

J a n d h y a la T ila k : P u B U c ExpENDfTURE ON E d i i c a t i o n in A n d h r a P r a d e s h

Since expansion of education benefits all departments and all sectors of the economy, it may be good if every department allocates a small fraction of their budget to education directly to spend on education by themselves or to reallocate in favour of the education sector. In this sense, it is not only a few departments, such as the Departments of Tribal Welfare and Social Welfare, all other departments may be required to allocate a fixed proportion of their budgets to education sector.

Plan and Non-Plan Expenditures The total revenue expenditure on education (and other sectors) incurred by the Department of Education and/or by other Departments, is composed of ’plan’ and ’non-plan’ expenditure. Plan expenditure is generally meant for plan or development activities (new programmes, projects, schemes, new schools, new buildings, new teachers, etc.), while non­ plan expendimre is meant for maintenance of the existing system. That is, plan expenditure is usually identified with quantitative expansion as well as qualitative improvement, and the later is the committed expendimre on the existing system, like salaries of the existing staff, expenditure on the maintenance of the schools, etc. So all plan expendimres are transferred into non-plan account by the end of each Five Year Plan. Thus as the system expands, non­ plan expendimre bulges rapidly. Accordingly a large bulk of the expendimre on education in India presently is of non-plan category. In Andhra Pradesh also, the plan expendimres on education forms relatively a small proportion, about ten per cent of the total expendimre on education and non-plan expendimre 90 per cent.

While both plan and non-plan

expendimres are important, it is to be noted that plan expendimres can set new directions for development. At the same time, the resource planners enjoy more freedom or they exercise more leverage with plan resources, as they can be increased or cut. without affecting the existing system, than with non-plan resources, as the later are committed expenditures. For

64

Jandhyala Tilak: PUBLIC E x p e n d iti'R E o n E d u c a t k ) n in A n d h r a P r a d e s h

the same reason, one does not find a steady growth in plan expenditures on education, as one finds in case of non-plan expenditure. For example, plan expenditure on education in the state increased from Rs.42 crores in 1982-83 to Rs. 67 cores in the following year. But in the subsequent years, the same went on declining. Similarly it declined from Rs. 138 crores in 1989-90 to Rs.79 crores in 1990-91. In relative proportions also plan expenditures formed 4.1 per cent in 1980-81 and it increased to 12.6 per cent in 1995-96. On die whole, the growth in non-plan expenditure has not at all been smooth. [Table 42] It is natural that as the system of education expands, the relative share of plan expenditure comes down and the share of non-plan expenditure increases. But as along as the unfinished tasks are huge in terms of, say for example, additional school buildings and classrooms to be constructed, additional teachers to be recruited, additional programmes are to be launched for the improvement in quality, equity etc., in addition to programmes for expansion, the financial needs of the plan category are also important. Therefore, it would be necessary to see that plan expenditures are not subject to serious fluctuations every year and, on the other hand, they increase steadily in real terms.

6.2

Relative Priorities: Inter-Sectoral Aliocation of Resources The priority given to education in the framework of the total state economy can be

analysed in terms of a variety of indicators. Important ones are: share of education in SDP, share of education in total government expendimre, and share of education in five year plan outlays/expenditures. Some of them are briefly examined here.

Share o f Education in SDP One of the most standard indicators of government efforts towards development of education is per cent of state income spent on education. This also shows the priority given

6 5

Jandhyala Tilak: P u B U c E xPEN D iniR E o n E d u c a t i o n in A n d h r a P r a d e s h

by the society to education vis-a-vis other sectors. The performance of the state of Andhra Pradesh is impressive in this regard, if one considers the growth during last four decades. Public expenditure on education as a proportion of SDP increased from 0.83 per cent in 1956-57 to 3.9 per cent in 1995-96. [Figure 3] During the first two decades, i.e., between 1956-57 and 1975-76, the proportion increased by 3.3 times.

But during the next two

decades, i.e., between 1975-76 and 1995-96 the increase was marginal, just by 40 per cent.

Figure 3

Share of Education in SDP in Andhra Pradesh

6u

jSouice:Tabb44.i

If we concentrate on the period since 1980-81, the performance of the state, as in many other states is not really remarkable.

Government expenditure on education (incurred by all

departments) in the state formed a little above three per cent of its SDP in 1980-81, which increased to 3.9 per cent in 1995-96, i.e, the increase was by 0,8 per cent pomts during a period of more than a decade and a half. It was higher (4.47 per cent) in 1992-93 and then declined steeply.

6 6

Jan d h y a la T ila k : PUBLIC ExpENDrruRE ON E d u c a t i o n in A n d h r a P r a d e o t

The Government of India has promised to allocate at least six per cent of GDP to education by the end of the ninth Five Year Plan. Himachal Pradesh and Kerala already spend above six per cent of their respective SDP on e d u c a tio n .E v e n some of the economically backward states such as Assam, Bihar, Madhya Pradesh, Orissa and Rajasthan aJlocate a higher proportion of their respective SDP than Andhra Pradesh. [Figure 4] Among the major 18 states in India, Andhra Pradesh ranks very low - 13 with respect to this important indicator.

Figure 4

Share of Education in SDP in Selected States in India, 1993-94

Pimjnb flaiyana Mahanstta Al^lndk UbarPradech Bengal Aiufiin Pradeah Karnataka G«qarat Madhya Pradesh Tamia Nadn Bliar Otiua Rajasthan Assam K cnk Himachal Pradesh

|s«ujccjTabfc^

24

Jammu and Kashmir and Tripura spend above ten per cent.

25

One can note that some of the backward states, such as Rajasthan, Orissa and Bihar allocate a larger proportion of their SDP to education than some of the economically better off states like Punjab, Haryana and Madhya Pradesh. A part of this is due, inter alia, to relatively small size of SDP of the economically weaker states. Hence it is necessary that some ’normative’ estimates of SDP have to be worked out, of which the allocation to education can be worked out to be at least six per cent. See Tilak (1997c).

67

J a n d h y a la T ila k : PuBU c E x p e n d i t u r e o n E d u c a t i o n in A n d h r a P r a d e s h

Andhra Pradesh has to make special efforts to raise its allocation to education as a proportion of its SDP to reach the national norm of six per cent during the ninth Five Year Plan period. If the state income (NSDP) continues to grow at the dismal rate of growth of three per cent (as experienced during the 1990s), it means that the state has to increase its spending on education in (1980-81 prices) to a level of nearly Rs. 1,0(X) crores, compared to the present level of Rs.536 cores in 1995-96). If SDP increases at an annual rate of growth of about five per cent as experienced during the 1980s, by the end of the ninth Five Year Plan the state has to allocate Rs. 1,100 crores to education in 1980-81 prices, i.e., it has to double its expenditure in real prices in about five years. This is indeed a gigantic task, given the experience that it took nearly fifteen years to double the expenditure in the past between 1980-81 and 1995-96.

Share o f Education in the Government Budget A more important gauge of governmental priority given to education is measured in terms of expenditure on education as a percentage share of total government expenditore. This is more important because, the government has more direct control on government expendimre than on SDP. In Andhra Pradesh 22.2 per cent of the revenue budget of the state was allocated to education in 1995-96. The share was higher, above 25 per cent in 1989-90 and it was 28 per cent in 1982-83. [Figure 5] The corresponding proportion in Kerala, Assam and West Bengal is much higher according to the latest available figures. Kerala spends nearly 30 per cent of its budget on education; so does Assam. It was 25 per cent in West Bengal. [Figure 6] The relative position of Andhra Pradesh in terms of share of the budget spent on education, is relatively better.

It is one of the top four states (among the 16 major states).

In

comparison with other states, the performance of the state with respect to this indicator is

6 8

Jandhyala Tilak: PuB uc E x p e n d i t i i r e o n E d i 'c a t i o n in A n d h r a P r a d e s h

also better than the performance of the state with respect to share of education in SDP. [Table 43]

Figures

Share of Education in Total Gowrnemnt Expenditure in Andhra Pradesh

g CL

(source^TabfcJ^

Figure 6

Share of Education in Total Govtrnment Expenditure in Selected States in India, 1993-94

Haryuu Puo|ib U u r Pradesh Himachal Pndesh

Gi^t

Kamauka B lur

Ckw

Rajasthan Mahaimstn Tamia Nadu Anenditure incurred by private sector on its (private) schools and colleges - particularly the unaided schools and colleges. This is discussed in Section 8.

1 17

Ja n d h y a la T ila k : PUBUC ExPEN D iT im E o n Ei DDC a t io n IN ANDHRA P r a d e s h

India, as well as in Andhra Pradesh in particular.

In Andhra Pradesh, tiie share of the

government, central and state together, in financing education has increased from 62 per cent in 1956-57 to 87 per cent in 1983-84, the latest year for which such data are available. [Table 65] The shares of all other sources, viz., local bodies, student fees, endowments and others have dwindled.

F^ure 10

Sources

u€ F^ncb

for Education in Andhra Pradesh

100

80

t o.

60

40

20

1956-57

1960^1

1965-66

1970-71

1980^1

1983-84

The relative contribution of local bodies such as Zilla Parishads, Panchayats, etc., has declined from about 15 per cent to about 8 per cent. Now most local bodies rely upon transfer of resources from the state. Few local bodies have their own reliable revenue base. The contribution of the students in term of fees also declined from about 15 per cent to 8 per cent during the same period. [Figure 10] These trends are not uncommon to Andhra Pradesh alone. Similar trends could be noted in case of other states and all-India as well (see Tilak, 1995a). The decline in relative contribution of fees and other sources has been due to the

118

Jandhyala Tilak: P u B U c EXPENDITURE

on

E d u c a t io n in A n d h r a P r a d e s h

deliberate public policy of expanding access of population in general, particularly belonging to the weaker sections to education at all levels. More recent information and in greater detail are available by levels of school education. [Table 66] In 1990-91 most of the school education -- primary, middle and high school education - are financed by the government to the extent of above 90 per cent, primary education being financed to the extent of 97 per cent. The contribution of fees is of the order of about five per cent in secondary education. But in highfer secondary schools, which are relatively very few in number, as per the available information, students meet nearly 60 per cent of the total recurring costs in the form of fees.

This was the same

situation in 1980-81 as well. Government finances account for a little less than one-third of the total recurring expenditure in higher secondary schools. Similar detailed, but dated, data on higher education indicate that the government meets about 80 per cent of the recurring costs of higher education, the smdents meeting about 15 per cent and endowments and others constimte the balance, about five per cent. [Table 67] The relative contribution of the students in higher education in Andhra Pradesh is marginally higher than all-India average (see Tilak, 1993). This might indicate that the possibility of higher rates of cost recovery in the universities is rather limited.

The

contribution of the students include not only tuition fees, but also hostel fees, and other fees including examination fees, etc., whidi some times seem to be much higher than the tuition fees. Concentration on tuition fee alone for any analysis or for any policy purpose might lead us to misleading conclusions.”

36

This is found to be true, when the experience of many advanced and developing countries is closely examined. See Tilak (1997a).

37

For example, Srivastava and Sen (1997) estimated cost recovery rates and public subsidies m education by concentrating on tuition fee only and accordingly produced estimates on cost recovery that are far below the actual ones.

119

J a n d h y a ia T iia k : PuB U C E x P E N o m JR E o n E d u c a t io n in A n d h r a P ra d es h

7.1

Fee Income in Gk)vemment and Private Schools From the macro level information, it has been found that fee has not been a very

important source of funds of school education in Andhra Pradesh.

Since elementary

education is expected to be free, one cannot and should not expect any revenues from fees. However, some amount of fee revenues do accrue to the state even ii case of primary/elementary education. For example, the rate of cost recovery (fee ircome as a proportion of the budgetary expendimre) in elementary education in the state in 1993-94 was 0.78 per cent (Srivastava and Sen, 1997, p. 143).^* In case of private aided aid unaided schools, the cost recovery rates are believed to be much higher. A survey of twenty secondary schools in Khammam district reveals that this is true with respect to government schools and also with respect to private aided schools. [Table 68] Not only the total expendimre of private unaided schools is met by smdent fees, but also in fact, a huge surplus is generated from fee income.

Fee income per smdent in private

unaided schools amounts to more than 200 per cent of the expenditure per studmt.

7.2

Centre-State Responsibilities in Financing Education In the Indian federal system, the financial responsibilities of the centra and state

governments are unportant. Resources are transferred from the centre to the states through the Planning Commission and through the Finance Commission. The Finance Conmission’s recommendations refer to non-plan expenditure, most of which in case of education is composed of salaries; and hence there is not much flexibility. On the other haid, the size

38

Generally it is felt that these estimates are under estimates, as they refei to the fee, generally only tuition fee, income accrued to the state exchequer, but do not refer to the total fees of all kinds paid by the students to schools.

120

JandhyalaTilak;

P u b l ic BxPENDrruKB o n E d u c a h o n

An d h r a P r a d e s h

o f assistaice in terms of plan resources could considerably influence the total size of the state plan. As has already been noted, a large part of the expenditure on education is met by the state government and the share of the Central government is very small.

As per the

Constitutional arrangements, central government is eiq)ected to shoulder more responsibility o f iiiiancing higher education. But even with respect to higher education, states meet most o f the recarring expenditures and this is true in case of Andhra PradeSh as well. [Table 67] Two-thirds of the total expenditure on higher education in the state is met by the state; and tlie share of the central government including UGC forms less than ten per cent of the total. However, the central government and the University Grants Commission together finances about 40 per cent of the non-recurring expenditure (probably under ’plan’ category) of universities and 46 per cent of the expenditure of the Degree colleges. Universities in the state depend upon central government for a sizeable part of their needs of non-recurring nature, which flow not necessarily direcdy from the central government, but through the UGC. Central government finances education (and a few other seaors) in the states through (ai) centrally sponsored schemes and (b) central schemes. The central schemes are totally financed by the central government, while the centrally sponsored schemes are only partially financed by the central government; the balance in case of the centrally sponsored schemes is met by the state government.

Develofnnent of Sanskrit, literacy campaigns, etc., are

totally financed by the Central government. Other programmes that come under either of these categories include DPEP, promotion of classical languages, education for disabled children, mid-day meals and Operation Blackboard, science education, education technology, environmental education, etc. The funds received by the state under these schemes cannot be reallocated in favour other sectors.

They are earmarked outlays for the specific

121

Jandhyala Tilak: P u b l ic E x P E N o m 'R E

programmes.

on

E d u c a t io n in A n d h r a P r a d e s h

The rationale for centrally sponsored schemes is to enable the states to

undertake progranmies that are considered to be in the wider national interest, which the states may not be able or not willing to undertake on their own. The assistance of the central government to Andhra Pradesh towards expenditure on the centrally sponsored schemes has been relatively higher than the expenditure on central schemes. [Table 69]

For example, in 1995-96 the expendimre on centrally sponsored

schemes was Rs. 42 crores, compared to Rs.6.4 cores on cental schemes in education. Secondly, in case of both centrally sponsored and central schemes, the actual expenditure may be less than the original outlays; the difference is larger in case of centrally sponsored schemes.

This may be because, the state government might withdraw its willingness to

match the central assistance for the centrally sponsored scheme. The actual amount received under these schemes also depends on the level of implementation by the state, which may be subject to state’s changing preferences and priorities. As a result, the total expenditure on the centrally sponsored schemes could be much less than original outlays. Thirdly, we notice that there have been frequent fluctuations in the growth of central assistance to education to Andhra Pradesh for various schemes, which might cause problems of continuity and sustenance of the various schemes at a planned level of growth. [Table 70] Funds for centrally sponsored schemes also depend upon the fiscal position of the central government. It is necessary that central assistance to centrally sponsored or central schemes is maintained at a steady rate of growth. Lastly, these progranunes are marked by rigidity. For instance, programmes like operation blackboard, non-formal education are based on uniform pattern of norms. Local specificities cannot be introduced into such schemes. On the other hand, state government enjoys considerable freedom in allocating its own resources (including statutorily transferred taxes from the centre) and the block grants from the centre between different sectors.

1 2 2

J a n d h y a la T ila k ; P u b l ic E x P E N im v R E o n E d u c a t io n in A n d h r a P r a d e s h

On the whole, central government’s assistance in financing education in Andhra Pradesh is not high.

In case of plan expenditure on education, the share of the central

government has increased considerably from abut 6 per cent in 1982-83 to 43 per cent in 1988-89; but then declined to 35 per cent in 1992-93. In case of elementary education in particular, the centre financed 17 per cent of the plan expenditure in 1992-93.

The

correspondmg figure in 1988-89 was as high as 46 per cent. [Table 71] Thus the share of the centre has indeed declined during the 1990s, i.e., after the economic policies were introduced.

When the central government was required to reduce its revenue and fiscal

deficits, one of the methods adopted was obviously to reduce grants to the states and this could be easily noted, as documented also by Jalan and Subbarao (1995). Further, in the context of the federal system of the country, and more specifically in the context of the 73rd and 74th amendments of the Constimtion, the role of local bodies becomes important. There should be a steady devolution of resources to the local bodies to meet the educational needs. The State Finance Commissions have to explicitly take into consideration the educational needs of the different local bodies. Local bodies may also be required to generate some resources for educational development to supplement the devolutions received from the state.

7.3

Fam ily Expenditure on Education Though school education (in classes I to X) is said to be free in Andhra Pradesh,

households are foimd to be spending considerable amounts on primary, upper primary and secondary education, not to speak of higher education. For a long time, it was widely held that family expenditure on education was not substantial. But when detailed estimates are made available, it is clear that the inq>ression was not right. For example, according to the estimates of Panchamukhi (1990), household expendimre on school education in Andhra

123

Ja n d h y a la T iia k ; PUBUC E x P E N o m 'R E o n E d i 'c a t io n in A n d h r a P r a d esh

Pradesh was as high as, if not higher than, the government expenditure on school educuion. In 1987-88 the household expenditure on school education was about Rs.670 crores^^, vhich was nearly equal to the government expenditure on school education When the family expenditures are estimated in detail by grade/class based ipon a survey of 379 households in three villages in Mehboobnagar and Adilabad ditricts (Krishnaji, 1996), several interesting aspects came to light. (a)

Family expenditures on schooling are quite sizeable -- Rs.28 per month per clild in primary schools. [Table 72] This may be compared with the per capita incone of about Rs.200 per month. As a proportion of total household expenditures, housjholds spend between 1-15 per cent on schooling of their children in various villages

(b)

Expenditures increase by grade (Grade 1 to X) and correspondingly by level of education (Primary, upper primary and high school). It was estimated to beR s.l9 per month in Grade I, which increases to Rs.42 in Grade V. It suddenly junps to Rs.61 in Grade VI and to Rs.85 in Grade VIII.

(c)

It is also strikingly clear that family expenditures are less for girls than for boys. Smaller amounts are spent on girls’ education than boys’ education, partly tecause girls dropout of (or are withdrawn from) the school with increasing a ^ , and expenditures rise by increasing grades. The differences between family expenditures between boys and girls are accounted mostly by differences in travel costs anl costs on private tuition. The third important item is the uniforms.

39

Panchamukhi (1990) also estimated the total expenditure of the private sector (household expenditure plus the expenditure of the private management on edication) and expenditure of the private (aided and unaided schools) management on school education in several states.

40

The family expenditure has increased to about Rs.900 crores in 1988-89.

24

Jandhyala Tilak: P u B U C ExrENDtTURE ON E d u c a t io n

(d)

in

An d h r a P radesh

Also contrary to the general impression that only a few rich students spend on education on their own, sizeable number of students even among the poor families were found to be incurring various types of expenditure on school education. However, family expenditures are higher among non-poor famihes than among poor, presimubly because of their higher ability to spend more on items such as books, uniforms and private mition.

(e)

Apart from fees, books and unifomis, families also spend considerable amounts on private tuition and travel of the children to and fro school and home. [Figure 11] Certainly a school within the village is least cosdy. [Table 73]

Figure II

Family EqiendNure* on Sciiooliiig io Andira Pracksh a0.6^Boobis

(1 9 J» ^ F e c s

(18.7%)Uoifonns

(lO .l^O theis

(13.7