Abstract

Prioritizing amongst the competing ends for the government treasury is a big challenge for a developing country like India. Poverty eradication, health and other crucial social needs compete with education and create fiscal pressures. But an investment in education is considered inevitable. This research paper compares public expenditure on education in India in 2005-06 and 2010-11. As observed, government spent more on revenue account than capital account. Share of the State and Union territories in public expenditure on education was more than that of the Centre. States/UTs spending were highest for Non-plan expenditure across all categories of public expenditure on education. Spending was almost double in 2010-11 as compared to 2005-06 in absolute terms but the relative shares between categories hardly changed. Share of expenditure on education was highest for elementary education followed by secondary education, university education & higher education, technical education and then adult education.

Key words– Public expenditure, education, plan, non-plan, revenue, capital, India

INTRODUCTION

There are primarily three sources of financing the education in India i.e. financing through central government, state government and non-government sector (including parents, non-government organizations, banks, philanthropic contributions and as a part of corporate social responsibility activities amongst others). Government is expected to shoulder greater responsibility in providing for education due to the social returns associated with education. The central and state financing is further bifurcated in Revenue account and capital account and Plan and Non-plan expenditure. Expenditures on capital account are long-term in nature. They are used for acquiring fixed assets such as land, building, machinery and equipment. Other items that also fall under this category include loans and advances sanctioned by the Centre to the State governments, union territories and public sector undertakings. However, expenditures incurred for the routine functioning of the government departments and various other services, largely not associated with acquisition of assets such as subsidies, salaries, interest, etc. incurred by the government are referred to as revenue expenditure. Plan expenditure refers to the expenditure devoted towards the funding of the plans by the government. On the other hand, non-plan expenditure refers to the expenditures other than those devoted for the plans of government. Plan and non-plan expenditure are incurred on capital and revenue accounts.

The objective of this paper is to analyze in detail the contributions made by the Centre and the State governments towards expenditure on education in 2005-06 and 2010-11 and observe the changes thereby. The selected years were chosen due to the availability of comparable data. Data for actual expenditure, revised estimates of budgeted expenditure and budgeted estimates were available, but for the purpose of analysis the data related to actual expenditure incurred was only considered. Henceforth State would refer to State and Union territories combine,

CAPITAL AND REVENUE EXPENDITURE ON EDUCATION

In absolute terms the budgeted expenditure on education and other departments by Central and State governments in 2005-06 accounted for INR 1,14,389 crores out of which the expenditure on revenue account was about INR 1,13,229 crores (98.99%), on capital account was about INR 1,143 crores (1%) and on loans and advances was about INR 17 crores (0.01%). Similarly for 2010-11 the total exp