World’s largest child population cheated. Again

In the Union Budget 2015-16, finance minister Arun Jaitley seems to have forgotten that contemporary India shabbily hosts the world’s largest population of children and youth (0-24 years) aggregating 600 million. Nor does the finance minister seem aware that the world’s largest child and youth population is the most deprived constituency globally: Dilip Thakore

Union finance minister Arun Jaitley suffered a massive memory lapse on February 28 when he rose to present the first full-fledged budget of the BJP-led NDA government, which swept to power at the Centre last summer with the largest majority of any government since 1985. Despite the BJP’s election manifesto promising to increase the annual expenditure (Centre plus states) on education from the current 3.4 percent of GDP to 6 percent, in the Union Budget 2015-16, Jaitley actually reduced the Central government’s outlay for education from the budgeted Rs.82,771 crore in 2014-15 to Rs.69,075 crore.

The BJP/NDA government’s allocation for education this year suffers in comparison even with the lower revised expenditure (Rs.70,705 crore) incurred by the Union government last fiscal (2014-15), when in his anxiety to maintain the Centre’s fiscal deficit at 4.1 percent of GDP, he slashed education (and health) spending in the last quarter of 2014-15 with higher education expenditure reduced by 24 percent (Rs.3,900 crore) and the Rashtriya Uchchatar Shiksha Abhiyan (National Higher Education Mission) bearing the brunt. Despite this, in Union Budget 2015-16 Jaitley announced the Central government’s intent to promote and establish five greenfield AIIMS (All India Institutes of Medical Sciences), two IITs (Indian Institutes of Technology), and a Centre for Film Production in Arunachal Pradesh, forgetting not only his financial constraints, but also that higher education institutions countrywide are already reporting massive faculty shortages.

Evidently, Jaitley’s amnesia is not restricted to populist promises made in the BJP’s election manifesto. India’s latest celebrity finance minister whose cockeyed Union Budget 2015-16 has attracted the familiar fawning adulation of India Inc, also seems to have forgotten that contemporary India shabbily hosts the world’s largest population of children and youth (0-24 years) aggregating 600 million — a number greater than the entire populations of the US and Europe minus Russia, combined. Nor does the finance minister seem aware that the world’s largest child and youth population — from whom will emerge political and industry leaders, and workforce of the 21st century — is arguably the most short-changed young population globally.

Against global national expenditure per year on education averaging 5 percent of GDP, and developed OECD countries including the US, UK, Japan, South Korea, and Scandanavia budgeting 7-10 percent of their GDP on education, India’s annual expenditure on education (Centre plus states) during 68 years since independence has averaged 3.3 percent of GDP. Only China budgets a lower percentage (2.5-3 percent) of GDP for education, but it’s pertinent to note that its GDP is six multiples of India’s, and that 90 percent of its education outlay flows into primary and vocational education. College and higher education tuition fees are more than ten times that of India’s over-subsidised government colleges and universities. Consequently, adult literacy in China is 95 percent cf. India’s 74 percent and superior quality primary, secondary and higher education has driven the country’s growth, propelling China — which was way behind India in education in 1949 — into a global manufacturing hub with a per capita income of $5,200 cf. India’s $655 adjusted for purchasing power parity.

Nor does Jaitley, the latest in a series of ill-chosen finance ministers who have cruelly neglected development of India’s abundant and high-potential human capital while showering scarce resources upon non-performing public sector enterprises and the country’s selfish middle class by way of unmerited subsidies and tax exemptions to low-productivity Indian industry, seem aware that even the pathetically inadequate amounts being allocated for public education are being spent inefficiently.

According to the Annual Status of Education Report 2014, a survey conducted by the globally respected Mumbai-based NGO Pratham, 53 percent of class V children in (mainly government) schools of rural India can’t read or comprehend class II texts and 81.1 percent can’t do simple division sums. Dismally low levels of education, and especially the mysterious reluctance of state government schools to teach English, have driven 31 percent of desperate rural households to enrol their children in fee-levying private budget schools where standards are marginally better and rudimentary English — which every parent knows is the prerequisite of job mobility and gainful employment — is taught.

Contrary to official opinion, learning outcomes aren’t much better in high school and higher secondary education. According to a Young Citizen National Survey 2015 conducted by Bangalore-based NGO Children’s Movement for Civic Awareness, 74 percent of class IX students and first year undergrads don’t know that legislatures at the Centre and in the states enact laws, 41 percent approve of a certain degree of domestic violence and 65 percent have shockingly regressive attitudes, disapproving of boys and girls of differing religious persuasions meeting in public (see EW cover story March). The result of poor learning outcomes in primary and secondary education is reflected in the small percentage of college graduates in India ready for employment in professionally-managed companies demanding high levels of skills. In 2005, a damning McKinsey World Institute-Nasscom study indicated that 85 percent of the country’s arts, science and commerce graduates, and 75 percent of engineering graduates are unemployable in multinational corporations.

Nor does the finance minister seem aware of the fact that 53 percent of the 230 million children enrolled in primary education countrywide at the start of every academic year, drop out of the education system before class VIII, and that only 20 million enter the country’s ill-equipped 33,000 colleges and 735 universities which as indicated above, churn out millions of under-prepared graduates, saddling Indian industry with the highest training costs worldwide. Nor curiously, has former television star and articulate BJP spokesperson Smriti Irani, hand-picked by prime minister Narendra Modi to head the crucial Union human resource development (aka education) ministry, deemed it incumbent upon her to wise up Jaitley. On the contrary, Irani has maintained a deafening silence on Union Budget 2015-16.

Indeed in the 90-minute budget speech, in which he acknowledged that “more than 64 percent of the total population is below 25 years of age”, Jaitley made no reference to education except under ‘Skill India’, in which while conceding that less than “5 percent of our potential workforce gets formal skills training”, he reiterated a promise of the previous discredited Congress-led UPA-II government to establish a National Skills Mission to “standardise procedures and outcomes across our 31 sector skill councils”; promotion of a rural youth employability scheme (Deen Dayal Upadhyaya Grameen Kaushalya Yojana) with a token outlay of Rs.1,500 crore, and establishment of Student Financial Aid Authority to administer scholarship and education loan schemes. Curiously no explanation was given — or demanded — on why perhaps for the first time in the history of post-independence India, the budgetary outlay for education has not even been adjusted for inflation, and is lower than in the previous year in nominal rupees.

In post-budget press conferences, Jaitley and finance ministry spokespersons explained away the reduction in the Central government’s allocation for education by referring to the BJP/NDA government’s acceptance of the 14th Finance Commission recommendations. In February to promote “the spirit of cooperative federalism”, the commission recommended that the states’ share of the Central government’s divisible tax revenue should be substantially increased from 32 to 42 percent, resulting in an additional Rs.1.41 lakh crore flowing to the states in fiscal 2015-16. Therefore the finance minister’s expectation is that the state governments will increase their education spending.

However in this connection it must be noted that simultaneously New Delhi’s contributions to several Central government sponsored schemes in the states are proposed to be slashed for the same reason. For instance under the national Sarva Shiksha Abhiyan (elementary education for all) programme, the Centre foots 75 percent of the expenditure with each state expected to chip in the remaining 25 percent. Likewise, under its ICDS (Integrated Child Development Services) programme, the Central government has established 1.6 million anganwadis (early childhood nutrition centres which also provide some early childhood education) for which it has provided Rs.8,355 crore in Budget 2015-16 covering 90 percent of the expenditure of anganwadis with state governments topping it up. Now because of the devolution of a greater share of Central taxes, New Delhi’s contributions to centrally-sponsored schemes will be reduced.

Indeed the most unkindest cut in Budget 2015-16 is allocation of a mere Rs.8,355 crore for the ICDS programme, which is meant to provide for 158 million children in the 0-5 age group, from the Rs.18,195 crore budgeted in 2014-15. This more than 50 percent reduction flies in the face of the National Early Childhood Care and Education (NECCE) policy draft accepted by the Union cabinet in September 2013, and a flood of studies which indicate that early childhood education is vitally important for the growth and development of children into stable, productive adults.

“The total budgetary allocation to the Union HRD ministry in 2015-16, is Rs.69,075 crore, 16.5 percent lower than the Rs.82,771 crore budgeted for 2014-15. This decline is predominantly on account of the reduction in Plan expenditure, i.e government expenditure for financing programmes/schemes framed in ongoing or previous five-year plans, on education. The justification provided by the Central government for withdrawal of this support to state governments is that the 14th Finance Commission has recommended — and the Central government has accepted — increased fiscal devolution to states.

A transfer of 42 percent of divisible Central taxes to the states, which was hitherto 32 percent, will increase the states’ share of tax revenue collected by the Centre from Rs.3.82 lakh crore in 2014-15 to Rs.5.23 lakh crore in 2015-16,” says Dr. Protiva Kundu, senior research officer at the Centre for Budget and Governance Accountability (estb. 2005), a highly-reputed Delhi-based think tank.

However according to Kundu because of withdrawal of the Centre’s support to centrally-sponsored schemes, the net amount of resources available to the states from the Centre will only be marginally higher than in 2014-15. “Therefore, there’s a strong possibility that several states, especially the poorer ones, will fail to allocate adequate budgetary resources for the education sector,” she says.

Included in Schedule VII of the Constitution of India, education is a ‘concurrent’ subject with both Parliament and the state legislative assemblies empowered to legislate on it. However education was included in the concurrent list only in 1976 under the 42nd Amendment passed during the Emergency. Prior to that, education development was entirely the preserve of state governments which together incurred expenditure averaging 2.5-3 percent of GDP for education. Despite the 42nd Amendment which enabled the Central government to establish superior quality 1,090 Kendriya Vidyalayas and 551 Jawahar Navodaya Vidyalayas (free-of-charge boarding schools for rural children) affiliated with CBSE in states across the country, education remains a preponderantly state government responsibility. This explains why learning outcomes in the country’s 1.10 million state government schools, as testified by Pratham’s Annual Status of Education Report year after year, are in continuous decline.

The plain, politically incorrect truth is that dominated by ill-educated rustic politicians, state governments have little interest in education and certainly little awareness of 21st century advancements in pedagogies and learning processes. For this tribe, the education sector offers vast opportunities for running textbook printing and publishing, and faculty and teacher appointment rackets. With all state governments insistent upon imposing vernacular languages as the media of instruction upon hapless children in government primaries, there are huge and lucrative opportunities for farming out writing contracts to ill-qualified kith, and printing contracts to benami firms. Likewise, appointing teachers in government schools and manipulating postings and transfers for consideration has become a major racket in states countrywide, for which former Haryana chief minister Om Prakash Chautala has been sentenced to a jail term. Therefore, Dr. Kundu’s apprehension that with budgetary allocations for centrally-sponsored education schemes being slashed, state governments may well lose interest in them is very valid.

However Dr. Narendar Pani an alum of Centre for Development Studies, Trivandrum and JNU, Delhi, former assistant editor (1987-2007) of The Economic Times and currently professor, School of Social Sciences at the National Institute of Advanced Studies, Bangalore, believes that the recommendation of the 14th Finance Commission to award a greater share of the Centre’s tax revenue to state governments will enable them to decide their expenditure priorities within the education sector, and is a step forward in the right direction.

“The challenge of education in India is not just one of quality and quantity, but also of relevance. The education being provided currently in rural areas does little to help school children learn agriculture theory or practice, or acquire skills they would need if and when they migrate to cities. In higher education as well, the type of education designed centrally is not acceptable to industry countrywide, and often renders graduates unemployable. It stands to reason that decentralisation will enable state governments to meet local requirements. From this perspective, Mr. Jaitley’s strategy of transferring resources to the states and leaving it to them to work out their education programmes has considerable merit. Unfortunately the benefit, or otherwise, of this strategy will not be known immediately. The state governments have had just a few weeks after the Union Budget to present their own budgets. This is much too short a time for them to work out alternative approaches at the state level. But if it sets in motion local thinking about a strategy for education relevance, it would be an important step forward,” says Pani.

But while ex facie the argument for further devolution of education planning and development to the states is appealing, it’s unmindful of ground realities and the history of education in post-independence India. The simple unvarnished truth is that during the past six decades since independence, parochial, command-and-control politicians in the states driven by populist sub-national objectives, and neck-deep in textbooks printing and teacher appointment and transfer rackets, have almost totally destroyed public primary, secondary and higher education in the states. Consequently government school education delivered in crumbling, ill-equipped primary-secondaries adopting vernacular languages as the media of instruction without provision of well-written or well-translated textbooks, is not only entirely shunned by the country’s middle class, but even by poorest aspirational households.

This assertion is supported by Pratham’s annual ASER surveys which report continuously falling learning outcomes in rural (mainly government) primaries, and a steady exodus from government primary-secondaries to the country’s ubiquitous and ‘unrecognised’ private budget schools whose number according to the Delhi-based think tank Centre for Civil Society, has swelled to 300,000 with an aggregate enrolment of 60 million children. In higher education as well, while Central government-funded colleges and universities maintain minimal standards — although not a single Indian university is ranked among the world’s Top 200 in the annual league tables published by the London-based rating agencies QS and Times Higher Education — state government funded higher education institutions are widely disparaged as degree factories churning out millions of unemployable youth.

Union Budget reactions

“The Union Budget 2015-16 has seen a sharp decline in the child budget as proportion of total to 3.26 percent from 4.52 percent in 2014-15. In absolute terms, child budget has declined from Rs.81,075.26 crore in 2014-15 (BE) to Rs.57,918.51 crore.” — Komal Ganotra, director, policy, advocacy & research, Child Rights and You (CRY)

“While the setting up of the Student Financial Aid Authority to administer scholarships for higher education is a commendable move, much more could have been done to expand the primary education opportunities available to poor and underprivileged households which is a huge challenge for India.” — Samik Ghosh, principal, Scindia School, Gwalior

“The budget proposals for 2015-16 are growth and investment oriented with a focus on skilled India. It envisions building India through encouragement of entrepreneurs and youth. Greater allocation towards education sector and skill creation can be viewed as a foundation stone for the long term vision of skilled India.” — Prof. Rupa Manjari Ray, assistant professor, MDI Gurgaon

“The emphasis on the National Skills Mission, the launch of welfare scheme ‘Nayi Manzil’ and easier loans for higher education are all steps in the right direction. However, we are disappointed that the legitimate demand from the education sector to exempt schools from service tax on outsourced services has not been met. This will certainly increase the fees burden on parents across the spectrum.” — Shantanu Prakash, chairman, Educomp Solutions Ltd

“Increased thrust on skilling through education and sustained focus on job creation is necessary for initiatives such as ‘Make in India’ to become a reality.” — S. Vaitheeswaran, managing director and chief executive, Manipal Global Education Services Pvt. Ltd

“The Union Budget 2015-16 seems to be forward looking with education being one of the top priority areas of the government. The sector getting a total allocation of Rs.68,968 crore proves the importance it holds for our country.” — KVS Seshasai, CEO, Zee Learn Ltd

“The government has delivered a pragmatic budget. Reducing corporate tax rates will definitely give companies a boost and bring them closer to the Asia average of 21 percent … The government’s decision to upgrade 80,000 rural secondary schools will bring education to the last tier, where it’s needed most.” — Sameer Bora, vice president (R&D), Next Education India Pvt. Ltd

“The Union Budget 2015 has proposed to start IIMs, IITs and other Central government institutes. It is a good step. I fully support expansion of such premier institutes all over India, but the challenge will be to maintain quality of education.” — Dr. R. G. Karandikar, dean, K.J. Somaiya College of Engineering, Vidyavihar, Mumbai

Against this experiential and historical backdrop, the policy decision — implicit in the Union finance minister’s reduction of the Central government’s outlay for education in Budget 2015-16 — is academic suicide, and is certain to dilute the already poor quality teaching and low learning outcomes which are a defining feature of the great majority of publicly-funded schools and higher education institutions. The decision of the year-old BJP/NDA government to give greater latitude to state governments to administer and manage education is reportedly the idea of prime minister Narendra Modi, who during his almost three terms as chief minister of Gujarat (2001-14) experienced lack of funding and autonomy in shaping the education policies of the state.

However it is pertinent to note that academically — and particularly for development of English, the language of business and commerce in India and worldwide — Gujarat is among India’s most laggard states. Indeed the entire premise of devolving greater academic autonomy to state governments is flawed.National integrity and evolution of national standards to facilitate labour and management mobility, and canalisation of professional talent and investment to factor endowed states and corners of the country argue in favour of centralisation of education, teaching English, the link language, and standardisation of syllabuses, curriculums and assessment.

But even as irresponsible politicians and pliant bureaucrats impose ill-considered and half-baked education experiments — the Right to Free and Compulsory Education (RTE) Act, 2009 playing havoc in primary education is the latest example — upon the public and government schools, the deafening silence of academia and relatively educated middle class taxpayers who fund public education institutions, is intriguing. India’s 300 million strong middle class (60 million households) is unique worldwide inasmuch it is completely divorced from the public/government school system, with all its children in private schools.

Therefore it has foolishly permitted subaltern state-level politicians to interfere with, and wreck government schools and education institutions. Curiously, middle class pundits and business leaders seem unable to grasp the proposition that a huge poorly educated underclass working in government, agriculture and industry, results in rock-bottom total factor and labour productivity, which has rendered the 18 million-strong Indian bureaucracy and India Inc highly uncompetitive in the emerging global marketplace.

“As indicated by India’s pathetic per capita budgetary provision for education, neither government nor public is interested in public education. Only very recently, when the hitherto rudimentary Indian economy started to experience an acute skills shortage, has the government and intelligentsia begun to make the connection between public education standards and national prosperity. Despite this, there’s no groundswell in favour of greater investment in developing human capital. This is because of a conspicuous lack of public spiritedness — perhaps hopelessness — within India’s educated middle class which should be pressing for greater accountability and investment in public education. Without substantial improvement in literacy, numeracy and development of cognitive skills in publicly funded government schools and colleges, middle class India’s superpower aspirations will remain a pipe dream,” warns Dr. Geeta Kingdon, managing trustee of the City Montessori School, Lucknow, the world’s largest single-city school chain and top-ranked co-ed day school in Uttar Pradesh (pop. 200 million) in the EW India School Rankings, 2014. An alumna of the London School of Economics and Oxford University, the erudite and well-informed Kingdon is also visiting professor and chair of education economics and international development at the Institute of Education, University of London.

While a great many education leaders are content to derive crumbs of comfort from Union Budget 2015-16 (see box p.79) without appreciation of the dangerous implications of its architecture, knowledgeable monitors of the country’s dismal education scene discern lack of political will to take hard decisions to favour vulnerable (and non-voting) children and youth.

Squeezing the budget for human capital development

The presentation of the Central government’s Union budget on February 28 every year is an event which sends the media into a frenzy of excitement. Yet the plain truth is that the finance minister’s prolonged speech in Parliament to formally present the Union budget to the nation and the budget documents presented to the public, are masterpieces of opacity and obfuscation, designed to mislead rather than enlighten. In sharp contrast to corporate balance-sheets, which present a reasonably accurate picture of the annual operations and performance of companies, the Union and state government budgets are very difficult for even trained economists, let alone lay citizens, to decipher.

For instance, neither the finance minister’s 90-minute budget speech, nor the 296-page Economic Survey which preceded the budget, discloses the GDP (gross domestic product) of the country in current rupees in 2014-15 (Rs.141.08 lakh crore), with the Economic Survey magnanimously offering the net national income at current prices (Rs.124.98 lakh crore). Nor is the number of employees on the payroll of the Union government and its total salaries and wages bill — crucial for judging its efficiency — mentioned in the budget. Neither is there any information in the budget about the head under which the vast travel expenses and perquisites that ministers and MPs award themselves, are accounted.

The editors of this publication are entirely persuaded that within the substantial Rs.17.77 lakh crore Union Budget 2015-16, there are huge opportunities for saving and redeployment of resources into education (and health) on the expenditure side, and opportunities to raise and/or redirect receipts for investment in developing India’s neglected human capital.

For the purpose of raising resources for this vital national priority, we drew upon the expertise of economist Dr. A.S Seetharamu, former professor of education at the Institute of Social & Economic Change (ISEC, Bangalore, estb. 1974) and the Centre for Budgeting and Governance Accountability (CBGA, estb. 2005). However, the resource mobilisation proposals are ours.

“FOOD, FERTILISER and petroleum product subsidies add up to Rs.244,417 crore in Budget 2015-16. By better targeting and distribution cost efficiencies, it is feasible to cut these subsidies by 25 percent to release Rs.61,100 crore for investment in education. Another 20 percent cut in other subsidies (Rs.23,000 crore) can release Rs.5,750 crore. Moreover by raising an additional Rs.40,000 crore through disinvestment of public sector companies, the Central government could mobilise the Rs.110,000 crore required to make all government schools compliant with the norms stipulated by the RTE Act, 2009 as calculated by me for EducationWorld (February, 2015). All it requires is political will and compassion for the country’s neglected children,” says Dr. A.S. Seetharamu, former professor of education at ISEC, Bangalore and currently advisor to the Karnataka state government.

Quite clearly, the finance minister and the BJP/NDA government including Union HRD minister Smriti Irani suffer a compassion deficit, because instead of making a determined effort to increase the Centre’s budgetary outlay for education to at least 1 percent of GDP (Rs.141,08,945 crore) from the woefully inadequate Rs.69,075 crore provisioned for 2015-16 (0.45 percent), they have foolishly devolved greater education autonomy upon state governments which have a very poor record of managing government schools.

With subaltern state politicians accustomed to giving low priority to public education, and unaware of the importance of English as the link language of the Indian Union, the BJP/NDA government’s philosophy of “cooperative federalism” is a recipe for de-schooling and balkanisation of India. It’s time for the country’s intelligentsia, academia and educated middle class to speak up for the nation’s huge educationally short-changed underclass, which because it’s been continuously denied quality education, can’t speak up for itself.