An Analysis of Public Finance on Education Sector in India

Abstract

Indian education system is in the mode of massification. Paucity of Finance and quality crunching education sector is a policy discourse today. Joint responsibility of central and state governments for educational development came into existence with the recommendation of Kothari Commission (1976). But, even after many decades, we have not achieved the targeted level of education. This study focuses to examine the trend and pattern of expenditure of central, state and union territories governments on education sector of India. In addition to that paper tries to study the budgetary provision for the education sector by the central government under different five year plans in India. This study is based on secondary data collected mainly from Ministry of Human Resource Development, GoI. The assessment years for the study are from 2000-01 to 2018-19. The study found that due to the policy impact of decentralisation the role and responsibility for financing education in the hand of centre declined and state increased after 2001. The study also reveals that government funding on primary education has become top priority over the years in relation to secondary, higher and technical education. The combined public expenditure incurred by both central and state governments on education hovering around three to four percent of GDP since 2001. There is a need to increase spending on India’s education sector beyond six percent of Gross Domestic Product and per capita expenditure on education should also grow.