India Increases Education Spending by 16% to 360 Billion Rupees

Watching a national budget presentation normally ranks right around having a root canal or doing one’s taxes. But this past week, India’s educators were glued to the tube and asking The Big Question: would the central government back up the talk of the Right to Education Act with cash?

As the numbers rolled out, the answer was clear. Yes, the central government will fund the Right to Education Act with a 16% increase in primary and secondary education funding.

The new budget keeps all the pensions of the government employees, increases social infrastructure spending, cuts the GDP deficit ratio to 5.5%, and cuts taxes. Projected growth of India’s GDP: 7.5-8.5% in 2010-2011.

And the zeros kept on keeping on. It’s enough to make anyone dizzy.

The budget is a very prudent one; it is cautious rather than flamboyant. It doesn’t cut all taxes. The 2010 budget raises the tax on gasoline and diesel by 5% and tightens up on tax collection through India’s newly developed computerized tax system. It adds and subtracts entitlements and wipes out “off-book” subsidies.  It also keeps some of the stimulus incentives but exits others, and it sells off some small pieces of government owned companies, which are worth another trillion or so rupees.

At the end of the day, it’s just like the household budget you do every week or month. There’s income and expenses, and credit to manage the deficit. It’s just for a country instead of a family. When the deficit is less than before, it’s considered good news. That’s how the finance minister was able to increase social spending while cutting the deficit.

The 16% increase in education raised the central government’s spending on education from 260 billion rupees to 360 billion rupees. If you figure the average government primary or secondary teacher brings home 150,000 to 2000,000 rupees a year, that 360 billion rupees funds a lot of teachers. But it’s just the beginning.

The Five Year Plan for the Right to Education Act 2009 calls for an overall budget of 1.7 trillion rupees. That counts on adding the million teachers and at least 100,000 schools to be built or renovated, plus the costs of training the new teachers. Without a doubt, this money will also go toward raising the salaries of the existing teachers based on some sort of combination of seniority and merit.

So it can be said that the Finance Minister delivered on the promise of the Right to Education Act 2009. The cash will be there.

To put the amount allotted to education in perspective, the Rural Development Budget for 2010-2011 is 660 billion rupees or slightly less than double the funds allocated for education. The whole “social sector” budget for all services to India’s billion citizens is 1.37 trillion rupees. This means primary and secondary education now is about 26% of India’s total social sector spending.

Onwards and upwards now to notification of the Right to Education Act, whereby it is implemented.

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