Education cess and the Indian Budget

By R.N.Bhaskar

April 6, 2007 (published in the DNA). pdf version available here (2007_04_DNA_education cess absurd_133kb.pdf )

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India’s policymakers evidently want to use mid-day meals to keep more children at schools. They somehow forget that education is not merely keeping children at school, but making them study well.

In survey after survey by non-government bodies, it has been shown that most students do not ‘study’ in school. Even in cities like Mumbai, more than 60% of the students fail to score passing grades! The reason: most teachers are terrible at teaching. Sadly, India’s state governments often conceal this fact through the disgraceful method of granting more ‘grace’ marks at examinations.

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The closer one looks at the causes that compelled the Finance Minister (FM) to increase the education cess in the recent Budget, the more is one convinced that the objectives for which it has been imposed will not get addressed. As things stand, even last year, the amount spent on education was less than what was supposed to have been spent. If that was the case, what was the need to further increase the cess?

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In any case, even when it was first introduced, it was decided that some of the money could be used for financing mid-day meals and not just teaching. India’s policymakers evidently want to use this incentive to keep more children at schools. They somehow forget that education is not merely keeping children at school, but making them study well. <>
In survey after survey by non-government bodies, it has been shown that most students do not ‘study’ in school. Even in cities like Mumbai, more than 60% of the students fail to score passing grades! The reason: most teachers are terrible at teaching. Sadly, India’s state governments often conceal this fact through the disgraceful method of granting more ‘grace’ marks at examinations. <>

But it would be wrong to blame the teachers alone. The major culprit is the government. It has failed to pay teachers well enough to ensure that the best talent comes to this profession. Instead, good talent often gets sucked into other sectors like banking, BPO and other services. The consequence: folks who opt for teaching are invariably those who could not get a job elsewhere. Or they are teacher-parents who wish to be with their children in their formative years. Sometimes, they are people who wish to make more money through tuitions. Except for a microscopic minority of people committed to the cause of teaching, most teachers currently teaching are not those who should be called teachers at all. The situation is worse in states like Maharashtra where even full-time peons get higher starting salary than teachers who are ‘double graduates’ (a graduation degree and a teaching degree)!

Sectorwise share of GDP (at 1993-94 prices)
Sector	1980-81	1993-94	2001-02	2003-04	2005-06

Agriculture (rural)	39.71	30.97	24.23	21.71	19.66
Industry (urban)	23.70	26.26	26.67	26.86	26.22
Services (urban)	36.59	42.77	49.3	51.43	54.11

<>Obviously, the demand for talent by the services sector is bound to grow (see table). From a share of under 40% during 1980-81, services today account for a little over 54% of the country’s GDP and this could grow further. If teaching has to become meaningful, and if India’s demographic dividend has to yield fruit, teachers need to be paid better (and treated better) than say bank clerks. All this will demand much more investment than what the FM has ‘allocated’. <>
One way would be by encouraging private investments in education by offering investors a tax holiday or other financial incentives. The government could also put in a precondition that at least 25% of all the seats in such educational institutes should be reserved for ‘backward’ students. That way, private educational institutes could charge students higher fees, and use the surplus to subsidise the ‘backward’. This way, the state does not have to impose a cess, and more investments permit India to open at least 10 times more than the current number of schools and (better paid) teachers. <>
To prevent managements from making education a purely mercenary function, the government could also impose a condition that all the fees collected would invite taxes and other penalties if less than 70% of the students pass a prescribed examination each year.

<>This way, the government would only lay down standards and norms, and monitor them in order to ascertain if investors qualify for the financial incentives. There would be no need for taxes, and India could take care of its large population’s mind-boggling educational needs.

By merely looking for ways to collect money, the FM has failed to give either India or education a shining future.

Education cess and the Indian Budget

Sectorwise share of GDP (at 1993-94 prices)