Trends in Public Expenditure on Elementary Education in India

The union finance minister has been criticised by commentators for inadequate allocations to the social sector—including health and education—in the budget for the financial year (FY) 2016–17. Looking at elementary education, and specifically at the Sarva Shiksha Abhiyan (SSA), the numbers suggest that central government allocations increased less than 2% in nominal terms between FY 2015–16 and FY 2016–17. As a matter of fact, overall allocations for the SSA have been declining since FY 2013–14.

However, trends over the last 25 years suggest that nearly 80% of social sector spending, including elementary education, has come from states’ own budgets (Business Line 2015). Thus, a full picture of expenditure on elementary education will be clear only when both the SSA and non-SSA expenditure are taken into account. Moreover, the Fourteenth Finance Commission recommendations have led to an increase in union taxes devolved to states, from 32% to 42%, and a consequent decrease in funding through centrally sponsored schemes (CSS). This means that the centre’s role in financing the social sector is likely to continue declining. Going forward, tracking social sector spending, including elementary education, will require analysing state budgets.