Impact of Public Education Expenditure on Human Resource Development in India

Abstract

newline ABSTRACT newlineHuman Development Report (HDR) 2015, ranked India 131 among 188 countries on the newlinebasis of indices of life expectancy, educational attainment and per capita income. To add newlinefurther, Economic Survey (2015-16) stated that education index of India as a part of HDI newlinedepicts weak performance and thus suggested that there should be more investment in human newlinecapital. Actually, the 42nd Amendment Act of 1976 shifted the education to concurrent list newlinefrom the state list which made central government more accountable towards education. The newlineNational Education Policies were framed in 1968 and 1986 based on recommendations of newlinevarious commissions. 1986 Education policy was again revised in 1992 and presently, the newlinedraft of New Education Policy is proposed in 2016. The education expenditure as 6 percent of newlineGDP was proposed and recommended strongly by the Kothari Commission (1966), newlineRamamurthy Committee (1991) and the Delors Commission (1996) to name few important newlineones. UNESCO and UNDP also supported the education expenditure to be at 6 percent of newlineGDP as appropriate for developing countries. Developing countries should regard education newlineexpenditure as a vital investment for steady growth and sustainable development. The level of newlinespending by the economically advanced countries like Japan, the US and the USSR as a newlineproportion of their GNP on education and the likely trends in future was also considered in newlinerecommending 6 percent of GDP for education expenditure. Out of many recommendations newlinegiven by Kothari commission, 6 percent of the GDP as education expenditure was accepted newlineby the authorities. But there was always a gap between recommendations and newlineimplementations especially in case of public expenditure on education which might have newlineserious implications on human resource development of the country. Successive governments newlinehave promised to increase state spending but never fulfilled the promise. As against of 6 newlinepercent of GDP, education expenditure was on an average just 3.7 percent in the last one and newlinehalf decade. This funding is one of the serious concerns which may also be reason for low newlineranking of India in terms of Human Development Index. Thus, the present study investigated newlinethe relationship of Public education expenditure with economic growth and human resource newlinedevelopment. For this purpose, time series dataset of public education expenditure by newlineeducation department as percent of GDP, public education expenditure by education and newlineother departments as percent of GDP and as percent of total public expenditure is used which newlineindicate the priority given by the governments towards education published by Ministry of newlineHuman Resource Development. There is positive and significant relationship of public newlineeducation expenditure by education and other departments as percent of GDP and as percent newlineof public expenditure with human development index, education index, mean years of newlineschooling and expected years of schooling whereas the public education expenditure by newlineeducation department as percent of GDP showed significant but negative relationship with newlinehuman development index and its dimensions. It is evident that the contribution of other newlinedepartments in the field of education is proving its importance along with the allocation of newlineresources by the government in total public expenditure. This has to be encouraged to newlinedevelop our human resource by improving level of educational attainment. Another major newlineconcern showed up is inequality which when taken into account has reduced the human newlinedevelopment index by 27.2 percent. More specifically, inequality in education index is the newlinehighest in India. Along with this, gender inequality especially in area of education is found newlinevery high. Unless and until, the inequality in education access is resolved, the goal of human newlinedevelopment seems difficult to reach and for that purpose not only states but centre also has newlineto reframe the public education expenditure policy.