From where I sit: Reading the budgetary runes

March 25, 2010

If India's economic policy is reflected in its annual budget, what does Finance Minister Pranab Mukherjee's budget tell us about the government's approach to education for 2010-11? Nothing big, the figures suggest.

This has disappointed some observers. J.B.G. Tilak, a professor of educational finance at the National University of Educational Planning and Administration, has decried the lack of emphasis on new initiatives. But the absence of big policy measures may be a blessing. More than new initiatives, institutions created in the past few years (including new Central Universities, Indian Institutes of Technology and Indian Institutes of Management) need to be nurtured.

Professor Tilak also points to the somewhat modest hike the budget proposes in its allocation for higher education - about 15 per cent more than last year. Even with an increase, there is less money for some institutional expenses, including the cash through which central government subsidises the running costs of several higher education institutions.

Will universities and colleges, therefore, finally raise student fees from their unrealistically low levels? This makes sense, although practically, reducing funds is far easier than raising fees. None of the centrally funded colleges has attempted to hike fees because any increase in them results in a cut from their annual grant. The consequence is a kind of institutional hypocrisy, where "tuition charges" remain frozen but students cough up supplementary fees for everything from library facilities to university development funds.

The close attention paid to education's place in the budget, as distinct from details of specific allocations, is a new phenomenon. It reflects an increased sense that the need to expand and improve the education sector is a key national priority.

A few decades ago, however, this was not so. Shanmukham Chetty, the finance minister who presented the first two budgets of a newly independent India, discussed subjects that ranged from resettlement of refugees from Pakistan to dams and irrigation schemes. But for him and for many of his successors, education used to be subsumed into what was described as the sphere of "nation-building", along with medical and public health, scientific surveys and institutions, and even broadcasting and aviation.

The landmark years for education came between 1953-54 and 1956-57, when its budgetary allocation grew more than tenfold. C.D. Deshmukh was the architect of this expansion. Before becoming finance minister, he had been the first Indian governor of the Reserve Bank of India. He later continued his tryst with education as chairman of the University Grants Commission and then vice-chancellor of the University of Delhi.

Interestingly, Prime Minister Manmohan Singh's career trajectory echoes Deshmukh's, albeit in reverse. He, too, served the University of Delhi (as professor of economics), was governor of the Reserve Bank, became chairman of the University Grants Commission, and was then finance minister.

But are increased allocations enough to ensure success? Unlike education, the budget's preoccupation with agriculture has been abiding. Yet that sector has continued to underperform.

It is possible that the allocation for higher education is less important than how higher education's new architecture is consolidated. That, however, is something that cannot be achieved in one fiscal year.

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