People's Democracy

         SFI Welcomes Thrust On Education In Budget

At a press conference held in New Delhi on July 9, 2004, the Students’ Federation of India (SFI) central leadership broadly welcomed the special emphasis laid on education in the first budget of the UPA government. They noted that it was in keeping with the commitments made regarding education in the CMP. The SFI leaders also gave vent to their misgivings regarding some proposals and the allocations actually made.

The press conference was addressed by SFI president K K Ragesh and general secretary Kallol Roy while SFI joint secretary R Arun Kumar, vice president G Mamata and SFI Delhi state secretary Prasenjit Bose were also present.

Following is the full text of the statement released at the press conference:

THE 2 per cent education cess on all taxes, which is expected to mobilise additional resources to the tune of Rs 4,000-5,000 crore (the budget estimate is Rs 4,910 crore) is a welcome move. Although the finance minister has not increased the total allocation for education beyond the Rs 11,062.07 crore allocated in the interim budget placed by the NDA government earlier this year, it can be presumed from the priorities outlined in his budget speech that the Rs 10,000 crore hike announced in the gross budgetary support for plan expenditure includes the amount of Rs 4,000-5,000 crore expected to be mobilised through the education cess. The finance minister in his speech has specified that the “whole amount collected as cess will be earmarked for education, which will naturally include providing a nutritious cooked midday meal.”  It is necessary therefore to ensure that the Planning Commission does not redirect resources mobilised through the education cess into avenues other than education while making the final allocations.

ALLOCATIONS & REVENUE

In this context it needs to be noted that despite the promise of enhanced expenditure, the actual allocation made for elementary education is still far below the amount required to achieve universal elementary education in the country as mandated by the 86th Constitutional Amendment. The Tapas Majumdar committee appointed by the government had estimated that a sum of Rs.1,37,000 crores was required over a period of 10 years to achieve the goal of universal elementary education. The NDA government’s expenditure on elementary education had fallen such short of the expenditure targets set by the Tapas Majumdar committee so as to make a mockery of the goal of universalisation of elementary education. The finance minister should not lose sight of the expenditure targets set by the Tapas Majumdar committee and continue to progressively increase expenditure on elementary education in the future.

The revenue mobilisation target of Rs 3,80,342.63 crore in the budget, which is an increase of 12.33 per cent over last year’s total revenue receipts, is an ambitious one. The proposals to widen the net of service tax and taxing stock market transactions are positive efforts towards resource mobilisation. Moreover, the transfer of a higher share of tax receipts to the states and the reduction of the interest rate charged from the states on their debts by the centre from 10.5 per cent to 9 per cent would ameliorate the fiscal problems encountered by the state governments to an extent.  Since the state governments together undertake a higher proportion of expenditure on education in the country, any move to devolve more resources to the states would have a benign impact on overall expenditure on education.

However, a tenuous assumption of being able to mobilise a ‘tidy sum’ though the recovery of tax arrears underlies the ambitious figures for revenue mobilisation. The question is what happens to expenditure targets if the revenue mobilisation target is not met? Going by the unjustified fixation with the fiscal deficit shown by the finance minister, a cut in development expenditure can be apprehended in case revenue mobilisation falls below target. We would strongly argue that all the allocations promised in the budget, particularly regarding education, should be spent even if that involves a widening of the revenue and fiscal deficit at the end of the year.  People’s developmental aspirations should be given priority over demands of ‘fiscal discipline’ made by the international financial institutions.

The finance minister expressed his concern about the quality of technical education in the country. While we welcome his emphasis on the upgradation of 500 ITI’s across the country, in consultation with the state governments, we critically note that no concrete financial commitment has been made in this regard and only a general invitation has been extended to the chambers of commerce to join hands with the government in the implementation and design of the scheme. In the backdrop of a virtual stagnation in the real expenditure of the central government on technical education over the years, a concrete financial commitment was warranted.

UNIVERSITY EDUCATION

The SFI is deeply concerned about the insufficient attention of the finance minister towards higher education in general and university education in particular. Besides an announcement that the commercial banks have agreed to raise the ceiling for loans for which no collateral would be required, from Rs 4 lakh to Rs 7.5 lakh, the minister had precious little to offer. According to the minister’s own admission, this step would only benefit those students seeking admission to IIT’s and IIMs. The expenditure on university and higher education by the central government witnessed absolute declines under the NDA regime. The allocation of only Rs 640 crore as plan expenditure on higher education in the present budget does not reflect any fresh thinking on the part of the UPA government. While the SFI is supportive of the emphasis on elementary education, we strongly believe that expenditure on elementary and higher education should not be pitted against each other and should be viewed as complementary. We therefore demand that a proportion of the resources generated through the education cess should be spent on higher education, especially through an increase in the allocation to the university grants commission.

The SFI, while welcoming the thrust of the budget regarding increased expenditure on education as a step in the right direction, would continue with its struggle in the days to come to ensure that the commitment made in the CMP to spend 6 per cent of GDP on education is implemented. Moreover, our concern regarding the grim employment scenario remains, in the absence of any announcement made in the budget regarding lifting the ban on government recruitment. The budget has also fallen short of expectations as far as sufficient outlays for agriculture and rural development and universalisation of the public distribution system are concerned.  Unless these issues are addressed the larger development goals as envisaged in the CMP would remain largely unfulfilled.