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Has Delhi seen a notable increase in spending on education under AAP?

LiveMint logoLiveMint 23-03-2017 Dipti Jain

“We are increasing the education budget every year, whereas the central government, irrespective of the political party in power, has been decreasing the percentage of budget allocation for education every year” said Manish Sisodia while presenting the Delhi government’s budget for FY 2017-18.

The Aam Admi Party (AAP) government has also claimed that this year’s allocation for education is the highest anywhere in the country. Has the AAP truly revolutionized education spending in Delhi?

Data from the Annual Financial Statement for 2017-18, shows that the Delhi budget allocated 23.5% of its total expenditure for education—slightly down from 23.9% in 2016-17, as per revised estimates. In absolute terms, this stands at Rs11,300 crore, up from Rs9,884 crore in the previous fiscal year. These figures are a significant improvement compared to the period before AAP government was formed in February 2015.

RBI’s Study of State Finances document shows that share of education spending has been less than 20% since 2000-01. These statistics also show that Delhi’s education budget is not the highest ever allocation by a state during this period. Meghalaya and Assam had allocated 27.8% and 25.5% of their budgetary spending for education in 2014-15 (revised estimates) and 2000-01, respectively. Bihar too spent 23.7% of its budget on education in 2000-01. It is also a fact that, budgetary allocation for education has been increasing in Delhi in the last decade. AAP’s coming into power seems to have accelerated this trend.

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How does one explain this increase in education spending under the AAP government? Is it the case that other states and centre are not interested in allocating more resources to education, as the AAP would like us to believe? Or is Delhi’s opulence aiding the AAP government to do something which others do not have the resources for?

Delhi, thanks to its high per capita income levels, generates more revenue than its revenue expenditure and also runs a surplus budget. Statistics show that Delhi’s fiscal health has improved after the AAP government took over with fiscal surplus increasing from 0.04% of GSDP in 2014-15 to 0.24% in 2015-16. RBI statistics show that Delhi’s total revenues were 117% of its revenue expenditure in 2015-16 (latest year for which data is available), which is way ahead of others states.

In light of these facts the big question is whether education spending is related to states’ ability to raise more revenue in comparison to their spending? Not necessarily, shows the chart given below.

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While Delhi is a clear outlier in the scatter plot of state’s own revenues as a percentage share of revenue expenditure and allocation to education budgetary spending, poorer states such as Bihar and Assam seem to be spending more on education than states such as Telangana and Gujarat, which are able to raise a higher share of revenue expenditure in taxes.

Similarly, in 2013-14 and 2014-15, states with higher own revenues did not rank high in terms of spending on education.

Clearly, education spending is as much a function of priority as it is of resources available with a state government.

The AAP government does deserve credit for increasing spending on allocation during its tenure. However, it would be wrong to argue that such spending levels are unmatched in history. Whether or not AAP’s education policies are really revolutionary should be judged by improvement in quality of education.

Stirred by the poor reading skills of children in schools, the Delhi government had undertaken a campaign to enhance the reading skills from September 5 to November 14 last year, The Wire reported this week. The report highlights that an assessment carried out by the Delhi government for students from Class 6 to Class 8, found that only 22% managed to read their Hindi textbook while only 43% could read a paragraph. While the campaign resulted in an improvement in learning levels, it also motivated teachers who were stuck teaching the syllabus despite knowing their students could not read, the report said.

Clearly, while an increase in allocation to education is most welcome, it is imperative for the discourse to shift towards addressing learning deficit rather than a mere completion of syllabus.

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