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Inequality in education levels between states in India over time is demonstrated using Lorenz curves and Gini coefficients.
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ACKNOWLEDGEMENTS
This project has given me immense personal satisfaction and helped me understand
my country better. I profusely thank my Macroeconomics professor Dr. N. Kubendran
for giving us this opportunity to do (what I think is) a wonderful project. I thank the
Economics department and BITS Pilani for this wonderful framework which has made
this project possible.
I am thankful to my family and friends for the support that they have given to me in the
completion of this project.
TABLE OF CONTENTS
1. Introduction ............................................................................................................... 1
2. Significance Of Study ............................................................................................... 2
3. Research Questions ................................................................................................. 3
4. Research Objectives ................................................................................................ 3
5. Period Of Study ........................................................................................................ 3
6. Tools Of Analysis ..................................................................................................... 4
7. Limitations Of The Study .......................................................................................... 4
8. Chapter Plan ............................................................................................................ 4
9. Literature Review ..................................................................................................... 5
10. Educational Inequality ........................................................................................... 7
11. Regional Divide In Education .............................................................................. 10
12. Impact Of Public Policy ....................................................................................... 12
Government Spending .............................................................................................. 13
Literacy Rates ............................................................................................................ 14
Inequality Across States ............................................................................................ 15
13. Conclusions ........................................................................................................ 16
14. References .......................................................................................................... 17
1
1. INTRODUCTION
India is diverse. Cultures, backgrounds, languages, the very way in which people live
vary more across regions India than they do across countries in many parts of the
world. States in India have started off at different levels of development and developed
at different rates due to various reasons. Public policy has, since independence, laid
huge importance to education, one of the most important indicators of human
development. Since 1976, when education was rightly placed on the concurrent list (it
was exclusively the States’ responsibility before), the Indian Governments have actively
tried to tackle the illiteracy problem in the country.
However, due to various reasons, different states have had different rates of success in
this field, and there appears to be a small divide between the states of India when it
comes to education. This project aims to emphasise this divide, investigate the
presence of a regional divide in literacy rates in India and study the impact of public
policy on the divide and on overall literacy rates.
This project considers data from various sources, and using the Lorenz Curve and Gini
Coefficient tools, tries to show the inequality prevalent across states in India. Also, the
trend for Gini Coefficient over time is shown. The concentration of literate individuals in
different parts of the country is examined. Finally, the impact of Fiscal policy on
education and educational inequality in India is examined.
2
2. SIGNIFICANCE OF STUDY
As India ploughs on at high rates of growth, keeping a check on inequality is of
foremost importance. Our forefathers stressed this hard, and our country and
administrators has always been mindful of the inequality. There are many studies on
Economic Inequality in the country. However, educational inequality is a topic barely
touched upon. Particularly, cross-state inequalities are rarely measured. With diversity
comes disparity; and poverty in one of the most important indicators of human
development, education, is not desirable. Thus, this study aims to investigate the cross
state educational inequality and concentration of literates in various regions of the
country. More importantly, impact of public policy on the above factors is studied.
3
3. RESEARCH QUESTIONS
The report aims to answer the following questions:
1. What is the cross state educational inequality (using Gini coefficients) in India
over time? Is there a regional divide in literacy rates in India?
2. How has public policy impacted the literacy rates and educational inequality in
India?
4. RESEARCH OBJECTIVES
The objectives of the report are:
1. To find cross state educational inequality in India using Lorenz Curves and Gini
Coefficients and investigate the presence of a regional divide in literacy rates in India
2. To study the impact of public policy on the literacy rates and educational inequality in
India and to make policy suggestions based on the same.
5. PERIOD OF STUDY
The period of study has been limited to the years 1991-2011 primarily due to the
unavailability of data for the other periods. Also, 1991, 2001 and 2011 are the years
when the Census provides substantial, critical data.
4
6. TOOLS OF ANALYSIS
The study uses secondary data obtained from a host of websites, data banks and
studies. Analysis and graphing of the data has been done on Microsoft Excel. Lorenz
Curves, Gini coefficients, etc. have been found for the data sets considered.
7. LIMITATIONS OF THE STUDY
1. The study is limited due to the availability of data. It only considers the data for
years 1991-2011. Also, in some cases, the only data available is for the years of
the census in this period - 1991, 2001 and 2011.
2. The study employs Gini Coefficients as an indicator of inequality. The gini
coefficients, though intuitive, have the following disadvantages:
a. it is not additive across groups, i.e. the total Gini of a society is not equal
to the sum of the Ginis for its sub-groups
b. Cannot explain some exceptional cases where income inequality could
be different but the Gini coefficients could be the same.
3. Data obtained from different sources, sometimes for the same variable, for
different years (due to unavailability of data). Thus, consistency issues could
arise.
8. CHAPTER PLAN
The report consists of 3 main chapters discussing the following:
Educational inequality across states
Concentration of literacy rates among various regions of India
Impact of public policy on the above and policy suggestions.
5
9. LITERATURE REVIEW
There are very few studies with respect to the topic chosen. However, the following
related studies have been reviewed:
De, A., & Endow, T. (2008). Public Expenditure on Education in India: Recent Trends
and Outcomes – The paper examines the progress made over the years in financing
education by the governments by central, state and local governments. The paper
examines the level and composition of public expenditure on education and the
mechanisms of resource sharing, allocation and utilization. The paper utilises
secondary data from various sources and exhaustively analyses the trends in
government expenditure, the various public policies that have been implimented which
have led to the aforesaid expenditure and the share of this expenditure between the
central and state governments over the years. The paper finds that the though the
expenditure in real terms increased in 1990s it has remained approximately constant
since then. The central government has been playing an increasingly important role in
education in India since the 1976.
Motiram, S., & Sarma, N. (2011, June). Polarization, Inequality and Growth: The Indian
Experience – The paper analyzes polarization in India using consumption expenditure
data. Polarization is a different from inequality and has its own advantages. The paper
shows that the country has become increasingly polarised since the 1990s. This is in
contrast with the earlier periods when the polarisation was decreasing. The paper
suggests that the reforms and liberalisation processes since 1990s have accentuated
the disparities in the country with respect to caste, rural urban, state, region, etc.
However, it does say that the inequality has shown different trends in some cases.
6
Gehring, K., & Kulkarni, K. G. (2006, June). Economic Growth and Income Inequality in
India – This working paper tries to see the impact of the exponential growth of India’s
economy over time in the face of many obstacles such as widespread poverty, limited
natural resources, and a large population. The paper studies economic inequality over
time in India. It employs the Gini coefficient as a tool for studying the inequality over
time. It examines the role of the government in maintaining low levels of inequality.
Also, the paper pays particular attention to the role of the software industry in India’s
growth and whether the industry has impacted inequality in India. The paper finds that
the inequality in India has been low over time, disobeying Kuznet’s inverted U
hypothesis. The paper says that since the country has reformed gradually, the sectors
such as software sectors were able to bloom without any substantial effect on the
general public as a whole.
Thomas, V., Wang, Y., & Fan, X. (2000, December 15). Measuring Education
Inequality: Gini Coefficients of Education – The paper uses education Gini index to
measure inequality in educational attainment. The paper shows us two methods – a
direct and indirect method to calculate the Gini index to measure inequality in
educational attainment. The direct method employs the mean of of all possible pairs of
differences between educational attainment of people. The indirect method involves
finding the Lorenz curves, and finding the Gini coefficients using that. The findings of
the paper indicate that educational inequality has been declining for most countries.
Also, educational inequality is negatively correlated to average years of schooling. The
paper has found that gender gaps are associated with high educational inequality.
7
10. EDUCATIONAL INEQUALITY
The educational inequality in the country was calculated using the literacy rate data of
all the states from the 1991, 2001 and 2011 census data. The Lorenz curves were
plotted for the three years using the data from Table 4 (Appendix). The equality line
represents the egalitarian concept where all the states are equal in their education.
From data, Kerala has continually had the best literacy rates in the country while Bihar
has continually had the worst literacy rates.
Figure 1 – Lorenz Curve 1991
0
10
20
30
40
50
60
70
80
90
100
0 20 40 60 80 100
Cu
mu
lati
ve s
har
e in
to
tal l
ite
rate
ind
ivid
ual
s
Cumulative Population Share
Lorenz Curve - 1991
Lorenz Curve
Equality
8
Figure 2 – Lorenz Curve 1992
Figure 3 – Lorenz Curve – 2011
0
10
20
30
40
50
60
70
80
90
100
0 20 40 60 80 100
Cu
mu
lati
ve s
har
e in
to
tal l
ite
rate
ind
ivid
ual
s
Cumulative population share
Lorenz Curve - 2001
C Lit
Equality
0
10
20
30
40
50
60
70
80
90
100
0 20 40 60 80 100
Cu
mu
lati
ve s
har
e in
to
tal l
ite
rate
ind
ivid
ual
s
Cumulative population share
Lorenz Curve - 2011
Lorenz Curve
Equality
9
Also, the trends of the Gini Coefficients over the years is as shown:
Figure 4 – Gini Coefficient trends
The study thus shows us that the educational inequality across states has been
decreasing over the years, particularly after 2001, and in 2011, the Gini coefficient
comes down to 0.06. This fall has been attributed to the various Central government
plans which have been implemented, particularly the Sarva Shiksha Abhiyan and the
Mid-day meal scheme.
0
0.02
0.04
0.06
0.08
0.1
0.12
1991 2001 2011
Gin
i Co
eff
cie
nt
Year
Gini Coefficient
Gini Coefficient
10
11. REGIONAL DIVIDE IN EDUCATION
To check the presence of a regional divide in literacy rates in the country, the four
administrative regions of the country,
The Northern Zonal Council, comprising the States of Haryana, Himachal Pradesh,
Jammu & Kashmir, Punjab, Rajasthan, National Capital Territory of Delhi and Union
Territory of Chandigarh;
The North-Eastern Council (NEC), comprising Assam Valley, Arunachal Pradesh,
Manipur, Tripura, Mizoram, Meghalaya and Nagaland;
The Central Zonal Council, comprising the States of Chhattisgarh, Uttarakhand, Uttar
Pradesh and Madhya Pradesh;
The Eastern Zonal Council, comprising the States of Bihar, Jharkhand, Orissa, Sikkim
and West Bengal;
The Western Zonal Council, comprising the States of Goa, Gujarat, Maharashtra and
the Union Territories of Daman & Diu and Dadra & Nagar Haveli; and
The Southern Zonal Council, comprising the States of Andhra Pradesh, Karnataka,
Kerala, Tamil Nadu and the Union Territory of Pondicherry.
(Part-III of the States Reorganisation Act, 1956)
The state wise literacy rate data for 2011 for these states were grouped according to
the respective regions:
11
Figure 5 - Mean Literacy (Population Weighted)
The study shows that there is very little difference between the regions in terms of
literacy rates. However, the Eastern states, particularly Bihar, show trends of low
literacy rates, and the Western states show a high literacy rate. Other studies have
shown that there is an East-West divide in the literacy rates in India (rather than a North
South divide). (Asadullah & Yalonetzky, 2010)
64
66
68
70
72
74
76
78
80
82
84
North NE Central Eastern Western Southern
Lite
racy
rat
e (
%)
Region
Mean Literacy (Population Weighted)
12
12. IMPACT OF PUBLIC POLICY
Public policy has changed drastically in favour of education since 1976 when education
was put on the concurrent list. The Center has been playing an increasingly important
role in share of expenditure on education. Primarily, the central government of India
formulated the National Policy on Education (NPE) in 1968 and in 1986 and also
reinforced the Programme of Action (POA) in 1992.
Sarva Shiksha Abhiyan (SSA) is the Government of India's flagship programme for
achievement of Universalization of Elementary Education (UEE), making free
and compulsory Education to the Children of 6-14 years age group, a Fundamental
Right.
The Right of Children to Free and Compulsory Education Act or Right to Education Act
(RTE), which was passed by the Indian parliament on 4 August 2009, describes the
modalities of the importance of free and compulsory education for children between 6
and 14 in India.
The Mid day meal scheme was started in the 1960s in India. However, the policy only
became effective after the landmark Supreme Court order in 2001, after which most
states are implementing the scheme.
The above policies are the most important of the government policies aimed at
complete literacy.
13
Government Spending
The government spending from all departments have been plotted:
Figure 6 - Expenditure on Education
The above graph shows the marked increase in spending on education since the year
2000. This is reflected correspondingly in the literacy rates.
0
50000
100000
150000
200000
250000
300000
1990-91 1995-96 2000-01 2005-06 2010-11
Expenditure on Education
Expenditure on Education(Curr Prices)
14
Literacy rates
The literacy rates over the years have been studied. The following trend lines were
observed.
Figure 7 - Literacy Rate
As is shown, there is a marked increase in the literacy rate. This shows that the
schemes implemented by the government have been tremendously successful in
increasing the literacy rates across the country.
0
10
20
30
40
50
60
70
80
1991 2001 2011
Literacy Rate
Literacy Rate
15
Inequality across states
The following figure is Figure 4 from the previous analysis.
The Right to Education has successfully decreased the inequality across states. The
Gini Coefficient has fallen from 0.11 in 1991 to 0.6 in 2011. The marked improvement is
due to the education for all philosophy taken up by the central government.
0
0.02
0.04
0.06
0.08
0.1
0.12
1991 2001 2011
Gin
i Co
eff
cie
nt
Year
Gini Coefficient
Gini Coefficient
16
13. CONCLUSIONS
The following conclusions were reached according to the above analyses:
1. The Lorenz Curves for education were plotted for the years 1991, 2001 and 2011
and the Gini coefficients were found to be 0.11, 0.10 and 0.06 respectively. Also,
Eastern states were found to have the least literacy rate for the year 2011 while
Western states were found to have the highest.
2. It was found that the public policies implemented in the 1990s and 2000s have been
very effective and the literacy rates have spiked since 2001. Also, the spending on
education has been able to bring about equality in education across states and the Gini
coefficient has seen a huge dip since 2001.
Based on the above, simple, conclusions, it could be suggested that the Government
continue its spending patterns on the Sarva Shiksha Abhiyan and the Mid-Day Meal
scheme, its flagship programmes. Increased spending has had positive impacts on the
literacy rates and we can expect it to continue having such an impact.
17
14. REFERENCES
1. Analysis of Budgeted Expenditure on Education, Ministry of HRD. (n.d.).
2. Asadullah, M. N., & Yalonetzky, G. (2010). Inequality of Educational Opportunity
in India.
3. De, A., & Endow, T. (2008). Public Expenditure on Education in India: Recent
Trends and Outcomes.
4. Economic Survey, 2011-12. (n.d.).
5. Gehring, K., & Kulkarni, K. G. (2006, June). Economic Growth and Income
Inequality in India.
6. Motiram, S., & Sarma, N. (2011, June). Polarization, Inequality and Growth: The
Indian Experience.
7. Primary Census Abstract : Census of India 2001. (n.d.).
8. Registrar General & Census Commissioner of India for Population 1991 data.
(n.d.).
9. Thomas, V., Wang, Y., & Fan, X. (2000, December 15). Measuring Education
Inequality: Gini Coefficients of Education.
18
15. APPENDIX
Literacy Rate Population Literates
Mean Literacy, Population weighted
North Haryana 76.64 21144564 16205194
Himachal Pradesh 83.78 6077900 5092064.6 Jammu & Kashmir 68.74 10143700 6972779.4 Punjab 76.68 24358999 18678480 Rajasthan 67.06 56507188 37893720 Delhi 86.34 13850507 11958528
132082858 96800766 73.28791
NE Arunachal Pradesh 66.95 1097968 735089.58
Assam 73.18 26655528 19506515 Manipur 79.85 2166788 1730180.2 Meghalaya 75.48 2318822 1750246.8 Mizoram 91.58 888573 813755.15 Nagaland 80.11 1990036 1594217.8 Tripura 87.75 3199203 2807300.6
38316918 28937306 75.52096
Central Chattisgarh 71.04 20833803 14800334
Uttarakhand 79.63 8489349 6760068.6 Uttar Pradesh 69.72 166197921 115873191 Madhya Pradesh 70.63 60348023 42623809
255869096 180057401 70.37091
Eastern Bihar 63.82 82998509 52969648
Jharkhand 67.63 26945829 18223464 Orissa 73.45 36804660 27033023 Sikkim 82.2 540851 444579.52 West Bengal 77.08 80176197 61799813
227466046 160470528 70.54702
Western Goa 87.4 1347668 1177861.8
Gujarat 79.31 50671017 40187184 Maharashtra 82.91 96878627 80322070 Daman and Diu 87.07 158204 137748.22 Dadra and Nagar
Haveli 77.65 220490 171210.49
19
149276006 121996074 81.72517
Southern Andhra Pradesh 67.66 76210007 51563691
Karnataka 75.6 52850562 39955025 Kerala 93.91 31841374 29902234 Tamil Nadu 80.33 62405679 50130482
223307622 171551432 76.82292
Table 1 – Region wise literacy rates
Source: Economic Survey, 2011-12, Office of the Registrar General : 2011, Ministry of
Home Affairs
Period Expenditure on Education (Curr Prices) As % of GDP
1990-91 20491 4.01
1991-92 22394 3.8
1992-93 25030 3.72
1993-94 28280 3.62
1994-95 32606 3.56
1995-96 38178 3.56
1996-97 43896 3.53
1997-98 48552 3.49
1998-99 61579 3.85
1999-00 74816.09 4.19
2000-01 82486.48 4.28
2001-02 79865.71 3.81
2002-03 85507.33 3.78
2003-04 89079.25 3.51
2004-05 96694.1 3.26
2005-06 113228.71 3.34
2006-07 137383.99 3.48
2007-08 155797.27 3.4
2008-09 189068.84 3.56
2009-10 242504.82 3.98
2010-11 272137.44 3.8 Table 2 – Expenditure on education 1990-2011
Source: Analysis of Budgeted Expenditure on Education, Ministry of HRD
20
Year Literacy Rate
1991 54.55247428
2001 54.50925212
2011 73.69244573 Table 3 – Literacy rates over the years
State C Pop C Lit
0 0
Bihar 8.577524 7.428409
Arunachal Pradesh 8.691772 7.532203
Rajasthan 14.36202 12.69212
Karnataka 19.41334 17.32788
Andhra Pradesh 26.40937 23.75122
Jharkhand 29.13342 26.2922
Uttar Pradesh 45.62512 41.89491
Maharashtra 54.91066 50.79456
Chhattisgarh 57.02108 52.82902
Assam 59.59664 55.38668
Orissa 63.06281 58.84144
Mizoram 63.15296 58.93378
Kerala 65.91184 61.76407
Himachal Pradesh 66.4784 62.35329
Punjab 68.76764 64.73534
West Bengal 76.31583 72.63051
Dadra & Nagar Haveli 76.34416 72.66037
Haryana 78.43912 74.91502
Uttarakhand 79.27509 75.81834
Meghalaya 79.52001 76.08373
NCT of Delhi 80.90435 77.58863
Tamil Nadu 86.86529 84.08648
Sikkim 86.91551 84.14249
Manipur 87.14041 84.39552
Jammu & Kashmir 88.17735 85.5744
Andaman & Nicobar Islands 88.20874 85.61116
Goa 88.32919 85.75228
Chandigarh 88.41634 85.8545
Puducherry 88.51918 85.97527
Daman & Diu 88.53925 85.99899
Gujarat 93.52883 91.91669
Tripura 93.83218 92.27789
Nagaland 93.99584 92.48128
Madhya Pradesh 99.99468 99.99322
21
Lakshadweep 100 100 Table 4 – Table used to make the Lorenz Curve - 2011
Source: Primary Census Abstract : Census of India 2001, Registrar General & Census
Commissioner of India for Population 1991 data, 2011 Census, Other sources for
literacy rates
Year Gini Coefficient
1991 0.112473514
2001 0.098087831
2011 0.055710156 Table 5 – Gini Coefficients