Educational Financing in India

in India the list of power of the government has been categorized into three

List-1

List-2

and list-3

1st list consists if the areas on which central government holds power

2nd list consists of the areas on which the state governments hold power.

And the third list consists of the areas on which both central government and the state governments hold power jointly.

And the third is known as concurrent list

so if you are asked what the concurrent list is, just say, ‘ it is the list of items on which both central and state governments

hold power jointly in India’.

Power in India

List-2

State Government Only

List -3

Concurrent List

List-1

Central Government Only

Until 1976, education had been in list-2

excepted for only a few areas of it

And Since 1976 ( through a constitutional amendment) it has been in the third i.e. in the

concurrent list

Expenditure in Education

India

The Plan Expenditure The Non- Plan Expenditure

Developmental Purpose Maintenance Purpose

Building a

New School

Introducing a

New Programme Repairing

The Building

Purchasing

New Furniture

Structure of Educational Expenditure in India

Sources of Fund for

Education in India

External Internal

Sources of Educational funding in India

Aid Loan Others Public Private

Fees Endowment Donation Govt. Quazi-Govt.

Central State District Municipalities Panjayath

Meager

Huge

Contribution of Different Sources to Education in India

57%

68.00%

75.60%

81.70%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1950-51 1960-61 1970-71 1980-81

Govt.

Quazi Govt.

Fees

Endowment

68%

74.50%

81.30% 86.10%

32.00%

19.50% 13.70% 13.60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1950-51 1960-61 1970-71 1980-81

Govt.

Private

Contribution of Different Sources to Education in India

Look at Hike in Public Expenditure for Educating

One Pupil

1987-88

1987-88Rs. 884.5 1950-51

1950-51

Rs. 35.6

Look at Hike in Public Expenditure for Educating

One Pupil

That means…. A hike of 2500% within three decades

THE PLANNING COMMISSION

Established during 1950s when the Five-Year Planning Process was launched

Al Plans are discussed and Finalized by it The Level of plan expenditure by state and

central govt. is determined by it. The Programmes and their goals to bbe

realized during each five year plans also is decided by it.

THE PLANNING COMMISSION

75% 75% 74%

67.00% 70%

78%

63%

25.% 25.% 26.%

33.% 30%

22.%

37.%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

FirstFiveYearPlan

SecondFiveYearPlan

ThirdFiveYearPlan

ForthFiveYearPlan

FifthFiveYearPlan

SixthFiveYearplan

SeventhFiveYearPlan

StateGovt.

Central Govt.

Contribution of State Govt. and Central Govt. during Different Five Year Plans

THE FINANCE COMMISSION

THE FINANCE COMMISSION

The Finance Commission takes care of the transfer of non-plan resources between the centre and states. The Finance Commission in India is a statutory body appointed by the President of India once every five years. It makes its recommendation on the distribution of resources based on the provisions of the Constitution.

THE FINANCE COMMISSION

The Finance Commission receives detailed statements from the states of their requirements for each head of account including the details of receipts and expenditures. The Finance Commission, in its tum, reassesses these state forecasts and recommendations for an allocation of resources to be made.

Procedure for Fund Allocation

THE FINANCE COMMISSION & THE PLANNING COMMISSION

An organ of the

Union

government

Development

Process Through

Allocation of Plan-

Expenditure

A constitutional

body

Maintenance

Process through

Allocation of Non-

Plan Expenditure