Opinion Education finance

First principles of public accountability require that expenditures must adequately reflect citizens’ interests and priorities. When it comes to basic services,citizens’ interests are best captured locally at the point where services are delivered. This means greater local autonomy and discretion,particularly in resource allocation.

The current system of education financing allows little room for autonomy. Schools have no discretion over funds that arrive tied to rigid norms determined by Central and state governments. This also results in a mismatch between school needs and funds received. For example,a school with 1000 students receives just about two and a half times more money than a school that with 100. And if a school wants to spend more on teacher materials than painting walls,the norms simply won’t allow it.

Autonomy apart,accountability also requires transparency and predictability in fund flows. After all,you need to know how much money is due and when it will arrive in order to make plans and hold the system to account. This is one of SSA’s greatest weaknesses. Between October and December 2009,an army of 25,000 Indian citizens joined ASER to ask over 12,000 schools how much money arrived,when it arrived and how much was spent. The survey found that by October — halfway through the financial year — more than 50 per cent of the schools surveyed reported not receiving SSA funds. These findings are also reflected in macro level data: 63 per cent of SSA funds in 2008-09 were spent in the second half of the financial year.

Delays have many reasons. Delays in releases from the state governments,delays in process as the funds travel through the different administrative layers. And often they are a result of administrative lethargy. For instance,in some schools in Sehore,Madhya Pradesh,funds had not reached till mid-November. Reason? The state government was converting to an electronic system — so that funds could be transferred at the click of a button and delays avoided. A noble cause,but one which took an inordinate amount of time to implement because local banks could manage only 4-digit electronic transfers and this particular transfer required 10 digits.

Whatever the cause,delays proliferate because of the lack of transparency in the system. ASER data indicates that in many schools even the headmaster is not aware of the different grant components,when they should arrive and what they ought to be spent on. In the absence of information,schools,parents and children are disempowered as they lack the tools to make plans and demand accountability for delayed and unpredictable fund flows.

Resolving these problems and ensuring accountability requires systemic reforms in the way educational delivery systems are designed. Crucially,the system will need to ensure genuine local autonomy. One way of doing this is to move away from “tied”,norm-based funding to the provision of block grants calculated on the basis of the number of children enrolled and attending schools. Local autonomy must be accompanied with a process for collection and dissemination of real time information on fund flows and expenditures. This will ensure greater transparency and accountability.

Education policy in India today is at a crossroads. There is a clear consensus that improved education holds the key to India’s future and the passage of the RTE stands testimony to this. Now the focus must shift to getting the design right. Only then can we begin to unstick the “Big Stuck”.

The writer is with the Accountability Initiative at the Centre for Policy Research,Delhi. This article was co-written with Anit Mukherjee,of NIPFP

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