Household Expenditure on Education and Implications for Redefining the Poverty Line in India

8/13/2019 Household Expenditure on Education and Implications for Redefining the Poverty Line in India

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Draft/LimitedDistribution

12May2009

HouseholdExpenditureonEducationand

ImplicationsforRedefiningthePovertyLineinIndia*

JandhyalaBGTilak

Thisshortpaperisconcernedwiththefollowingthreequestions:

1. Whyconsidereducationandexpenditureoneducation,whileredefiningtheofficialpovertyline?

2. Whatisthepresentlevelofhouseholdexpenditureoneducationandwhatdoesareviewofestimatesonhouseholdexpenditureoneducationsuggest?

3. Whatcanbeareasonableestimateonhouseholdexpenditureoneducationthatcanbeusedinredefiningtheofficialpovertyline?

1.Introduction

Povertyisconventionallydefinedintermsofincomepoverty,i.e.,numberof

peoplebelowthepovertylineanditismeasuredindifferentways,predominantlyin

termsofinadequacyofincometoprocureadefinedminimumlevelofcalories. In

Indiatheminimumlevelofcaloriesrequiredperpersonperdayisdefinedas2400in

ruralareasand2100inurbanareas. Thesameisconvertedintofinancialtermsand

thepovertylineisdefinedasaminimumlevelofincomeorexpenditure,whichis

periodicallyupdated. ThelatestupdatedpovertylineisRs.356.30inruralareasand

Rs.538.60inurbanareasin200405(PlanningCommission,2007). Usingthesame

method,povertylineisalsodefinedforvariousstatesandunionterritories

separatelyforruralandurbanareas. Allthepeople,whosemonthlyexpenditure

fallsbelowtheselevels,areconsideredaspoor. Ithastobenotedthatthesodefined

poormaybeincurringexpenditures,notjustonfoodintaketogetminimumnumber

ofcalories,butalsoonseveralotherfoodandnofooditems.

* BackgroundPaper,preparedfortheExpertGroupontheReviewoftheMethodologyfor

EstimationofPoverty(PlanningCommission,May2009).


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Manyscholarshavehighlightedthelimitationsofthisconceptofincome

poverty,whichissolelybasedoncalorieintake,asameasureofthecomplex

phenomenonofpoverty. AnExpertGroupofthePlanningCommission(1993)

recommendedthebroadeningoftheconceptofpoverty,soastoinclude,interalia,

educationneedsofthepeople. AstheWorldBank(1994,p.9)recognised, Poverty

isnotonlyaproblemoflowincomes;rather,itisamultidimensionalproblemthat

includeslowaccesstoopportunitiesfordevelopinghumancapitalandto

education... TheWorldSummitforSocialDevelopment(1995)alsooptedfora

broaderdefinitionofpovertyandcorrespondinglyforabroaderintegratedstrategy

foritseradication. AsUNDP(1996,p.27)commented, incomepoverty isonlya

partofthepicture.Justashumandevelopmentencompassesaspectsoflifemuch

broaderthanincome,sopovertyshouldbeseenashavingmanydimensions and

accordinglydevelopedtheconceptof humanpoverty. Itobserved, humanpoverty

ismorethanincomepoverty:itisadenialofchoicesandopportunitiesforlivinga

tolerablelife (UNDP,1997,p.2). Inthissense,denialofhumanrightsitself

constitutespoverty,andaccordinglyarightsbasedapproachtopovertyeradication

isbeingincreasinglyargued(seee.g.,Speth,1998).

AccordingtoSen(1999,p.87),realpovertycanbesensitivelyidentifiedin

termsofcapabilitydeprivation:deprivationsthatareintrinsicallyimportant,unlike

lowincome,whichisonlyinstrumentallysignificant. Sendistinguishesbetween

incomepovertyandcapabilitypoverty;andarguesthatthelaterisobviouslymore

important. Capabilitypovertyreferstodeprivationofopportunities,andchoices

andofentitlements. Educationcanverysignificantlyinfluencebothincomepoverty

andcapabilitypovertyandalsotherelationshipbetweenthetwo,besides

constitutingitselfapartofcapabilitypoverty. Infact,educationaldeprivationitself

iscapabilitypovertyandinvestingineducationofthepooritselfmeansreductionof

capabilitypoverty.

Inshort,povertyisseenasdeprivationofopportunitiesthatenhancehuman

capabilitiestoleadatolerablelife. Educationisonesuchimportantopportunity,

deprivationofwhichinitselfrepresentspoverty povertyofeducationor

educationpoverty (Tilak,2002b). Povertyofeducationisanintegralpartofhuman

poverty,anditiswidelyarguedthatthisshouldbeanimportantconstituentofany


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meaningfulandcomprehensivedefinitionofpovertyline. Thefeaturesofeducation

povertyincludewidespreadilliteracy,lowlevelsofeducationofthepopulation,

highratesofnonparticipationorlowratesofparticipationofchildreninschooling,

highratesofdropoutandfailures,lowratesofcontinuationinschooling,lowrates

ofachievementandfinallyexclusionofthepoorfromeducation. Accordinglyit

maybeeasytoidentifyandcountthenumberofeducationallypoorpeople,asthose

whoareilliterateandwhoarelesseducatededucatedbelowadefinedlevel. Ifone

weretodefinepovertylineintermsofincomeorexpenditure,itmay,thusbecome

importanttoestimateaminimumlevelofincomerequiredtoobtainaminimum

levelofeducation,definedintermsofbothquantityandquality.

Thescopeofthisshortnoteissomewhatrestricted:itisanattempttopresent

anideaonthenatureandmagnitudeofthehouseholdexpendituresoneducation,

essentiallybasedonpublishedreportsoftheNSS,andtodiscusshowthis

expenditureoneducationhastobeincorporatedintotheofficialpovertyline.

WhyConsiderExpenditureonEducation,whileRedefiningthePovertyLine?

Educationisameritgood,anditisalsoconsideredasapublicgood,

producingahugesetofexternalities. Internationallyeducation,particularlyschool

andmoreparticularlyelementaryeducationisrecognisedasabasicneed. Inthe

frameworkofIndiandevelopmentplanning,itisconsideredasoneoftheimportant

minimumneeds. UnitedNationsandUNESCOresolutionsalsorequireittobe

providedfreebythestatetoallitscitizens. TheConstitutionofIndiahasrecognised

allthisandresolvedin1950,asapartoftheDirectivePrinciples,asfollows:

theStateshallendeavortoprovide,withinaperiodoftenyearsfrom

thecommencementofthisConstitution,forfreeandcompulsory

educationforallchildrenuntiltheycompletetheageoffourteenyears.

(Article45)[emphasisadded].

RecognisingthatwehavenotbeensinceretotheDirectivePrinciple,anamendment

totheConstitutionofIndiawasmadethroughthe86thamendmentin2002thathas

recognisededucationasafundamentalright,accordingthestatustoeducation

whichisalmostequivalenttobasicrightssuchastherighttolive. Accordingtothe


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humandevelopmentandhumanrightsperspectives,educationformsanessential

componentofhumanlivingandthisshouldbeprovideduniversallytoeveryone

withoutanydiscrimination,asanentitlement,andasafundamentalright.

Literatureoneducationdevelopmentrelationshipshasalsohighlightedthe

roleof

education

in

reducing

income

poverty,

in

the

fulfillment

of

other

basic

needs,

inimprovingthequalityoflifeetc.,(Noor,1980;Tilak,1989),inadditiontoitsdirect

impactonlabourproductivityandearningsinthelabourmarket(Schultz,1961;

Becker,1964;Mincer,1972). Importantlythecontributionofeducationto

developmentintermsofexternalitiesitproducesisarguedtobeimmense(seee.g.,

McMahon,1999). Educaitonsignificantlyinfluencespositivelythehealthand

nutritionalstatusofthepopulation,contributestoreductioninfertilityratesandto

improvementinpopulationgrowth,toreductionincrime,etc. Italsohelpsin

eveningoutsomeoftheillsofthesocietysuchaschildlabour,exploitationof

children,childmarriages,etc.,andinsocialisationofthechildrenandintheir

effectivefunctioninginthemodernsocieties. Inshort,educationnotonlyimproves

efficiencyintermsoflabourproductivityandpersonalandsocialdevelopment,itis

alsofoundtobeaneffectiveinstrumentofreductionofpoverty,upwardsocial,

occupationalandeconomicmobility,empowermentofpeople,redistributionof

resourcesandtherebyofimprovementofequityinthesystem,besidesititself

reducinginequalitiesineducation. Alsoasithelpsinfulfillmentofotherbasic

needs,educationmightreduce,ifnotobviate,theneedforpublicspendingon

certainotherbasicneeds.

That(a)educationisameritgoodandalsoapublicgood,(b)itsdirect

contributionandexternalitiesareimmense,(c)householdexpendituresoneducation

wouldrestricttheaccessofthepoortoeducation,(d)despitegrowthinprivate

schooling,thereexistimperfectionsincapitalmarketsandasymmetryin

information,(e)privatemarketsineducationcauseandstrengtheninequalities,and

(f)aboveall,alargenumbersofpeopleareilliterateanddonothaveanyeducation,

manyofthembeingeconomicallypoorallcompelustoconsidereducationasan

importantintegralpartofdevelopmentplanning,includingspecificallyinany

analysisofpoverty.


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However,thedefinitionandmeasurementofpovertyhasbeenincome or

expenditurecentricanditvirtuallypaysnoattentiontoeducation,whichisessential

forhumanbeingstolivewithdignity. Accordingly,thepovertyline,itseems,also

doesnotconsideranyminimumlevelofindividualexpenditurerequiredtoacquire

education. Thisaspectwasnotconsideredimportantintheearly1970s,when

povertylinewasfirstdefined,probablybecausegiventheSocialisticnatureofthe

State,itwasanticipatedthateducationwouldbeprovidedbytheStatecompletely

freeornearlycompletelyfreetoallcitizens,asenvisagedintheDirectivePrinciples

oftheConstitution,andthatnoonewouldhavetoincuranyexpenditureon

acquiringeducation. Infact,foralongtime,itwasfeltthatthegovernmentmeetsthe

wholeexpenditureoneducationinIndia;educationatalllevelsisprovidedfreetoall,

andhouseholdexpenditureoneducation,ifany,isnegligible. Suchaviewprevailed

untilsomeinformationwasmadeavailableontheextentofhouseholdexpenditures.

Though accordingtotheConstitutionofIndia,educationisexpectedtobe

providedfreetoeveryone,studentsandfamiliesarefoundincurringhuge

expendituresonacquiringit. Householdseventhepooresthouseholds arefound

tobefeelingthecompulsiontospendconsiderableamountsoftheirmeagreincome

oneducationintermsoftuitionandotherfees,otherpaymentstoschools,andother

necessaryexpenditureontextbooks,stationery,uniforms,transportetc.(Tilak,1996,

2002c). Availableresearchhasalsoshownthattheneedtospendhugeamountsby

thehouseholdsoneducation,ortoincurthehouseholdcostsoneducation,hasbeen

averyimportantconstraintintheparticipationofthelowincomegroupsin

education(seeTilak,2002a). Thoughthe86thamendmenttotheConstitution

promisestoprovideelementaryeducationfreetoall,giventhechanging

developmentparadigms,thechangingeconomicreformpoliciesandtheoverall

socioeconomicconditions,whereprivateeducationhasbeenexpandingatarapid

rate,manyfeelthatthehouseholdswillhavetocontinuetospendhugeamountson

education. Hencetheneedarisestoconsiderexpenditureoneducationandtohave

arelookattheofficialpovertyline. Thisiswhatattemptedinthefollowingsections.

Section2presentsareviewofavailableestimatesandresearchonhousehold

expenditureoneducationandbasedonthesameinSection3aminimumdesirable

estimateisderivedforconsiderationinredefiningtheofficialpovertyline.


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2.HouseholdExpenditureonEducation:AReviewofAvailableEstimates

Database

Reasonablyreliableandsounddatabaseexistsincaseofpublicexpenditureon

educationin

India.

But

data

on

household

expenditure

are

scarce

and

hence

most

analysesofexpenditureoneducationareusuallyconfinedtothepublicexpenditures

only. Therearetwomaintypesofdatabaseonhouseholdexpendituresoneducation

inIndia. First,theCentralStatisticalOrganisation(CSO)publisheseveryyeardataon

householdexpendituresprivatefinalconsumptionexpenditure oneducation

(andothernonfoodandfooditems)basedonestimatesmadebytheNationalSample

SurveyOrganisation(NSSO)intheNationalAccountsStatistics(NAS). ButtheNAS

doesnotgiveanydetailsregardingthecompositionoftheexpenditureoneducation

byitems,thelevelsofeducation,etc. NAS,however,enablestimeseriescomparisons,

besidesbeingnationalincoverage.

ThesecondimportantsourceisthehouseholdsurveysoftheNationalSample

Survey(NSS). TheseveralroundsoftheNSSonEmploymentandUnemployment

andonHouseholdConsumerExpenditure,regularlycollectandprovidedataon

householdexpenditureoneducation(andothernonfoodandfooditems). These

regularroundsalsodonotprovideanyadditionaldetailsonthelevelsofeducationor

onthecomponentsofeducationexpenditure. Theyareofcourseavailableforrural

andurbanareasseparatelyandalsobyexpenditure(monthlypercapitaexpenditure)

classes. Moreimportantly,theNSSOoccasionallyconductssurveysconcentratingon

education. Onesuchroundwasthe42ndroundconductedin198687.1 Thesurvey

wasrepeatedinthe52ndround(199596).2 Thesesurveysprovidealotofdetailed

informationthathelpsinestimationoftherateofparticipationofpeopleineducation,

andhouseholdexpendituresoneducation,bylevelsofeducation,byitemsof

expenditures,bydifferentcharacteristicsofpopulationcaste,region,genderetc.,and

byhouseholdexpenditureclasses. Anothersimilarsurveywasconductedinthe64th

1 Amongothers,Minhas(1992)andTilak(1996)haveanalysedthe42ndrounddata

extensively.

2 Usingthe52ndrounddata,Tilak(2000,2002a)hasexaminedseveraldimensions

relatingtoeducation.


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roundin200708andtheresultsarenotyetavailable.

Anotherimportantsourceofinformationonhouseholdexpenditureon

educationisthesurveysconductedbyresearchersandresearchorganisations. Many

suchsurveys,particularlyconductedbyindividualresearchersandorganisations,are

samplesurveys

conducted

in

small

regions

or

on

a

smaller

number

of

households

in

thecountry andtheywereconductedinwidercontextsofhumandevelopment,or

inthespecificcontextsofestimationofhouseholdandsocialcostsofeducation,

estimationofratesofreturntoeducation,etc. Afewimportantstatewideandeven

nationwidesamplesurveysconductedincludeexample,Panchamukhi(1990),3

NCAER(1994)4andUNICEF(2007).5

GiventheadvantagesofthenationalsurveysconductedbytheNSSO,we

confineour

attempt

here

to

an

analysis

of

the

data

available

in

NAS

and

the

reports

of

theNSSwhicharebasedonhouseholdsurveys.

PrivateFinalConsumptionExpenditureonEducationinIndia

TheNationalAccountsStatistics(NAS)presentsestimatesonprivatefinal

consumptionexpenditureinthedomesticmarketoneducationincurrentpricesand

alsoinconstantprices. Theyarealsoavailableasaproportionofthetotalprivatefinal

consumptionexpenditure.Theprivatefinalconsumptionexpenditureoneducation

isregardedasthehouseholdexpenditureoneducation.

Accordingtothelatestestimates,householdexpenditureoneducationinIndia

issizeable,Rs.62.7thousandcrorein200708;itincreasedfromRs.59crorein195051

(Table1). Themagnitudeofhouseholdexpendituremaybecontrastedwiththe

3 ThiswasasamplesurveyinMaharashtra,RajasthanandKarnataka,basedupon

whichestimatesweregeneratedontheextentofexpendituresonschooleducationmadebythe

privatesector

households

and

private

school

management

sector

in

various

states

in

India

in198687and198788.

4 NationalsurveyonhumandevelopmentinIndia(HDI),conductedbytheNCAER

wasconfinedtoruralareasinasmanyas16majorstates. Amongothers,Tilak(2002c)usedthe

NCAERdataandexaminedthedeterminantsofhouseholdexpenditureoneducation. Tilak

andSudarshan(2001)havealsoexaminedtheextentofprivateschoolinginIndia,basedonthe

samedatabase.

5 ItisasurveyineightmajorstatesinIndiaaimedatestimatinghouseholdexpenditures

onelementaryeducation. SeeMehrotra(2005)andMehrotraetal(2005).


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governmentexpenditureoneducation,whichwasRs.159thousandcrore(in200708

budgetestimates). Inotherwords,householdexpenditureconstitutesnearly30per

centofthetotal(householdplusgovernment)expenditureoneducationinthecountry

in200708. Householdandgovernmentexpendituresoneducationareintheratioof

about1:2.5. Thehouseholdexpenditureoneducationformed1.4percentofGDPin

200708and2.6percentofthetotalhouseholdexpenditureonallitemsof

consumption.

Therehasbeenaphenomenalgrowthintheexpenditureofthehouseholdson

education. Itincreasedinreal(19992000)pricesby40timesbetween195051and

200708. Inpercapitaterms,theincreasehasbeenby12.7timesduringthesame

period. Asaproportionofthetotalhouseholdexpenditure,theshareofeducation

increasedfrom0.6percentin195051to2.6percentin200708. Thegrowth,

particularlyintermsofpercentageofthetotalexpenditureis,however,notsmooth

overtheyears. Forexample,itgraduallyincreasedto1.5percentby197273,but

duringthelaterperioditwentupanddown,andreachedalevelof1.1in198586;

thereafteritregisteredasteadyincrease. Thesefluctuationsmaybesuggestiveofthe

fluctuationsintotalconsumptionexpenditureandmoreimportantlyinrelative

prioritiesofthehouseholds. However,itisclearthat(a)householdexpenditureon

educationissizeable,and(b)itisincreasingrapidlyovertheyears. Someviewthe

rapidincreaseasarapidincreaseinwillingnesstopayforeducation,whilesomefeel

thatitreflectsthecompulsionthehouseholdsfeeltospendoneducation,asthe

governmentexpenditureoneducationisconsideredinadequate(Tilak,2003).

Tilak(2000)hasanalysedtheNASestimatesonprivatefinalconsumption

expenditureoneducation,incomparisonwiththegovernmentexpenditureon

educationfortheperiodreferringto195051to199697. Ithasbeenalsofoundthatthe

coefficientofelasticity6ofhouseholdexpenditureoneducationtototalincome(infact,

expenditure)ofthehouseholdswaspositive,andgreaterthan1;itis1.5. Itmeansthat

householdexpendituresoneducationaremoreelastictohouseholdincome. Aone

percentincreaseintotalhouseholdincomewouldresultin1.5percentincreasein

householdexpendituresoneducation. Whenthefiguresareconsideredinpercapita

6 Coefficientofelasticityisestimatedbyusingdoublelogregressionequation.


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terms,thecoefficientofelasticitywasmuchhigher: 2.1. Ifhouseholdincomeper

capitaincreasesbyonepercent,expenditureoneducationpercapitaincreasesby2.1

percent.7 Thissuggeststhathouseholdexpendituresoneducationareconsiderably

andpositivelyinfluencedbyhouseholdincome(orexpenditure)levels.

Secondly,the

coefficients

of

elasticity

also

suggested

that

households

respond

positivelytogovernmentexpenditureoneducation. Ifgovernmentexpenditureon

educationincreases,householdswouldalsobewillingtoincreasetheirexpenditureon

education. Butthecoefficientwaslesselastic,i.e.,theincreaseinthehousehold

expendituresoneducation(totalorpercapita)wouldbelessthanproportionatetothe

increaseinthegovernmentexpenditureoneducation(totalorpercapita).

Nevertheless,itisclearthathouseholdssupplementpubliceffortsinspendingon

education.

Itwasfurtherobservedthathouseholdexpenditureoneducationto

governmentexpenditureoneducationwasmoreelasticthantotalhousehold

expendituretototalgovernmentexpenditureonallsectors. Thisreflectsahigher

priorityofthehouseholdsforeducation,comparedtootheritemsofexpenditure.

Thechangesinthecoefficientsofelasticityovertimerevealedthatintermsof

thecoefficientofelasticityofhouseholdexpendituresoneducationpercapitato

householdexpenditurelevels,1960swasthebestperiod,withthehighestcoefficient

ofelasticity;1970swastheworstperiodand1990swasnotmuchbetterthanthe

1970s.

Usingthecompletedatafrom195152to200607,thelatestyearforwhich

dataonhouseholdandgovernmentexpenditureoneducationareavailable(thelater

aregiveninTable2),thecoefficientsofelasticityarenowestimatedagainandwe

findthat(a)householdexpenditureoneducationpercapitaisless(lessthanunity)

elastictochangeingovernmentexpendituresoneducationandontheotherhand,

7 Thehighincomeelasticitycoefficientsmaymeanthateducation,whichisotherwise

consideredanecessitygoodisbecomingaluxurygood. Aluxurygoodisagoodfor

whichdemandincreasesmorethanproportionallyasincomerises,incontrasttoanecessity

good,forwhichdemandincreaseslessthanproportionallyasincomerises. Inotherwords,if

theincomeelasticityislessthanone,thentheconcernedgoodisdefinedasanecessitygood,

andiftheincomeelasticityexceedsunity,i.e.,greaterthanone,thenitisdefinedasaluxury

good.


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governmentexpenditureoneducationismoreelastictochangesinhousehold

expenditure.8

Asalreadynoted,NASdosesnotprovideanyfurtherdetailsonhousehold

expenditureoneducation.

HouseholdExpenditureonEducation

Havingnotedbrieflythelongtermtrendsinprivatefinalconsumption

expenditureoneducation,letusnowlookatthesomeofthelatestroundsofNSSthat

providemoredetailsonhouseholdexpenditureoneducation.

Detailedestimatesseparatelyfor12MPCEclassesfortheyears200506and

200607,basedonthe62ndand63rdroundsofNSSaregiveninTable3. Theyarealso

presentedseparatelyforruralandurbanareas. Alongwiththem,tolookatovertime

changes,thesamefor199596basedonthe52ndroundarealsogiven. Itisclearthatthe

percapitaexpenditureoneducationincurredbythehouseholdsincreasesforeach

expenditureclassovertheyears,andtheincreaseseemstoberapidandhighamong

themiddleandhighexpenditureclasses. Forexample,in199596,thebottom

expenditureclassinruralareasspentRe.0.90percapita,whichincreasedtoRe.1.88

in200506,whichfurtherincreasedmarginallywithinayeartoRe.1.91in200607. In

contrast,theexpenditureofthehighestexpenditureclassincreasedfromRs.27in

199596toRs.73in200506andfurthertoRs.95in200607. Wealsonoteafewmore

consistenttrendsandpatterns: theexpenditureoneducationsystematically

increasesbyincreasinglevelsofMPCE,bothinruralandurbanareas,withoutany

exceptionateachpointoftime. Thirdly,theproportionofthetotalmonthlyper

capitaexpenditurespentoneducationalsoincreasessystematicallywithoutany

exceptionbyincreasinglevelsoftheexpenditureclassthehighereconomicgroup

spendinghigherproportionsoftheirtotalexpendituresandloweconomicgroups

spendingless. Fourthly,theexpenditureinurbanareasisseveraltimesthe

expenditureintheruralareas. In200607,thepercapitamonthlyexpenditureon

educationrangesbetweenlessthanRs.2amongthebottomexpenditureclassinrural

8 Therespectivecoefficients,whicharestatisticallysignificantatonepercentlevel,

are:0.705and1.315.


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areastoRs.425inthetopexpenditureclassinurbanareas. Asapercentofthetotal

monthlypercapitaexpenditurealsoitrangeswidely,betweenbelowonepercent

andabovetenpercent. Theconsistentpatternofincreaseinexpenditureon

educationbothinabsolutetermsandasapercentageoftotalhousehold

expenditure,byincreasingeconomiccategoryofpopulationisstrikinginallcases.

The61stroundreferringto200405providessomeadditionalimportantdetails

oneducation. Dataoneducationwerecollectedfromashortadditionalquestionnaire.

Itprovidesvaluabledataoncurrentattendanceofchildrenineducationalinstitutions,

educationallevelsoftotalpopulationandoftheunorganizedworkers,andalsothe

consumptionexpenditureoneducation.

Rateofattendanceineducationalinstitutionsisavailablebyagegroups,butnot

bylevels

of

education,

as

given

in

Table

4.

One

can

find

some

broad

correspondence

betweentheagegroupsandeducationallevels:mostofthechildrenin514attend

primaryandupperprimarylevelsofeducation;1519attendsecondary/higher

secondaryeducationandthoseintheagegroupof2024canbeexpectedtobe

attendinghighereducationalinstitutions,thoughtherecanbedifferencesatthe

margin. Therateofattendanceinelementaryeducationrisessystemicallyby

increasingeconomicclass,from62percentamongthebottomexpenditureclassto96

percentinthetopexpendituregroupinruralareas(Figure1). Similaristhepatternin

urbanareas. Thedifferencebetweenthetopandthebottomgroupsisthehighestin

caseoftheagegroup2024,i.e.,amongthosewhoattendhighereducation:the

attendancerateis20timeshigherincaseoftherichestgroupcomparedtothebottom

groupinruralareas,andthedifferenceisby17timesinurbanareas.

Theinequalitiesinattendanceratesfinallygettranslatedintothestocksof

educatedpopulation,andwefindasimilarpattern,asshowninTable5. The

educationallevelsofpopulationcanbesummedupintermsofmeanyearsof

schooling,whichisestimatedhereandgiveninthelastcolumninTable5.9 Further,

meanyearsofschoolingofpopulationandhouseholdexpenditureoneducationper

capitaarecloselyrelated,bothmovinginthesamedirection,i.e.,bothincrease

9 Themeanyearsofschoolingofpopulationisestimatedbyusingyearsofdurationof

eachlevelofeducationastheweights. SeeTilak(1999)forearlierestimates.


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systematicallybyincreasingclassesofmonthlypercapitaexpenditure,asshownin

Figure2a&b.

Senguptaetal(2008)haveanalysedtheexpenditureoneducationandalso

educationallevelsofpopulationbyexpenditureclasses,andthechangesinthesame

between1999

2000

and

2004

05,

based

on

the

55th

and

the

61st

round

surveys

of

the

NSS

onEmploymentUnemployment(Table6). Theyclassifiedthepopulationintosix

categories:extremelypoor,poor,marginal,vulnerable,middleandhighincome

groups. Theextremelypoorandthepoortogetherconstitutethepooraccordingto

theconventionaldefinitionofthepovertyline. Between19992000and200405,the

monthlypercapitaexpenditureoneducationhasincreasedfromRs.15toRs.33forall

groupsofpopulationinthecountry. Eventheexpenditureofthepoorwasnearly

doubledfromRs.3.45toRs.6.10. In200405itworksouttobenearlytwopercentofthe

totalconsumptionexpenditureofthepoor,comparedto1.3percentin19992000.

Wehavealreadynotedinterestingrelationshipsbetweenhousehold

expenditureandgovernmentexpenditureoneducation,whenwehaveanalysedthe

coefficientsofelasticity,usingthetimeseriesdataonprivatefinalconsumption

expenditure. However,whenweusestatewisedataonpercapitagovernmentand

householdexpenditureoneducationin200607in20states(giveninTables7and8),

wefindthatbotharelesselastictoeachother.10

Lookingatthecoefficientsinbothcases,i.e.,basedontimeseriesdataand

crosssectiondata,itcanbestated,subjecttotheirlevelofstatisticalsignificance,that

householdexpenditureandgovernmentexpendituredonotsubstituteeachother;

theycomplementeachother. Increaseinthegovernmentexpendituremight

stimulatehouseholdstospendmoreoneducation.

HouseholdExpenditurebyLevelofEducation

Theaboveestimatesrefertoalllevelsofeducationasanaggregate. Itmaybe

10 Thecoefficientsofelasticityofgovernmentexpendituretochangesinhousehold

expenditureoneducationareasfollows:0.249(tvalue:2.42)(ruralareas);0.656(tvalue:2.76)

(urbanareas);and0.309(tvalue:1.87)(ruralandurbancombined). Householdexpenditure

ismarginallymore(butlessthanunity)elastictochangesingovernmentexpenditureon

education. Therespectivecoefficientsare:0.99(tvalue:2.49)inruralareas;0.45(tvalue:

2.76)inurbanareas;and0.53(tvalue:1.87)(ruralandurbancombined).


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importanttoexaminetheexpenditurebylevelofeducation. Butonlythespecial

roundslikethe52ndandthe64throundsofNSSprovidedataonhousehold

expenditureoneducationbylevels. The52ndroundreferringto199596isstillthe

latestone,asthedataontheothersurveyarenotyetavailable. Theestimates,based

onthespecialsurveyofthe52ndround(ReportNo.439),whichareusedhere,refer

toaveragehouseholdexpenditureoneducationperstudentperannumin200405.

Letusexaminethesame.

AcloseexaminationoftheavailableestimatesgiveninTable9reveals

severalimportantfeatures,someofwhichmaybeunderscoredhere. Householdsin

everyquintileincurhugeexpenditureoneducationoftheirchildren,bothinruraland

urbanareas. Itismostgenerallyfeltthatrichhouseholdsspendmoreoneducation

thanlowincomehouseholds. Thisisfoundtobetrueateverylevelofeducation,and

italsoholdsbetweeneverytwosuccessiveexpendituregroups. Averagehousehold

expenditureofthetopexpendituregrouponeducationis6.1timestheexpenditureof

thebottomquintile. Infact,wenoticeasmoothupwardincreasingexpenditurecurve

ofthedifferentexpenditurequintilesateverylevelofeducation. Thereisalsono

intersectionofcurvesbetweenlevelsofeducationandthequintilesinFigure3.

HouseholdsonaveragespendanamountofRs.904perstudentonalllevels

ofeducationonaverage. WhilethecorrespondingfigureisRs.370inruralareas,it

isnearlythreetimeshigherinurbanareas. Inbothruralandurbanareas,asnoted

earlier,thelevelofhouseholdexpenditurerisesastheeducationallevelrises. It

increasesfromRs.218forthebottomquintileinruralareastoRs.1114forthetop

quintile. InurbanareasitrisesfromRs.480toRs.3447seventimeshigherbetween

thebottomandrichestquintiles,comparedtofivetimesdifferenceinruralareas.

Thedifferencesbylevelsofeducationaremorestriking. Onaverage,a

householdhastospendRs.501perchildperannumforprimaryeducation.Ifthechild

goestomiddleorupperprimaryeducation,itincreasestoRs.901;itfurtherincreases

toRs.1577insecondary11schoolsandRs.2923inhighereducation.12 Thesefigures

11 Secondaryeducation/schoolsincludeseniorsecondarylevelaswell.

12 Highereducationherereferstowhatisdescribedasabovehighersecondarylevel

intheNSSO(1998).


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14

referto199596. Aquickcomparisonwiththeearliersetofestimatesshowsthatthere

hasbeenasteepincreaseinthelevelsofhouseholdexpendituresbetween198687and

199596.Theexpenditureonprimaryeducationperstudentin198687variedbetween

Rs.84ingovernmentschoolsinruralareasandRs.569inprivateschoolsinurbanareas

(Tilak,1996).13

Ruralurbandifferencesinhouseholdexpendituresarestriking. Ahousehold

inurbanareashastospendnearlyfourtimestheexpenditurethataruralhousehold

spendsontheprimaryeducationofitschild. Interestingly,thedifferencesgradually

declinebyincreasinglevelsofeducation. Highereducationinurbanareascosts1.4

timesthecostofhighereducationinruralareas.

Interestingly,alltypesofinequalitiesinhouseholdexpenditureoneducation

by

gender,

rural

urban,

inequalities

by

household

expenditure

quintiles,

and

even

bytypeofeducationarethehighestinprimaryeducationandtheleastinhigher

education. Doesthismeanthatprimaryeducationofthekindandformbeing

offeredbyseveraltypesofschoolsinthecountry,tendstoaccentuateinequalities,

andontheotherhand,isithighereducationthatmayprovidecohesivenessbridging

gapsbetweendifferentgroupsofpopulation? Whilethismayrequiremoreindepth

probing,thisseemstoatleasttentativelytrue.

Contraryto

the

widely

held

belief

that

primary

and

upper

primary

education

ingovernment,localbodyschoolsandevengovernmentaidedschoolsisprovided

ratherfreeandthathouseholdsdonothavetospendanysignificantamounts,ithas

beenfoundthateveningovernmentschools,childrenincurhugeexpenditures.

However,thehouseholdexpenditureoneducationingovernmentschoolsisthe

lowest,followedbylocalbodyschools,whichinturnwasfollowedbygovernment

aidedschools. Thecorrespondingfiguresarethehighestincaseofprivateschools.

WhatisinterestingtonoteinTable10isthatthisistrueincaseofalllevelsof

education,withnoexceptionatall. Thedifferencebetweentheprivateschoolsandthe

governmentschoolsisashighas5.5timesinprimaryschools,andthedifference

comesdowngraduallyto2.1inhighereducation.

13 Thesefiguresarebasedonthe42ndroundoftheNationalSampleSurvey,conducted

in198687.


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15

Thedifferencesbetweenseveraltypesofprimaryschoolsarevast,comparedto

differencesinhigherlevelsofeducation. Asaresult,richhouseholdsspendamuch

higherlevelofexpenditureinprimaryeducationthanpoorhouseholds,butwhenit

comestohighereducation,sincedifferencesbetweencollegesaremarginal,the

differencesinhouseholdexpendituresarealsomarginal;eventherichhouseholdsdo

notfeeltheneedtospendsignificantlyhigheramountsontheirchildrenthanwhat

poorhouseholdsdo.

Oftheseveralitemsofexpenditureofthehouseholdsoneducation,feesforms

thesinglemostimportantitematanylevelofeducation,asshowninTable11. Fee

includestuitionfee,examinationfeesandotherfeesandotherpayments. Though

tuitionfeeissizeable,otherfeesarenotinsignificant. Eveninprimaryeducation,20

percentoftheexpenditureofthehouseholdsoneducationgoesintheformoftuition

fees,andanothertenpercentintheformofotherfees. Incaseofhighereducation,

thetuitionfeeforms25percentandotherfees16percent. Onthewhole,alltypesof

feesforms30percentofthehouseholdexpenditureoneducationinprimary

education,23percentinmiddleandsecondaryeducationand41percentinhigher

education. Soneitherprimaryeducationnoranyotherlevelofeducationisevenfee

free;itisnoteventuitionfeefree.

Thesecondmostimportantitem,afterfees,isbooksandstationery. One

fourthtonearly30percentofthetotalisaccountedbybooksandstationery. Thisis

importantevenincaseofprimaryeducation,wheretextbooksandstationeryare

providedfreetochildren. Thismaybebecausetheprovisionbythegovernment

couldbehighlyinadequate. Inelementaryeducationthethirdimportantitemis

uniforms,whichisalsosaidtobeprovidedbythegovernmentfreetomany,ifnotall

children. Privatecoachingisfoundtobeimportantonlyincaseofsecondary

education,andnotnecessarilyinotherlevelsofeducation,thoughthephenomenon

doesexistincaseofalllevelsofeducation. Onaverage14percentofchildreninrural

areasand18percentinurbanareasinalllevelsofeducationtogether,takeprivate

coaching. Highproportionofstudentsgoingforprivatecoachingobviouslyreflects

thepoorqualityofeducationandoftheinstructionalprocessofferedinschools,

whethertheyaregovernmentorprivateschools.

Figure4givesthedistributionofexpenditureoneducationbydifferentitems


16/39

16

foralllevelsofeducationtakentogetheronaverage. Unfortunatelythesedataarenot

availableinthepublishedreportsbytypeofschool,i.e.,theavailableinformationdoes

nothelpustoknowtheextentofsayexpenditureonfeesingovernmentprimary

schoolsvisvisothertypesofschools. Suchinformationisavailablebytypeof

schoolandnotatthesametimebylevelofeducation. Consideringalllevelsof

educationtogether,itcanbenotedinTable12thatitisnotonlyfees,butalso

expenditureoneveryitemofexpenditureishigheringovernmentaidedschoolsthan

ingovernmentandlocalbodyschools,andisthehighestintheprivateschools. The

exceptionsareveryfew. Expenditureonprivatecoaching,andalsoonbooksand

stationeryishigherincaseofchildrenattendinggovernmentaidedschoolsthanthe

otherschools. Further,excepttransportandtosomeextentprivatecoachinginrural

areas,amajorityofthestudentshavetospendonallotheritems,includingfees,

books,stationery,uniformsandotherexpenses,andtheyhavetospend,not

insignificant,butconsiderableamounts.

3.HouseholdExpenditureonEducationforConsiderationforReEstimationof

thePovertyLine

Whatconstitutesaminimdesirablelevelofexpenditureoneducationthat

needstobeconsideredinredefiningthepovertylineisadifficultexerciseand

involvescrucialchoices. Thesimplewayistoconsidertheactualexpenditure

incurredbythepoor oneducationandaddittothepresentpovertyline. Butthe

currentlevelofexpenditureincurredbythepoormaynotconstituteadesirable

minimumlevel.Itmaynotbeadequateformeaningfuleducation,asthepoormay

beunderspendingspendinglessthanrequired,andasaresult,thiswouldaffect

theirparticipation,continuation,andtheirattainmentofaminimumlevelof

learninginschools,andtheirtransitiontothenextlevelofeducation. Asthe

currentlevel

may

not

be

adequate

for

a

minimum

desirable

level

of

education

of

acceptablequality,anormativeestimatehastobemadeasaminimumhousehold

costofeducationforthepoortoacquireagivenlevelofeducation. Butestimation

ofaminimumdesirablenormativeestimateisindeeddifficult. Itcannotbutbe

arbitrary. Inall,therearefouralternatives,includingthecurrentlevelofspending

ofthepoor,viz.,


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17

a) Amountofexpenditurecurrentlyincurredbythepoorb) Maximumlevelofexpenditureincurredbythehouseholds,whichis

generallytheoneincurredbythetopexpenditure/incomegroup.

c) Expenditureincurredbythemedianhouseholds,andd) Expenditureincurredbytheaverageofallthehouseholds.

Wehavealreadynotedthat(a)maynotberight. While(b)mayensurequality

educationtothepoor,comparabletowhattherichestget,thisisalsonotproper,as

somepartoftheexpendituretherichincurcouldbespurious:therichhouseholds

spend,simplybecausetheyhavemoney,thoughitisnotnecessary,andalsobecause

weareconsideringtheminimumamountrequiredtoobtainaminimumlevelof

educationwithquality,andnotwhattherichestspend. Soofthefouralternatives,

weareleftwith(c)and(d). While(c)maybegood,14(d)maybepreferredto(c),as

afterall,itisanaverageofalltheeconomicgroups,includingtherichest,anaverage,

thatmayevenoutdifferencesbetweenthepoorandtherichandmayenablethe

poortogetmeaningfulandqualityeducation.

Withregardtoanaverageestimate,essentiallytwoalternativesetsof

estimatesareavailableonhouseholdexpenditureoneducation. Theyareestimates

i) basedonthe63rdroundofNSS(200607)(ReportNo.527);alsothosebasedonthe61stroundofNSS(200405),and

ii) basedonthe52ndroundofNSS(199596)(ReportNo.439)Asalreadynoted,theNSSReportNo.439providesdetailedestimatesof

householdexpenditureoneducationbylevelsofeducation,andbyhousehold

expenditurequintilegroups;buttheyaredated,astheyreferto199596. Databased

onasimilarsurveyconductedin200708arenotyetavailable. Theseveralrounds

ofConsumption

Expenditure

Surveys

of

NSS

do

provide

similar

data,

the

latest

one

beingthe63rdround. ButtheEmploymentUnemploymentandtheSocial

ConsumptionExpendituresurveysprovideaggregatedataonhousehold

expenditureoneducation,notdisaggregatedbylevels,butdisaggregatedby

monthlypercapitaexpendituregroupsandtheyarealsoavailableforruraland

14 DevandRavi(2008)suggestthesame.


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18

urbanregionsseparately. The61stroundofNSSprovidesafewmoreadditional

detailsonhouseholdexpenditureoneducation,buttheyreferto200405. Allthe

threeavailablefiguresareupdatedto200708levelbyusingGDPdeflatorsandthey

aregiveninTable13.

Nowthe

important

question

is

expenditure

incurred

on

which

level

of

educationhastobeconsideredforthepurposeonhand: (a)expenditureincurredon

elementaryeducationor(b)expenditureincurredonalllevelsofeducation

(average)? TheDirectivePrincipleintheConstitutionofIndiareferstofree

educationuptotheendofelementarylevel(uptoGradeVIII). TheConstitutional

provisionofthefundamentalrightalsoreferstothesame. Hencetheremaybesome

justificationtoincludetheexpenditureincurredonlyonelementaryeducation.

Butthere

can

be

two

arguments

on

why

better

the

expenditure

on

all

levels

is

considered. Itisgenerallystatedthatmereelementaryeducationmaytakepeople

abovethe(income)povertyline,butonlyjustabovethepovertyline. Thereisa

continuousdangerofthepeoplewhoarejusteducateduptoelementarylevel,tofall

backinto(income)povertyatanytimeandalsotoilliteracy. Secondly,wealsonote

thateventhepoorincomegroups(thebottomincome/expenditurequintilewhoare

belowthepovertyline),participateinotherlevelsincludingspecificallyhigher

education,thoughtheratesareverysmall,andalsospendonotherlevelsof

education,includinghigherlevels. Theminimumlevelcannotbebelowthecurrent

level. Henceitmayberighttoconsider(b),insteadof(a). Practicallysinceweare

takingweightedaverages,giventherelativehighweighttheelementaryeducation

hasinthedistributionofenrolments,theaveragesdonotshowmuchdifference

whetherweconsiderjustelementaryeducationoralllevelsofeducation,aswenote

inTable13.

Once,wedecidetoconsideraverageexpenditureofallthehouseholdsonall

levelsofeducationonaverage,therearetwoalternativeestimatesavailable,one

basedonthe63rdroundofNSSfor200607(alternative1), andanotherbasedon

52ndroundspecialreportoneducation(alternative2),bothupdatedto200708level.

Theyareasfollows:


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19

MonthlyPerCapitaExpenditureonEducation(Rs.),

200708,thatmaybeconsideredforRedefiningthe

PovertyLine

Rural Urban

Alternative1 23.24 96.07

Alternative2 49.33 133.80

Note:Alternative1isbasedonNSSO(2008b)

Alternative2isbasedonNSSO(1998b)

SeethenoteinTable13.

Though,itmaybedesirabletoconsidertheupperestimate,alternative1maybe

preferredtotheother,asitisbasedonmorerecentdata,updatedforoneyearfor

priceincrease. Thusthemonthlypercapitaexpenditureoneducationthatneedsto

beconsideredinredefiningtheincome/expenditurepovertyline,worksouttobe

Rs.23.24inruralareasandRs.96.07inurbanareas.

Statewiseestimatesofmonthlypercapitaexpenditureoneducationbased

onNSSO(2008b)whichcanbeconsideredforredefiningthestatewisepovertyline

aregiveninTable14.Theyareactualexpenditurefiguresbyallgroupsof

populationoneducationin200607,updatedto200708levelusingGSDPdeflators.


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20

Figure1

0

25

50

75

100

0-235/0-335

235-270/335-395

270-320/395-485

320-365/485-580

365-410/580-675

410-455/675-790

455-510/790-930

510-580/930-1100

580-690/1100-1380

690-890/1380-1880

890-1155/1880-2540

1155&more/2540&above

Rural/Urban MPCE Class

Rates of Attendance in Educational Institutions by Age Group and MPCE

Class, 2004-05

R 5-14 R 15-19

R 20-24 U 5-14

U 15-19 U 20-24

Source:BasedonNSSO(2006).


21/39

21

Figure2a

0

2

4

6

8

10

12

14

0

20

40

60

80

0-235

235

-270

270

-320

320

-365

365

-410

410

-455

455

-510

510

-580

580

-690

690

-890

890-1155

1155&m

ore

MeanYearsofSchooling

r = 0.934

Monthly

PerCapitaExpenditureonEducation(Rs.)

MPCE Class

Household Expenditure on Education and Mean Years of Schooling, 2004-05

Rural India

Household Expenditure on Education

Mean Years of Schooling

Figure2b

0

5

10

15

20

25

0

100

200

300

400

0-3

35

335-3

95

395-4

85

485-5

80

580-6

75

675-7

90

790-9

30

930-11

00

1100-13

80

1380-18

80

1880-25

40

2540&more

MeanYearsofSchooling

r = 0.837

MonthlyPercapitaExpenditureonEducation(Rs.)

MPCE Class

Household Expenditure on Education and Mean Years of Schooling, 2004-05

Urban India

Household Expenditure on Education

Mean Years of Schooling



22/39

22

Figure3

0

500

1000

1500

2000

2500

3000

3500

4000

0-20 20-40 40-60 60-80 80-100

Rs.

Housheold Expenditure Quintiles

Household Expenditure on Education per Student (Rs.), 1995-96by Housheold Expenditure Quintiles

Primary Middle

Secondary Higher

Source:BasedonNSSO(1998b).


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23

Figure4

Items of Household Expenditure on Primary Education

Tuition fee

20%

Exam fee

2%

Other Fees

8%

Books

13%

Stationary

13%

Uniform

23%

Transport

6%

Private coaching

10%

Other expenses

5%

Source:BasedonNSSO(1998b).


24/39

24

Table1

PrivateFinalConsumptionExpenditureonEducation(in19992000prices)

Rsperannum

Rs

crore

%of

Total

Rs.per

capita

Rs

crore

%of

Total

Rs.per

capita

195051 1240 0.60 34.54 198081 8196 1.46 120.71

195152

1330

0.60

36.44 1981

82

8097 1.39

117.01

195253 1406 0.61 37.80 198283 8249 1.40 116.51

195354 1511 0.62 39.87 198384 8196 1.25 113.36

195455 1630 0.65 42.23 198485 8331 1.28 112.73

195556 1758 0.69 44.73 198586 7722 1.13 102.28

195657 1867 0.70 46.56 198687 9394 1.34 121.84

195758 1977 0.76 48.34 198788 10320 1.43 130.96

195859 2133 0.75 51.03 198889 10977 1.43 136.36

195960 2300 0.80 53.99 198990 12378 1.54 150.58

196061 2490 0.82 57.37 199091 13976 1.66 166.58

196162 2732 0.89 61.53 199192 13976 1.62 163.27

196263

3112

1.00

68.55 1992

93

14071 1.60

161.36196364 3407 1.05 73.43 199394 14721 1.60 165.03

196465 3654 1.06 77.09 199495 14943 1.55 164.21

196566 4001 1.16 82.49 199596 16193 1.59 174.49

196667 4305 1.24 86.97 199697 17533 1.60 185.34

196768 4609 1.25 91.09 199798 19730 1.76 204.67

196869 5141 1.36 99.25 199899 21304 1.79 216.72

196970 5544 1.42 104.80 199900 23781 1.89 237.57

197071 5706 1.41 105.47 200001 26190 2.01 257.02

197172 5982 1.45 107.98 200102 28632 2.08 275.31

197273 6267 1.52 110.53 220203 31398 2.22 297.33

197374 6314 1.48 108.86 200304 34522 2.30 322.03

197475 6942 1.63 117.07 200405 37939 2.39 348.38

197576 7113 1.58 117.18 200506 41821 2.47 378.13

197677 7193 1.57 116.02 200607 45608 2.53 406.49

197778 7222 1.46 113.91 200708 49733 2.55 437.02

197879 7365 1.40 113.66

197980 8020 1.56 120.78

Source:BasedonCSO(2008and2009) [www.mospi.nic.in]


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25

Table2

GovernmentExpenditureonEducationperCapita

(Rs.in19992000prices)

Rs Rs Rs

195152 41.30 197071 197.24 198990 515.67

195253 47.37 197172 205.95 199091 520.61

195354 49.90 197273 215.83 199192 490.14

195455 65.06 197374 202.19 199293 494.35

195556 79.21 197475 211.38 199394 496.72

195657 77.58 197576 247.29 199495 509.57

195758 83.79 197677 257.84 199596 539.02

195859 91.21 197778 273.48 199697 559.10

195960 104.23 197879 299.14 199798 570.55

196061 115.89 197980 284.56 199899 655.93

196162 120.54 198081 277.30 199900 750.75

196263 121.24 198182 283.43 200001 787.46

196364 124.44 198283 328.82 200102 727.25

196465 131.25 198384 337.53 220203 735.36

196566 138.09 198485 361.42 200304 732.41

196667 135.63 198586 389.97 200405 741.21

196768 147.44 198687 387.75 200506 825.34

196869 157.60 198788 430.23 200607 942.23

196970 176.53 198889 464.30

Source: BasedonMHRD(aandb).


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26

Table3

MonthlyPerCapitaConsumptionExpenditureonEducationbyhouseholds,byMPCE

class(199596,200506,200607

Rural Urban

MPCEClassRs.

%ofTotal

ExpenditureMPCEClass Rs

%ofTotal

Expenditure

199596

0120 0.90 0.86 0160 1.33 0.96

120140 1.11 0.85 160190 2.41 1.36

140165 1.38 0.89 190230 2.99 1.41

165190 1.09 0.61 230265 4.27 1.73

190210 2.35 1.17 265310 6.46 2.24

210235 2.94 1.32 310355 9.30 2.80

235265 3.16 1.27 355410 12.25 3.21

265300 5.01 1.77 410490 17.36 3.87

300355 5.75 1.76 490605 23.52 4.32

355455 9.90 2.48 605825 39.53 5.62

455560 14.38 2.87 8251055 61.77 6.79

560&above 26.86 3.10 1055&above 160.43 8.85

All 7.45 2.16 All 34.48 5.75

200506

0235 1.88 0.96 0335 3.95 1.40

235270 2.95 1.15 335395 8.59 2.33

270320 2.94 0.99 395485 10.52 2.37

320365 5.23 1.52 485580 13.56 2.59

365410 6.26 1.62 580675 22.58 3.60

410455 7.63 1.76 675790 27.39 3.74

455510 8.62 1.79 790930 34.46 4.01

510580 12.09 2.23 9301100 47.95 4.75

580690

16.51

2.62 1100

1380 75.87 6.19

690890 22.11 2.85 13801880 106.44 6.66

8901155 34.83 3.47 18802540 160.77 7.46

1155&more 73.45 4.21 2540&more 370.99 9.41

All 16.98 2.72 All 72.85 6.22

200607

0235 1.91 0.97 0335 5.27 1.84

235270 2.14 0.84 335395 6.35 1.73

270320 2.98 1.01 395485 11.39 2.57

320365 5.32 1.55 485580 13.21 2.46

365410 6.07 1.57 580675 21.68 3.45

410455 7.19 1.66 675790 26.58 3.62

455510 8.70 1.81 790930 38.02 4.42510580 11.03 2.03 9301100 48.73 4.82

580690 15.74 2.49 11001380 68.44 5.56

690890 24.54 3.15 13801880 110.25 6.89

8901155 33.70 3.36 18802540 182.02 8.43

1155&more 95.17 5.41 2540&more 424.68 10.44

All 22.16 3.19 All 91.60 6.98

Source:BasedonNSSO(1998a,2008a,b)


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27

Table4

PercentageRateofAttendanceinEducationalInstitutions,200405

Rural Urban

MPCEClassAgeGroup

MPCEClassAgeGroup

514 1519 2024 514 1519 2024

0235 61.7 22.8 1.6 0335 68.3 28.9 3.6

235270 69.3 20.7 1.5 335395 72.4 30.2 2.7

270320 72.4 25.6 1.9 395485 79.9 34.6 4.5

320365 73.4 27.1 3.0 485580 88.2 42.5 5.2

365410 78.5 30.9 3.2 580675 89.2 47.0 9.6

410455 80.4 34.2 5.7 675790 90.3 53.3 14.0

455510 82.4 37.6 4.1 790930 94.6 60.9 14.8

510580 85.1 40.9 7.1 9301100 96.8 69.9 20.4

580690 89.0 48.0 8.1 11001380 98.1 79.6 26.8

690890 91.9 54.5 12.8 13801880 98.9 82.1 37.5

8901155 94.4 62.0 16.5 18802540 98.5 87.3 38.9

1155&more 95.9 71.2 32.0 2540&more 98.0 93.2 61.9

All 80.3 40.7 7.9 All 88.5 58.3 20.0

Source:BasedonNSSO(2006)


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28

Table5

DistributionofPopulationbyEducationalLevelandbyMPCEClass,200405

MPCEClass

Not

literate

Literate&

Upto

Primary

Middle

Secondary

Higher

Secondary

Diploma

Graduate

&above

Total

Mean

Yearsof

Schooling

Rural

0235 69.2 18.4 8.5 2.5 0.7 0.1 0.3 100 3.018

235270 64.8 22.7 9.2 2.3 0.5 0.3 0.3 100 3.386

270320 60.9 22.8 10.1 3.8 1.7 0.1 0.5 100 3.982

320365 58.1 22.5 12.4 4.4 1.7 0.1 0.6 100 4.372

365410 52.7 25.6 13.0 5.4 2.2 0.1 1.0 100 5.022

410455 50.9 24.3 14.0 6.0 2.9 0.3 1.4 100 5.425

455510 47.7 25.8 15.2 6.6 3.0 0.3 1.4 100 5.798

510580 42.9 25.2 16.8 8.6 4.0 0.4 2.0 100 6.635

580690 38.5 25.0 17.9 10.4 4.9 0.7 2.7 100 7.452

690

890

33.2

23.8

19.1 12.4 6.4 1.1 3.8

100

8.4758901155 26.7 22.0 18.9 15.3 8.3 2.4 6.3 100 10.026

1155&more 17.6 18.9 17.8 16.6 12.3 4.7 12.1 100 12.535

All 45.2 23.8 15.2 8.2 4.1 0.7 2.5 100 6.472

Urban

0335 50.5 27.3 12.9 5.5 1.9 0.5 1.3 100 5.246

335395 44.5 27.1 15.9 7.6 3.0 0.3 1.5 100 6.163

395485 39.0 28.0 18.1 9.0 3.6 0.6 1.8 100 6.979

485580 31.4 28.2 19.6 11.7 4.7 0.7 3.6 100 8.286

580675 26.9 25.6 21.7 13.0 6.4 1.7 4.6 100 9.349

675790 19.9 25.2 22.4 15.4 8.3 1.9 6.9 100 10.760

790930 16.6 20.9 22.3 17.9 10.9 2.3 9.1 100 11.956

9301100 13.4 19.2 21.4 18.4 12.2 2.9 12.5 100 13.007

11001380 9.2 14.5 18.9 20.9 15.3 3.7 17.5 100 14.737

13801880 6.1 11.7 15.0 19.2 17.7 4.9 25.4 100 16.420

18802540 4.3 7.9 11.1 18.8 16.8 4.7 36.4 100 18.083

2540&more 1.8 5.1 6.4 13.6 16.1 5.3 51.6 100 20.191

All 19.6 20.0 18.2 15.3 10.4 2.6 14.0 100 12.130



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29

Table6

MonthlyPercapitaExpenditureonEducation(Rs.)

19992000 200405

Rs

%ofTotal

Expenditure Rs.

%ofTotal

Expenditure

ExtremelyPoorandPoor 3.45 1.3 6.10 1.9

Marginal&Vulnerable 9.78 2.1 17.05 3.1

Poor&Vulnerable(abovetwo) 7.64 1.9 14.07 2.9

Middle&HighIncomeGroup 44.73 4.1 97.16 7.0

All 14.95 2.8 32.67 4.7

Source:BasedonSenguptaetal(2008),Tables14and17

(BasedonNSS55thand61stroundsofEmploymentUnemploymentSurveys)


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Table7

MonthlyAverageperCapitaExpenditureonEducation,200607

Rural Urban

Rs

%ofTotal

Expenditure Rs

%ofTotal

Expenditure

AndhraPradesh 21.88 3.01 109.04 8.01

ArunachalPradesh 19.28 2.10 .. ..

Assam 30.5 4.23 75.01 5.48

Bihar 11.1 2.05 51.15 5.91

Chhattisgarh 7.62 1.44 80.61 7.69

Delhi .. .. 143.78 7.97

Gujarat 14.91 1.87 74.12 5.21

Haryana 74.67 7.37 146.6 10.97

HimachalPradesh 43.52 37.04 123.01 7.10

Jammu&Kashmir 48.66 5.00 102.65 7.99

Jharkhand 16.99 3.07 83.47 7.46

Karnataka 18.47 2.96 64.15 5.44

Kerala 50.42 4.03 83.88 4.99

MadhyaPradesh 8.52 1.65 69.21 6.91

Maharashtra 16.09 2.07 121.57 7.26

Mizoram .. .. 74.8 4.78

Manipur 49.73 6.24 .. ..

Meghalaya 29.82 3.85 .. ..

Orissa 9.3 2.03 65.66 6.12

Punjab 60.52 5.05 135.45 8.42

Rajasthan 21.38 2.79 83.95 7.09

TamilNadu 26.74 3.67 75.41 6.14

Tripura 20.6 3.57 78.68 6.72

UttarPradesh 22.07 3.38 71.87 7.21Uttaranchal .. .. 98.82 8.56

WestBengal 22.23 3.53 88.6 6.46

NEStates 35.09 4.44 84.21 6.36

UnionTerritories 38.12 3.41 237.93 12.05

AllIndia 22.16 3.19 91.6 6.98

Source:BasedonNSSO(2008)


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31

Table8

AveragepercapitaExpenditureonEducationperannum,200607

HouseholdExpenditure

Government

Expenditure

percapita

Rural Urban

WtAv

R+U* 200506

AndhraPradesh 262.56 1308.48 675.63 868.66

Assam 366 900.12 480.98 902.99

Bihar 133.2 613.8 316.41 514.75

Chhattisgarh 91.44 967.32 448.59 761.44

Gujarat 178.92 889.44 539.15 893.87

Haryana 896.04 1759.2 1311.12 956.89

HimachalPradesh 522.24 1476.12 729.61 2005.13

Jammu&Kashmir 583.92 1231.8 939.65 802.86

Jharkhand 203.88 1001.64 582.30 642.01

Karnataka 221.64 769.8 475.05 971.36

Kerala 605.04 1006.56 693.82 1222.3

MP 102.24 830.52 506.24 613.26

Maharashtra 193.08 1458.84 977.01 1248.7

Orissa 111.6 787.92 275.53 670.86

Punjab 726.24 1625.4 1224.44 979.59

Rajasthan 256.56 1007.4 293.94 810.24

TamilNadu 320.88 904.92 589.35 912.37

Tripura 247.2 944.16 441.69 1410.82

UttarPradesh 264.84 862.44 558.01 567.88

WestBengal 266.76 1063.2 558.14 691.82

*estimatedusingdistributionofsamplepersonsbetweenruralandurbanareasastheweights.

Source:SameasTable7andMHRD(a,b)


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Table9

HouseholdExpenditureonEducationperstudentperannum199596

Quintiles Primary MiddleSecondary/Hr

Secondary

AboveHr

Secondary

All

Levels

Rural

0020 140 337 687 1334 218

2040

197

435

819

1508

321

4060 239 526 843 1450 406

6080 327 624 1045 1915 573

80100 653 974 1597 2696 1114

All 297 640 1180 2294 570

Urban

0020 347 566 868 1364 480

2040 633 826 1140 1711 816

4060 1000 1122 1430 1964 1192

6080 1540 1619 2008 2403 1774

80100 3060 3291 3919 4370 3647

All

1149

1529

2219

3304

1686

Rural+Urban

0020 197 426 768 1353 300

2040 306 575 961 1645 472

4060 419 726 1096 1810 647

6080 598 900 1424 2220 923

80100 1150 1547 2322 3694 1836

All 501 915 1577 2923 904

Source:NSSO(1998b).


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33

Table10

AverageAnnualHouseholdExpenditure perstudentofage524yearspursuing

generaleducationbylevelofeducationandtypeofinstitutions

Levelof education

TypeofInstitution

AllGovt

Local

body

Private

aided

Private

unaided

Primary 257 338 1181 1424 501

Middle 622 726 1346 2156 915

Secondary/HigherSecondary 1236 1349 1861 3061 1577

Highereducation 2559 2415 3143 5296 2923

All 580 628 1615 1904 904

Source: Tilak(2000),basedonNSSO(1998b).


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34

Table11

HouseholdExpenditureonEducationonvariousitemsperstudentperannum,

199596

Primary Middle

Secondary/

Higher

Secondary

Above

Higher

Secondary

AllLevels

(Average)

Rural

TuitionFee 31 36 73 375 47

Examfee 8 20 61 162 23

Otherfee&payments 21 41 79 252 10

Books 50 134 249 429 111

Stationery 52 112 174 251 91

Uniform 82 170 212 101 125

Transport 11 18 87 395 34

PrivateCoaching 23 71 182 154 64

Otherexpenses 19 38 64 175 34

Total 297 640 1180 2294 570

Urban

TuitionFee 318 316 397 931 389Examfee 21 32 73 181 50


Books 122 195 310 552 222

Stationery 101 157 217 313 161

Uniform 231 306 307 74 255

Transport 93 97 114 325 119



Total 1149 1529 2219 3304 1686

Rural+Urban

TuitionFee 97 123 220 745 149Examfee 11 24 62 171 29


Books 66 152 271 495 137

Stationery 63 128 193 317 110

Uniform 121 227 273 108 171

Transport 30 44 101 353 58



Total 494 933 1619 2995 882

Source: Tilak(2000),basedonNSSO(1998b).


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35

Table12

AverageAnnualExpenditure(Rs.)perStudentinGeneral

EducationbyItemofExpenditureandbyTypeofInstitution

Typeofinstitution

Itemof Expenditure

Govt&

Local

Body

Govt.

Aided Private All

Tuitionfee 35 303 678 149

Examfee 24 51 51 31

Otherfees&payments 39 137 154 68

Books 114 228 216 145

Stationary 93 166 148 112

Uniform 130 238 274 164

Transport 30 137 134 59

Privatecoaching 84 284 186 130

Otherexpenses 37 71 63 45

Total 585 1615 1904 904Source:Tilak(2000)basedonNSSO(1998b).


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Table13

MonthlyPerCapitaExpenditureonEducation

PopulationGroup AllGroupsof

Population

AllLevelsofEducation

1.NAS(200708) Rs.36.42

2.NSS(61stround)(Sengupta):

ExtremelyPoor All

&Poor

200405 Rs.6.10 Rs.32.67

200708* Rs.6.99 Rs.37.44

3.NSS(63rdround) Poor All

200607 Rural Rs.4.64 Rs.22.16

200708* Rural Rs.4.87 Rs.23.24

200607 Urban Rs.14.47 Rs.91.60

200708* Urban Rs.15.17 Rs.96.07

4.NSS(199596)52ndroundonEducation

(BottomQuintile) All

a)Alllevelsofeducation

200708* Rural Rs.18.87 Rs.49.33

Urban

Rs.38.09

Rs.133.80

b)ElementaryEducation

200708* Rural Rs.20.64 Rs.40.55

Urban Rs.36.23 Rs.106.26

Note:*estimatedbasedtheactualfiguresadjustedforincreaseinprices,basedonGDP

deflators.

1. Totalprivatefinalconsumptionexpenditureoneducationinayear(inRsCrore)givenin

theNASisconvertedintopercapitaandpermonth.

2.TheextremelypoorandpoorinSenguptaetalsstudyreferstothepopulationbelowthe

povertyline.

3.Thepoorinthe63rdroundisacloseapproximationtothepopulationbelowthepoverty

line. Thepovertylineisupdatedtothe200708level,byconsideringtheGDPdeflators.

4.Expenditureonelementaryeducation(199596)isasimpleaverageofexpenditure

incurredonprimaryandmiddlelevelsofeducation. Further,theoriginalestimatesrefer

toexpenditureperstudent. Theyareconvertedintopercapitaterms,assuminga

householdsizeof4.8inruralareasand4.3inruralareas[base:NSS63rdround)(withtwo

adultsineachhouse;othersgoingtoschool).


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Table14

MonthlyAverageperCapitaExpenditureon

Education,200708 (Rs)

Rural Urban

AndhraPradesh 22.96 114.42

Assam 31.77 78.12

Bihar 11.80 54.39Jharkhand 17.57 86.33

Gujarat* 14.91 74.12

Haryana 79.16 155.41

HimachalPradesh 45.21 127.78

Jammu&Kashmir 50.14 105.78

Karnataka 19.75 68.61

Kerala 52.05 86.60

MadhyaPradesh* 8.52 69.21

Chhattisgarh 8.16 86.34

Maharashtra* 16.09 121.57

Orissa 9.70 68.48

Punjab 63.25 141.55

Rajasthan 22.43 88.06

TamilNadu 28.09 79.22

Tripura* 20.6 78.68

UttarPradesh* 22.07 71.87

WestBengal* 22.23 88.6

Source:BasedonNSSO(2008b)

Figuresfor200607areinflatedto200708

levelbyusingGSDPdeflators

*2006

07


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Household Expenditure on Education and Implications for Redefining the Poverty Line in India

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