SARVA SHIKSHA

ABHIYAN
(SSA)
Budgeting for Change Series, 2011

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This report is the product of a collaboration between the
Centre for Budget and Governance Accountability (CBGA),
New Delhi and UNICEF India.

It focuses on analysis of public spending on children in

selected states and districts of India. Field data reported in
this summary report was gathered during 2007-08. The long
version of this report is available on www.cbgaindia.org. CBGA
and UNICEF gratefully acknowledge the valuable guidance
provided by Dr. N.C. Saxena and Dr. A.K. Shivakumar at all
stages of the research and analysis.

For further information, please contact:

Social Policy, Planning, Monitoring and Evaluation (SPPME)
UNICEF India
New Delhi December 2011

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 CONTENTS

1. BACKGROUND....................................................................................1

2. Inadequate Budget for Elementary Education...............7

3. Under-Utilisation of Available Funds.................................8

4. Mismatch between spending and needs............................11

5. How Fund Utilisation is Constrained by

Institutional and Budgetary Processes..........................15
5.1 Deficiencies in Planning....................................................15
5.2 Bottlenecks in Budgetary Processes.........................16
5.3 Systemic Weaknesses.........................................................18

6. CONCLUSIONS..................................................................................20

ANNEX.....................................................................................................22

GLOSSARY..............................................................................................24

Note to readers:

Rs. 10 million is equivalent to Rs. 1 crore

Rs. 100,000 is equivalent to Rs. 1 lakh

 1. BACKGROUND

More than 40 years ago, the first Education Commission in India

(1964‑66) had in its report noted that, “[We] should strive to allocate
the largest proportion of Gross National Product possible to educational
development”. The time was then opportune, with the country’s
transformation into an independent republic, to assess the critical gaps
and address these in right earnest. It was proposed that universal
primary education be made a goal and that the government increase
its spending on education to 6 per cent of the Gross National Product
(GNP) within the next 20 years, that is, by 1985-86. Although a lot has
changed since, many concerns persist. India’s total public spending
on education (at 3.23 per cent of Gross Domestic Product (GDP) in
2009-10) is nowhere near the promised 6 per cent and the educational
outcomes reveal critical gaps. So, while the Right of Children to Free
and Compulsory Education Act passed by Parliament in August 2009 is
a welcome step, there is scope for increasing its clarity with regard to
financing and implementation.

More recently, the United Nations Summit on the Millennium Development

While the Government of India Goals in September 2010 reiterated the need for focusing on education to
has significantly expanded improve the quality of life. A comparison of the expenditure on education
outlays for education, outcomes in India with select developing countries reveals the need for greater
when contrasted with government spending in this area (refer to Figure 1).

neighbouring countries like

While the Government of India has significantly expanded outlays for
Bangladesh, continue to be poor.
education in recent years, outcomes continue to be poor. A comparison
of the average years of primary schooling among women 15 years of
age and above reveals that India, along with other countries in South
Asia, is a poor performer. What is interesting, however, is the fact
that Bangladesh, despite spending less on education, registers better
outcomes (Figure 2).

Figure 1: India’s total spending on education stands at about 3 per cent

of GDP

Source: Human Development Report 2010, UNDP

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 Figure 2: A 15+ woman in India receives on average only 2.7 years
of schooling

Source: Barro-Lee dataset (www.barrolee.com last accessed on 16.09.2011)

Of the total budgetary outlays reserved for education in India, about

Of the total budgetary outlays 50 per cent go towards financing elementary education. Within the
reserved for education in India, elementary education budget too, nearly 65 per cent go towards one
about 50 per cent go towards programme – the Sarva Shiksha Abhiyan (SSA) – which is the Government
financing elementary education of India’s flagship for delivering education to India’s children until Class VIII.
The outlays for elementary education are financed primarily through the 2
which is primarily delivered
per cent cess that the Government of India levies on all central taxes (e.g.
through a Government of India’s
the income tax). The Department of Elementary Education and Literacy,
flagship known as the Sarva
housed within the Ministry of Human Resource Development (MoHRD),
Shiksha Abhiyan. Government of India receives the proceeds from the cess and maintains
them under a non‑lapsable fund called the Prarambhik Shiksha Kosh
(Fund created at Union Government level to finance elementary
education). This is then used as a supplementary resource to finance the
SSA and other programmes for elementary education (e.g. the Midday
Meal Programme), other funds coming in from the outlays reserved for
education under the Government of India’s budget for a given fiscal.

Launched in 2001, the goal of the SSA is to ensure that ‘every child
is in school and is learning well.’ To achieve this goal, the programme
promises to provide universal primary education to children between the
ages of 6 to 14 through community ownership of the school system, in a
mission mode. It is the primary programme used for delivering the Right
to Education. At the time it was launched, the main objectives of the
programme were:
i. All children in school, Education Guarantee Centre, Alternate School
or ‘Back-to-School’ camp by 2003 (since revised to 2005);
ii. All children complete five years of primary schooling by 2007;
iii. All children complete eight years of elementary school by 2010;
iv. All gender and social category gaps bridged, at primary stage by 2007
and at elementary education level by 2010;
v. Focus on elementary education of satisfactory quality with emphasis
on education for life; and
vi. Universal retention by 2010.

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 The Right to Education (RTE) Act was passed (in 2009) following
the SSA, and entitles all children between the ages of 6-14 years
to free and compulsory admission, attendance and completion
of elementary education. While ‘compulsory education’ casts an
obligation on the appropriate Government to provide and ensure
admission, attendance and completion of elementary education;
‘free education’ means that no child, other than a child who has been
admitted by his or her parents to a school which is not supported by
the appropriate Government, will be liable to pay any kind of fee or
charges or expenses which may prevent him or her from pursuing and
completing elementary education.

With the passage of the RTE and to ensure that it was followed up on,
a roadmap was recommended, which included the following activities:
• Establishment of schools in all neighbourhoods or areas or limits
prescribed as a neighbourhood within three years of the Act coming
into force i.e. by 31st March, 2013;
• Provision of infrastructure in all schools (i.e. all weather school
buildings, one classroom per teacher, an office-cum-store-cum-
head teacher room, toilets and drinking water facilities, barrier free
access, library, playground and fencing/boundary walls) by 31st
March 2013;
• Provision of teachers in all schools as per prescribed pupil-teacher
ratios by 31st March 2013;
• Training of all untrained teachers by 31st March 2015; and
• All other quality interventions and provisions needed to implement the
Act (with immediate effect).

While activities to ensure the RTE have only just been rolled out,
Tangible improvements have tangible improvements have been observed since the start of the SSA.
been observed since the start Independent surveys, such as the Annual Status of Education Report
of the Sarva Shiksha Abhiyan: (ASER, 2010) undertaken by Pratham observe that the percentage of
the proportion of out of school children out of school in rural India, is at its lowest ever. According
to the survey, the percentage of children (age 6-14) in rural India not
children in India has declined
enrolled in schools in 2010 was 3.5 per cent – a dip from 4 per cent
and school infrastructure has
in 2009 and 6.6 per cent in 2005 (the first time the ASER survey was
improved. undertaken; also see figure 4). More importantly, the proportion of girls
(age 11-14) out of school has declined considerably from 11.2 per cent
in 2005 to 5.9 per cent in 2010, with big improvements in Bihar1. Other
surveys such as the SRI-IMRB survey in 2009 and the recent PROBE
Revisited Survey confirm this trend (PROBE Revisited, 2011). Thus the
dream of universal school participation seems within reach.

1 The percentage of out of school girls and

There have been other positive developments as well. Schooling
boys in all age groups in Bihar has been
declining steadily since 2005. In 2006, 12.3 infrastructure seems to have improved, school meals (provided under
per cent of boys and 17.6 per cent girls in
the Midday Meal programme) are encouraging children to come to
the state were out of school in the 11 to
14 age group. By 2010, these numbers school and numerous incentives have been promised by the Union
had declined to 4.4 per cent for boys and
Government and different State Governments to bring children
4.6 per cent for girls showing very little
difference by gender (ASER 2010). to schools (e.g. free uniforms, textbooks, scholarships and other

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 incentives such as bicycles to ride to schools). These are reflected both
Learning outcomes, however, in official data (Table 1) and in independent surveys (PROBE Revisited,
continue to be poor; more parents 2011; Figures 3a, 3b and 3c).
now opt to send children to
private schools. However, mere enrolment or improved infrastructure, as educationists
would argue, does not assure attendance, and more importantly,
learning. Several surveys in India deride the poor quality of teaching

Figures 3a, 3b, 3c: Schools now have better infrastructure and give
more incentives
Percentage of schools which reported distributing

Percentage of schools with

Percentage of schools which reported distributing these incentives

Source: School Surveys: PROBE, 1996 and PROBE Revisited, 2006

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 Table 1: Official data confirms improvement in school infrastructure
(2007-08 to 2009-10)

Key Indicators 2007-08 2008-09 2009-10

Average number of rooms (all

n.a. 3.6 3.7
government schools)

% Schools with Drinking Water 86.7 87.8 92.6

% Schools with Common Toilet 62.7 66.8 54.3

% of Schools with Girls’ Toilet 50.5 53.6 58.8

Source: District Information on School Education (DISE, 2011), MoHRD

Attendance is dropping by the in schools. This is reflected in poor learning outcomes as well as an
year in states like Uttar Pradesh increasing preference among parents to send their children to private
and Bihar. schools. In 2010, nearly 26 per cent of boys and 22 per cent of girls
surveyed for ASER in rural areas were enrolled in private schools (as
opposed to 21 per cent and 18 per cent respectively in 2007). In other
words, despite the drive to enrol children in schools, enrolment levels
in government schools were actually on the decline, with households in
some states like Kerala, Manipur, Meghalaya and Haryana showing near
equal enrolment in government and private schools (Figure 4)2.

The other cause of worry is attendance. While states like Kerala and
Himachal Pradesh are doing well on this front (recording attendance
levels of more than 90 per cent), attendance is dropping by the year in
states like Uttar Pradesh and Bihar. Uttar Pradesh for instance registered
a decline in the proportion of schools registering more than 75 per cent
attendance in subsequent rounds of the ASER survey –from 31 per cent
in 2007 to 17 per cent in 2010. A similar decline was reported in Bihar
(from 21 to 13 per cent over the same period).

Again, being in class does not guarantee learning. Upon giving standard
Although school infrastructure V children a reading task (that of reading simple standard I text), ASER
has expanded, amenities provided found that only 53 per cent of the children surveyed in rural India in 2010
by schools (e.g. toilets) remain were able to read it. This is a test that ASER has been using year after
largely dysfunctional. year since 2005, and learning levels have only declined for the worse
from 58 per cent in 2007 to 53 per cent in 2010. ASER 2010 also reports
a decline in children’s ability to do simple math. In this context, the RTE’s
provision to promote all children until Standard VIII without exams is
likely to have a further deleterious impact on learning levels.

2 Interestingly, households in many of the

Finally, although school infrastructure has expanded, amenities provided
southern states are now opting to send by schools remain largely dysfunctional. Toilets are either locked or
their children to private schools. While
households in Kerala had been doing so
broken; handpumps are not usable; and the quality of building material
earlier as well, the percentage of children used is often suspect leading to leakages during the monsoons. Among
(age 6-14) in private schools has increased
considerably between 2009 and 2010
the schools surveyed by the PROBE team in 2006, only one-third had
in Andhra Pradesh (from 29.7 to 36.1 separate toilets for girls, and of these too, only half were functional.
per cent), Tamil Nadu (from 19.7 to 25.1
per cent) and in Karnataka (from 16.8 to
A majority of schools used blackboards, but had no chalk or duster or
20 per cent). even a safe place to keep school registers (PROBE Revisited, 2011).

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 Figure 4: Nearly one in every four school going children in rural India
are in private schools

Source: ASER 2010

In sum, despite a substantial increase in allocations, there does not

seem to be a significant improvement in outcomes as measured through
attendance, learning levels and infrastructural amenities for children and
teachers. This leads to the question: do allocations get spent effectively,
in a manner that reflects needs on the ground?

This summary report looks at the quality of spending with regard to the
outputs and services delivered by the Sarva Shiksha Abhiyan. Four broad

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 concerns emerge. First, we find that despite an increase, budgets set
aside for the programme are still significantly short of budgets provided
for education internationally (Figure 1) and lower than the average out
of pocket expenses incurred by parents in sending their children to
government run primary schools. Second, even for the funds allocated,
there is scope for improving efficiency in utilisation. Funds allocated for
the programme are presently under-utilised, which means that there is
room for increasing spending within the given envelopes. Third, existing
spending patterns do not reflect needs on the ground with more funds
being allocated for building infrastructure and financing teacher salaries
than on components like teacher training. Also, with funds arriving usually
in the last two quarters of the year, expenditures are rushed with money
being spent on needless infrastructure creation, that too of poor quality.

Fourth, and finally, underlying the issues of adequacy and quality of

spending are institutions and processes within the government that
channel spending on education. As we shall see in this summary report,
it is these institutions and processes that account for delays in fund
and programme delivery. We attempt to uncover these institutional and
procedural bottlenecks by tracking the flow of funds for the SSA from
the Union Government down to the State Governments and further
down to the district, block and the primary unit of service delivery (in this
case the primary school). The summary report builds both on secondary
data obtained from the SSA website (www.ssa.nic.in) and primary data
gathered by the Centre for Budget and Governance Accountability
(CBGA) in 2007-08 in two states – Uttar Pradesh and Chhattisgarh. In
particular, it builds on four case studies from Barh and Jakhora blocks in
Lalitpur district of Uttar Pradesh, and Chhuria and Dongargaon blocks in
Rajnandgaon district of Chhattisgarh recognising upfront the caveat that
findings from these case studies cannot be generalized to all of Uttar
Pradesh and Chhattisgarh, let alone all of India.

2. Inadequate Budget for Elementary Education

One measure of judging the adequacy of public spending on education

is its ratio to the country’s GDP. On this count, as seen in Figure 1, India
lags behind other developing countries like Brazil and Vietnam.

Since 2005-06, there has been nearly a 3-fold increase in spending on

India lags behind other elementary education through the SSA. The erstwhile Kasturba Gandhi
developing countries like Brazil Balika Vidyalaya (KGBV) and National Programme for Education of Girls
and Vietnam in terms of public at Elementary Level (NPEGL) are now part of the programme. Yet, the
spending on education. average public spending, per child, on elementary education works
out to be lower than the average per child costs incurred by parents
to send their children to government schools. This is illustrated by the
following numbers. In 2009-10, slightly over 130 million children were
enrolled in government run elementary schools in India (DISE 2011). In
the same year, the Government of India earmarked in its Union Budget

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 an allocation of Rs. 13,100 crore to be spent on the SSA, the primary
Nearly one-fourth of the funds vehicle for delivering elementary education to children. This works out
allocated by the Union and State to an annual budgetary allocation of approximately Rs. 1000 per child.
Governments for SSA remained In contrast, the per capita out-of-pocket expenditure incurred by an
unutilised in 2009-10. average parent in 2008 to send her child to government run elementary
schools was Rs. 1243 (NSS 2008). Even assuming that these do not
reflect outlays set aside for the SSA by individual State Governments, the
fact that Union Government allocation is lower than individual spending
(which given inflationary pressures would have risen further by 2010)
suggests that the funds provided for the programme are still inadequate.
Also, since not all allocations translate into expenditures (section 3),
actual Union Government ‘spending’ on elementary education may work
out to be lower than the Rs. 1000 estimate derived above.

Clearly, allocations of the Union government on elementary education do

not seem to be meeting the needs of the sector when seen in light of
the high out-of-pocket expenses incurred by individuals on education.

3. Under-Utilisation of Available Funds

Comparing programme expenditures against planned allocations we

find that nearly one-fourth of the funds allocated by the Union and State
Governments for SSA remained unutilised in 2009-10. At an all India
level, both the Union and the State Governments together provided for
an outlay of Rs. 27574 crores of which nearly Rs. 21038 crores were
spent. In other words, nearly Rs. 6536 crores or 25 per cent of the
approved outlays remained unspent. There were of course variations by
states. While states like Punjab, Tamil Nadu, Kerala, Maharashtra and
Rajasthan posted high utilisation, utilisation levels in Bihar remained low
despite recent initiatives by the State Government to provide incentives
to students to attend school (e.g. the Mukhya Mantri Cycle Yojana which
provides free bicycles to girls to help them reach schools).

Has utilisation improved over time? Only marginally it seems. About 32 per
There is a tendency to over report cent SSA funds went unutilised in 2005-06. This ratio had dropped to 25
expenditures, particularly at per cent in 2009-10. At the state level too, the problem of under-utilisation
lower levels of administration, to persisted (Figures 6a and 6b). Both Chhattisgarh and Uttar Pradesh
justify more funding. Thus actual utilised only about 60 per cent of their approved outlays for SSA in 2008-
09, with utilisation levels actually showing a dip from previous years. The
utilisation reported for a given
only time utilisation levels registered improvement were in 2004 owing
fiscal may be higher than actual
to the introduction of Electronic Fund Transfers and the concomitant
expenditures on the ground. improvement in financial management. Under-utilisation was similarly
observed at lower levels (district and school). Figures 7a and 7b highlight
the trends of utilisation at the district and school levels, respectively.

The aforementioned numbers on utilisation (or lack thereof) however

need to be treated with caution as there is a tendency to over report
expenditures, particularly at the lower levels to justify more funding.

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Figure 5: About 25 per cent funds allocated for the SSA in 2009-10
went unspent

Source: Statements of outlay approved and expenditure under SSA, 2009-10

(www.ssa.nic.in accessed on September 13, 2010).

This is complicated by the nature of reporting expenses in SSA. All funds

transferred as an advance from the district down to the school level
are treated as expenditures. These advances are adjusted only upon
the receipt of utilisation certificates or expenditures statements from
schools. Ordinarily, schools are required to submit utilisation certificates
within one month of the completion of a financial year, but they end up
submitting them much later. This creates a sufficient time lag within
which expenditures can be reported without actual money being spent
on the ground. In other words, actual utilisation reported for a given fiscal
may be higher than actual expenditures on the ground.

Also, funds allocated are not the same as funds available. Each year,
the Union Government receives from different State Governments their
Annual Work Plan and Budget (AWPB) which is a summary document
of the progress achieved against previous targets, activities proposed
in the current fiscal and funds required to undertake them. Depending
on individual state requirement and previous unspent balances, the
Project Approval Board (PAB) at the MoHRD releases funds. These are
then matched by funds by the State Governments for the SSA. The
total funds available for spending at the state level therefore, are a
sum of releases by the Union and State Government plus any unspent
balance from the previous year. Independent studies comparing

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 Figure 6: Utilisation of Funds in SSA at State Level (2002-03 to 2008-09)
6.a: Utilisation of Funds in SSA in Chhattisgarh

Source: State Project Office, Chhattisgarh, 2008 and SSA website

6.b: Utilisation of Funds in SSA in Uttar Pradesh (2001-02 to 2009-10)

Source: State Project Office, U.P., 2008 and SSA website

Figure 7: Utilisation of Funds in SSA at District and School Levels

(2004-05 to 2006-07)
7.a: Utilisation of Funds in SSA at District Level in Rajnandgaon

Source: District Project Office, Rajnandgaon, Chhattisgarh, 2008

7.b: Utilisation of Funds in SSA at School Level, Salhetola, Block Chhuria,

Rajnandgaon (2002-03 to 2005-06)

Source: District Project Office, Rajnandgaon, Chhattisgarh, 2008

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 utilisation levels against funds available also find that about 83 per cent
of funds available were utilised in 2009-10 (e.g. Accountability Initiative,
2011). This is more than utilisation when seen against allocated funds,
implying that not all funds allocated are released.

4. Mismatch between spending and needs

Next, looking at the kind of activities against which expenditures are

A significant proportion of SSA incurred in the SSA, we find that a significant proportion of funds in the
funds are set aside for paying programme are set aside for paying salaries to teachers and financing
salaries to teachers and financing infrastructure. This imbalance arises from the stage of planning itself.
infrastructure, leaving little For example in 2009-10, about 72 per cent of funds allocated by the
Union Government were earmarked for salaries and infrastructure
funds for training, innovation or
(Figure 8). This imbalance is consequently reflected in the expenditure
monitoring.
shares of different components.

Spending patterns at the state level suggest that expenditure is far

more imbalanced, particularly towards financing salaries. In Uttar
Pradesh, teacher salaries accounted for 75 per cent of the expenditures
incurred on the SSA in 2009-10 (Figure 9a). The remaining funds were
spent mostly on civil works, leaving very little room for spending money
on training, innovation or administrative activities like monitoring.
A similar situation was observed in Chhattisgarh (Figure 9b). Despite
such high levels of expenditures on funding salaries, outcomes such
as pupil-teacher ratios recorded little improvement. In 2009-10 for

Figure 8: Teacher Salaries and Infrastructure account for 73 per cent

of SSA allocations

Notes: Teacher salaries include salaries and grants; training includes both teacher
and community trainings; infrastructure includes civil works, major repairs and
maintenance grant; innovation includes innovation component and learning
enhancement programme; special programmes include inclusive education, out of
school children & remedial education, and free textbooks; administration includes
funds for Research and Evaluation and Management; others includes school grant,
funds for BRC and CRC other than civil works, and teacher learning equipment.
Source: Statements of component wise expenditure, 2009-10 (www.ssa.nic.in
accessed on September 13, 2010).

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 Figures 9a and 9b: Nearly three-fourths of SSA expenditures in Uttar
Pradesh and Chhattisgarh are accounted for by teacher salaries

Source: Statements of component wise expenditure, 2009-10 (www.ssa.nic.in

accessed on September 13, 2010).

instance, government schools in Uttar Pradesh had the third highest

Nearly three-fourths of SSA pupil-teacher ratio in the country, with 42 pupils per teacher, after
expenditures in Uttar Pradesh are Jharkhand (43) and Bihar (57)3. More significantly, pupil-teacher ratio in
accounted for by teacher salaries. the state declined only marginally from 49 in 2008-09 to 42 in 2009-10.
Still, the pupil-teacher ratio in Also, the average number of teachers remained more or less stagnant
at 3 teachers per government school.
the state is one of the highest
in the country.
On the other hand, the requirements for training remained significant.
In 2009-10 for instance about 36 per cent of total teachers in government
schools in Uttar Pradesh and 40 per cent of teachers in government
schools in Chhattisgarh were contractual teachers. Of these, only half
and one-third, respectively had received any professional training. Yet,
as Figures 9a and 9b illustrate, hardly any budget had been set aside for
teacher training in both the states.

Similarly, a very small proportion of spending in both states went

towards administration and monitoring. While wages and salaries are
critically important in social sectors, non-wage components such as
communication, transport, and equipment are required to keep the system
functioning smoothly. However, in their field visits to district Rajnandgaon
in Chhattisgarh, the CBGA team found that there was no budget to cover
the cost of a vehicle for the Block Resource Centre Coordinator and
Cluster Resource Centre Coordinator so they could monitor the specified
number of schools under them. Allowances for vehicles and telephones
make the task of monitoring easier and translate into better utilisation. Yet,
and oftentimes, these costs are not provided for while making a budget.
Instead the CBGA team found that the amount dedicated for management
3 The average pupil-teacher ratio for India as
at the block level in Rajnandgaon, Chhattisgarh was only about Rs. 12,000
a whole in 2009-10 was 33. per year. This included costs towards electricity, conducting meetings,

12
 stationery, communication and transportation. With such a small budget,
Only about 60 per cent of it was no surprise that the Cluster Resource Centre Coordinator, who is
schools, both in Uttar Pradesh mandated with the responsibility of evaluating the needs of around 20
and Chhattisgarh had a schools per month (irrespective of distance, terrain and other factors),
functional toilet in 2009-10. Still got a travel allowance of only Rs. 200-300 per month.

relatively lower proportions of

The biggest shortfall, however, was in infrastructure spending. Only
total SSA expenditures went
about 60 per cent of schools, both in Uttar Pradesh and Chhattisgarh had
towards financing civil works in
a functional toilet in 2009-10. Similarly about 50 per cent of schools in the
both states. former state and 70 per cent of schools in the latter had a boundary wall.
Still relatively lower proportions of total SSA expenditures went towards
financing civil works in both states, reflecting a mismatch between
spending and needs on the ground.

Before one concludes that expenditures are mostly undertaken arbitrarily,

it is critical to note the manner in which funds are released. Usually,
the Union Government transfers funds in two installments to State
Governments – once in April and then again in September. However,
the second installment is released only after the State Government
has transferred its matching funds. Also, the first installment is
usually delayed which means that schools, say, aiming to undertake
pre-monsoon repairs, are bereft of funds to do so. To substantiate this
with the case of Chhattisgarh, as against the stipulated two installments,
the state received eight installments in 2004-05, seven in 2005-06, six in
2006-07 and five in 2007-08, with the major share of transfers happening
at the very end of the year (Table 2). The situation in 2006-07 is indicative
of this phenomenon with just 0.98 per cent of the total disbursements
being released as the first installment and over 31 per cent of the funds
being released as the seventh installment. A similar situation was found
in Uttar Pradesh (Table 3).

Delays in transfer of funds are common at the sub-district level as well.

In Dongargaon block of Rajnandgaon district, Chhattisgarh, CBGA found
that the money came to the block in 19 installments in 2006-07 and 27
installments in 2007-08 (Figure 10), making it more of an exercise for the
block level officials to manage this money flow (receiving and disbursing
money) rather than focusing on monitoring programme implementation.
Figure 10: Spending across Financial Quarters in SSA at Block Level
(2006-07 to 2007-08)

Table 2: Share of Total Disbursements in SSA across the Financial Year in Chhattisgarh (2004-05 to 2007-08)

Financial Year I II III IV V VI VII VIII

2004-05 13.1 15.5 9.6 16.6 6.3 8.8 25.0 5.2

2005-06 5.4 3.1 37.5 12.2 0.6 14.9 25.7 0.6

2006-07 1.0 7.4 40.6 9.9 0.3 0.8 31.2 8.9

2007-08 38.6 32.6 4.9 23.9 0.0 0.0 0.0 0.0

Source: State Project Office, Rajiv Gandhi Shiksha Mission, Chhattisgarh, 2008

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 Table 3: Delay in Receipt of Funds under SSA in U.P.
(2004-05 to 2006-07)
No. of Installments % Share of Receipts % Share of Receipts
Year
Centre State in the 3rd Quarter in the 4th Quarter

2004-05 5.0 10.0 4.2 35.4

2005-06 6.0 11.0 30.7 16.5

2006-07 4.0 12.0 38.7 0.0

Source: Uttar Pradesh Education For All Project Board Office, Lucknow, 2008

Similarly, in Uttar Pradesh, because of the time taken for the funds to
move from one level of government to the next (State Project Office to
District Project Office to the block level), most of the money travelled in
the third and fourth quarters and remained parked for considerable time
periods in the State and District Project Offices despite having been
officially disbursed. So for instance in 2007-08, money for the Block
Resource Centres - travel allowance, teaching learning material and
contingency – was released by the State Project Office, Uttar Pradesh
in August 2007 (second quarter of the financial year) but was released
by the District Project Office, Lalitpur, only by February 2008 (last
quarter). Given that the Block Resource Centre serves as a professional
support agency by providing decentralised training and teacher support
activities, delay in receiving money disrupted implementation. Travelling
to distant schools to provide continuous support to teachers and
preparation of Teaching Learning Materials were some of the critical
activities that were adversely affected. Other examples abound. On
visiting primary and upper primary schools in Lalitpur in 2008, CBGA
found that the construction of overhead tanks in the schools could not
be completed as the money was released by the District Project Office
only in February 2008.

Figure 10: Spending across Financial Quarters in SSA at Block Level

(2006-07 to 2007-08)

Source: Basic Shiksha Adhikari Office, Block Dongargaon, Rajnandgaon, 2008

14
 Delays in receipt of funds also mean a rush to spend money
Delays in receipt of funds mean a towards the end of the year which results in poor quality spending.
rush to spend money towards the For instance, in Uttar Pradesh, the CBGA team found a case of a
end of the year which results in training module on gender sensitisation, for which the money came
poor quality spending. in as late as on 29 March 2008. Funds for Management Information
Systems (MIS), data entry, and computer education were disbursed
by the State Project Office on 31 March 2008 and released by the
District Project Office, Lalitpur, the very same day. With money
coming in on the last day of the financial year, it was clear that neither
much of the MIS data entry nor any computer education would have
been attempted at the district level or at levels further down for the
financial year 2007-08. Similarly, instances were found of schools
undertaking activities like white washing to justify spending than
actual repairs and maintenance.

5. How Fund Utilisation is Constrained by

Institutional and Budgetary Processes

5.1 Deficiencies in Planning

The process of making annual According to SSA guidelines, the Annual Work Plans and Budgets of
work plans often takes up individual State Governments must be prepared through a decentralised
more time than the actual planning process starting from the level of the community. Plans must
implementation of the programme. be prepared for each habitation by the School Management Committee
(comprising both parents and teachers), in consultation with community
members. These should then be aggregated at the block level, further
on to the district and the state level4. States are usually required
to submit their plans to the Union Government by April each year.
Accordingly they set a deadline of January for districts to submit their
individual plans.

In reality though, significant delays are observed in the planning process.

CBGA’s fieldwork in Chhattisgarh revealed for instance that in 2003-04,
the State Project Officer of Raipur (Chhattisgarh) received the Annual
Work Plan and Budget from districts only in April. In spite of having sent
it to the Government of India the same month, the Project Approval
Board at the MoHRD approved the plan in September. The final approved
plan was sent back to the District Project Offices in October, giving
them only five months to implement the entire year’s plan (Table 4). This
4 The block level planning team consists of example illustrates how the planning process often takes up more time
the Block Education Officer, Panchayat
members and NGO representatives. The
than actual implementation of the programme. Moreover, the district
district level team includes the District plans do not reflect actual demands from the field. The plans emanating
Project Officer (DPO) and representatives
from different departments such as health,
from the village and panchayat levels5 are required to be submitted
public works, social welfare, and women in English and this poses a problem due to a lack of knowledge of
and child development.
the language. Hence, field level plans generally do not project ground
5 Gram Panchayats are the lowest tier (at
the village level) of self-governance under
realities since they are often “cut-paste jobs” or replicas of plans,
the Panchayati Raj Institution system, possibly from another state. Weak capacity of functionaries and lack of
introduced with the 73rd Constitutional
Amendment Act, 1992. For details, visit
a proper planning mechanism at the grassroots is another reason why
www.rural.nic.in. actual demands are not reflected in the Annual Work Plan and Budget.

15
Table 4: Timeline for Implementation of Annual Workplan and Budget (AWPB) and Related Delays (2003-04
to 2005-06)
Receipts of Sent to GOI for Approval from Conveyed to Delay in Commencement
Financial Year
AWPB (Month) Approval PAB DPOs (In months)
2003-04 April April 3-Sep Oct-03 6

2004-05 April April 26-Jul Aug-04 4

2005-06 March March 8-Aug Sep-05 5

Source: State Project Office, Rajiv Gandhi Shiksha Mission, Chhattisgarh, 2008

Related to this is the problem of low community involvement. Since

the panchayat level functionaries are also responsible for the overall
implementation of other programmes in the district (such as the
Mahatma Gandhi National Rural Employment Guarantee Scheme and
Ambedkar Gram Yojana), a sense of ownership is absent among the staff
with regard to the Sarva Shiksha Abhiyan.

Weak reporting of financial 5.2 Bottlenecks in Budgetary Processes

information impedes effective Several hurdles relating to existing budgetary processes under the Sarva
fund utilisation. Shiksha Abhiyan impede effective fund utilisation. Weak reporting of
financial information owing to poor capacity of the financial management
staff is one vital gap. The CBGA team found for instance that the District
Project Office in Lalitpur, Uttar Pradesh had only one ad-hoc MIS Data
Entry Operator. The overload of data entry on one person led to several
errors in the Statement of Expenditure, which did not match with the
Ledger. Another instance of poor record-keeping was found in Barh block
of Lalitpur where the Assistant Block Resource Centre Coordinator was
unable to provide CBGA with details of the trainings conducted and the
materials purchased by the Block Resource Centre.

Similar instances of irregularities in financial reporting were found in

Chhattisgarh. The internal audit reports for two years (2006-07 and
2007‑08) in Rajnandgaon district in Chhattisgarh revealed the
following gaps:
• Delay in settlement of advances provided for procurement and
other activities;
• Mismatch with regard to fixed assets reported in the books of
accounts and those purchased;
• Improper register maintenance and infrequent physical verification
of assets;
• Transfer of funds under School Grants, Teacher Grants, Maintenance
Grants and Teaching Learning Equipment Grants to the accounts
of the Block Resource Centre (BRC) and Cluster Resource Centre
(CRC) despite instructions of transferring the money directly into the
account of the schools; and
• High receipt of interest in the savings account owing to money
being parked in the District Missions for much longer than necessary
despite State Mission guidelines (November 2005) instructing District
Missions to remit funds to villages within three days.

16
 To give an example of the nature of misreporting, the CBGA found
in Lalitpur, Uttar Pradesh, that although money was disbursed to
the Village Education Committees for various items of expenditure
in 2007-08, records showed the entire amount as unspent. This
was because the Committees did not submit Utilisation Certificates
to support the spending. The listed items of unspent expenditure
were those related to Civil Works, Shiksha Mitra6 Honorarium,
Block Resource Centre (BRC) and Naya Panchayat Resource Centre
(NPRC)7, Integrated Education for the Disabled, Education Guarantee
Scheme and Alternative and Innovative Education, District Institute of
Education and Training (DIET) and National Programme for Education
of Girls at Elementary Level.

To cite another example, the District Project Officer as per the Sarva
Programme delivery staff are Shiksha Abhiyan Finance and Procurement Manual, is supposed to
overburdened with multiple maintain block-wise accounts of funds disbursed and their subsequent
reporting requirements. adjustments of advances after receiving the Utilisation Certificates.
However, the District Project Office of Lalitpur was yet to do so at the
time CBGA visited the project office in 2008.

Even at the school level (Primary School Bhiloni Lodha, Barh block,
Lalitpur), no set guidelines were being followed for reporting as the
Utilisation Certificates also included components of another programme
– Integrated Child Development Services. This apart, the funding receipts
for some of the components were dated before the beginning of the
fiscal. For example, money for maintenance (painting) for 2006-07 was,
allegedly, received in January 2006 even before the financial year had
begun. Similarly, a part of the honorarium component for the Shiksha
Mitra was received after the financial year ended in April 2007. The
principal of the primary school in question was ignorant of how accounts
were being maintained, as it was the Gram Pradhan (village head) who
kept the details of the money coming in.

6 Shiksha Mitra is the locally used term Such irregularities are closely linked to issues of poor capacity of
in Uttar Pradesh for para teachers.
They are known as Shiksha Karmis in
programme staff to undertake the financial processes related to the
Chhattisgarh. Para teachers are recruited programme. At the time of CBGA’s field visit, district officials in Lalitpur,
to perform similar functions to regular
teachers. They are usually less qualified
for instance, were still using the outdated single entry system which is
than regular teachers and paid lower not ideally designed for recording financial transactions, as it has a wider
honorarium. Activists and educationists
have consistently highlighted the service
margin of error. Village Education Committee members were provided
conditions of para teachers as a cause for with a few hours of training, which included financial and accounting
concern in ensuring quality education, as
these teachers receive lower remuneration
matters, but this was insufficient.
for the same amount of work that they
perform and have a contractual job.
In addition, Programme Delivery and Accounts staff are overburdened
7 While the Block Resource Centre (BRC)
functions at the block level, the Naya
with multiple reporting requirements. This is compounded by staff
Panchayat Resource Centre (NPRC) shortage and untrained staff. Over-burdened accounts staff seems to
functions at the cluster level and provides
regular academic support, conducts
be engaged most of the time in managing money in transit and ensuring
teacher trainings, undertakes follow up that the necessary reporting gets done. It is thus not only counter-
workshops and meetings, and provides
a platform for peer learning as well as
productive to the overall financial management processes by putting
sharing of good practices. undue stress on the existing financial staff, but also leads to immense

17
Table 5: Register Maintenance by School Teachers

Student Attendance (Daily) Uniform (Yearly) Health Check-up (Half-yearly)

Admission (Yearly) Maintenance (Yearly) Functional Library (Yearly)

Scholarship (Half-yearly) Letter etc. (Monthly) Stocks & stores (Monthly)

Child Survey (Yearly) MTA/PTA Meeting (Monthly) UNICEF (Yearly)

MDM (Monthly) Information/Notification (Monthly) Shiksha Mitra Honorarium (Monthly)

Development (Monthly) Examination Results (Yearly) ECC/AWW Honorarium (Monthly)

Sports (Monthly) Monitoring & Inspection (Yearly) Teacher Attendance (Daily)

Textbook (Yearly) VEC Records (Monthly) Enrolment (Yearly)

Total Number of Registers Maintained = 24

Source: Primary School Bhiloni Lodha, Block Barh, District Lalitpur, Uttar Pradesh, 2008

delays in programme implementation and money lying unutilised for long

periods. On the other hand, Programme Delivery staff like the teachers
also have multiple non-teaching responsibilities that keep them away
from providing quality education (Table 5).

Another vital concern relates to inadequate decentralisation of financial

powers. The District Project Committee has the authority at the district
level to implement the Sarva Shiksha Abhiyan but has no financial
powers to sanction funds (except for an amount under Rs. 25000). It is
the District Magistrate, who is also the District Mission Director for the
Sarva Shiksha Abhiyan, who is the financial sanctioning authority. This
constrains day-to-day implementation as even for spending Rs.700 a day
beyond the specified Rs.25,000, the District Project Committee needs
approval from the District Magistrate’s Office, which is a time consuming
process, depending on the availability of the senior official, other pressing
matters and the chain of command followed at the District Magistrate’s
Office to move the file for approval.

5.3 Systemic Weaknesses

Apart from the problems outlined, vital to the effective utilisation of funds
and proper implementation of any programme, is a strong government
apparatus to support and take forward any development initiative.

Availability of programme and accounts staff remains a challenge for

the Sarva Shiksha Abhiyan. At the time of the CBGA survey i.e. in
2008, about 1400 teacher posts needed to be filled in Chhattisgarh
(August 2008). At the district level (Rajnandgaon), 28 out of 30 teacher
posts were lying vacant. Further, the recruitment process followed for
Shiksha Karmis was slow, which aggravated the situation. The Finance
Controller, State Project Office, Raipur, noted that at the block level, with
the stipulated norm of 10 Block Resource Persons for each block, and
with over 200 schools in the block, there was a huge shortage of Block
Resource Persons.

18
 Substantial vacancies were also noted for finance management staff,
both at the state and at lower levels. While at the State Project Office,
Chhattisgarh one State audit officer post was lying vacant in 2008, at the
District Project Office, Rajnandgaon, posts of one audit officer and one
assistant audit officer were vacant. In nine blocks of Rajnandgaon, the
Block Resource Centres had only ad hoc accountants. In some blocks
like Dongargaon, the accountant post did not even exist. Lack of proper
staff at all levels hampered various activities including implementation,
planning, monitoring, reporting, and training.

Related to the issue of staff shortage is the poor capacity of available

staff. Yet, low priority was accorded to training in terms of programme
finances (Figures 9a and 9b). It was also found that the training funds
were hugely underutilised; the spending for teacher training for 2007-08
in Rajnandgaon had not been approved until August 2008.

Another aspect related to human resources is the short tenure of the

Human resources – their key implementing officials of the programme. Evidence from CBGA’s
availability, training and tenure fieldwork shows that the tenure of many important government officials
– remain the most important is short. In Lalitpur, Uttar Pradesh for instance, key staff such as the
challenge for the Sarva Shiksha Basic Shiksha Adhikari, Block Development Officers, and District
Magistrates were frequently transferred and were in office for periods
Abhiyan.
ranging from 15-20 days to two or four days.

The second systemic challenge is poor infrastructure. Lack of basic

infrastructure – buildings for schools, Block resource Centre, Cluster
Resource Centre, District Institute of Education and Training (DIET), etc
– is one of the most important factors responsible for poor education
indicators in both the study states. In the absence of a separate building,
the Cluster Resource Centres operate out of middle schools in many
places in Chhattisgarh. Delays in the commencement of civil works are
another factor stalling programme implementation. CBGA’s field surveys
substantiate this fact (Case Studies 1, 2 and 3 in the annex present a
bleak picture of the infrastructure in place at the level of the primary
school in rural areas).

The third challenge is that of monitoring and supervision. The number of

schools falling under the purview of one Cluster Resource Centre (CRC)
is unwieldy and unmanageable. According to the norms, one Cluster
Resource Centre caters to about 10-12 schools. However, in Mohala
block in Rajnandgaon district, Chhattisgarh, CBGA found 10 clusters and
400 schools, which meant that each CRC catered to around 40 schools,
making it impossible to do any effective monitoring.

Finally, as is the case with other programmes, there are too many
agencies involved in decision making and implementation in the SSA. On
the one hand is the chain command of the Education Department which
is responsible for programme implementation, delivery and monitoring.
However, funds for the SSA are managed by the Gram Panchayat

19
 specifically the Gram Pradhan. Thus, instances are aplenty when civil
works are not undertaken or textbooks are not purchased owing to
the Gram Pradhan not releasing the money (as CBGA found in Didora
village, Lalitpur, Uttar Pradesh). The other problem arises at the level
of hiring and firing officials. In case a teacher is found to be abstaining
from his duty, the case is to be reported to the District Magistrate who
falls under a third chain of command, namely the Department of Rural
Development. Given that s/he is in charge of other departments apart
from education, there is often a considerable time lag between reporting
a grievance and action.

In sum, horizontal coordination between departments becomes

a challenge. The time taken to fire a teacher is an illustration of
coordination failure across departments. Similarly, a coordination failure
can be seen in the manner in which Shiksha Karmis dominate over
regular (permanent) teachers in Chhattisgarh. The former report to the
Zilla Panchayat (district level tier of the Panchayati Raj System) and do
not come under the purview of the District Project Committee of the
Sarva Shiksha Abhiyan. Another illustration relates to the doing away
of the Assistant Engineer (State Project Office, Chhattisgarh) post and
allocating their work to Rural Engineering Services (RES) in Chhattisgarh.
This makes for delay as the RES cadre do not come under the command
of the Education department and cannot be held accountable.

6. Conclusions

The Right to Education Act in India represents a historic effort at

providing a judiciable right to all children of India to free and compulsory
education. However, the country is as yet far from making any headroom
on the roadmap framed in 2010 to guaranteeing the RTE. Although
enrolments in government schools have increased, learning outcomes
continue to be poor. A significant proportion of schools in India still lack
basic amenities like functioning toilets. Worse, independent surveys
reveal a year on year increase in parent preference to send their children
to private schools.

The first step to achieving any improvement in education is to allocate

funds for it. Fund allocation for education in India has increased
significantly in the past few years, though it is still short of the funds
set aside by other developing countries like Brazil for education. What is
of concern is the states’ inability to utilise the funds allocated (although
there is substantial inter-state variation with states like Punjab, Kerala
and Tamil Nadu spending more than 90 per cent of the funds allocated to
them under the Sarva Shiksha Abhiyan).

Clearly, there are lessons to be learnt from the more successful states.
But more significantly, there is need to improve the quality of spending
i.e. getting better outcomes for the money spent (a concern that persists

20
across other government programmes as well). A component wise
break up of SSA expenditure suggests that a significant proportion of
funds go towards financing teacher salaries and civil works. Yet, quality
of infrastructure built remains poor and pupil-teacher ratios remain high.
Underlying these issues of quality are several bottlenecks – mostly
procedural and resolvable. A time and motion study of how funds travel
from one level of state administration to the next can help in identifying
where the delays lie. Conversely, an analysis of planning can ensure that
spending truly matches needs and that plans are submitted in time for
release of funds. But for both these recommendations to be acted upon,
capacity of staff needs to be built. More funds need to be set aside for
their training and for monitoring and supervision. Else, the vicious circle
of funds reaching the schools only in the last quarter, resulting in poor
quality outcomes, will continue.

21
 ANNEX

Case Study 1: Block Dongargaon, District

Rajnandgaon, Chhattisgarh
• Primary School Gungeri Nawagaon, Dongargaon block has primary
and upper primary classes managed by six teachers of which
only one is a permanent teacher. There are 109 and 125 students
enrolled in the Middle School and Primary School respectively. The
Middle School has 63 boys and 46 girls while the Primary School has
54 boys and 71 girls.
• At the school level, funds are released as teacher grant, school
grant and school maintenance. This apart, salary of Shiksha Karmis is
released by the Block Education Officer (BEO) once in two months.
There is a Monitoring Committee under the BEO for the purpose
of monitoring. The school session starts from June 16 and there
have been instances of delayed supply of books and the supply
being short.
• In 2007-08, books were available up to class III but not for classes III
and IV. In the same year, uniforms were supplied only to 17 out of 48
students by the BEO.
• Funds reach the school by September/December. Funds for all
components are short, including Shiksha Karmis who feel de-
motivated and insecure and strike in retaliation. Constraints also
include poor teacher strength and less number of classrooms.
With regard to training, teachers are trained for 15 days at the Naya
Panchayat Resource Centre (NPRC) on Sundays and 5 days at the
BEO level. This has led to teachers complaining that training has
affected their weekly holidays.
Source: CBGA Field Visit, 2008

Case Study 2: Block Chhuria, District Rajnandgaon,

Chhattisgarh
Primary School Salhe Tola, block Chhuria gets money from the SSA
under School Grant, Maintenance Grant and Teacher Grant. But the
funds usually reach the school by the month of December. Low
allocations for each of the components has impacted the quality of
teaching, record maintenance and school infrastructure. Classroom
shortage has also been observed due to which children sit outside in
the open. Not only is the teacher strength short, they have to manage
both classroom teaching and providing Mid Day Meals. Uniforms are
short and are only given to children belonging to the Scheduled Caste
and Scheduled Tribe households. Textbooks are also short for all the
classes and for every subject.
Source: CBGA Field Visit, 2008

22
Case Study 3: Block Chhuria, District Rajnandgaon,
Chhattisgarh
Primary School Khobha, Chhuria has 194 students with 4 teachers, 2 of
whom are Shiksha Karmis appointed by the District Education Office.
Money for Maintenance, School Grants and Teacher Grants does
not come at the same time. There is no fixed month in which funds
are released to the school. Usually, money reaches by September –
December. Due to lack of availability of funds in April, repair work gets
delayed due to which during the rains, the ceilings of the classrooms
leak and make it difficult for children to sit in the room, much less
do any learning.

The delay in Teacher Grant and School Grant also affects school work
as teachers are unable to buy stationery and other innovative learning
materials for children. Further, there is a shortage of uniforms for
Scheduled Caste and Scheduled Tribe girls. Many classes are yet to
receive textbooks, thus, affecting the academic work and teachers are
unable to complete the syllabus in due time. Teachers also complain
of reporting work and attending regular meetings that affects teaching
activities. The two para-teachers in the school complain about not being
treated like the regular teachers in terms of salary and other facilities
and feel demotivated. None of the teachers have any idea about school
planning and how to go about it.
Source: CBGA Field Visit, 2008

23
 GLOSSARY

Acronyms

AWPB Annual Workplan and Budget

BEO Block Education Officer

BRC Block Resource Centre

CRC Cluster Resource Centre

DIET District Institute of Education and Training

MIS Management Information Systems

MoHRD Ministry of Human Resource Development

National Programme for Education of Girls at
NPEGEL
Elementary Level
NPRC Naya Panchayat Resource Centre

PAB Project Approval Board

RES Rural Engineering Services

RTE Right to Education Act

SSA Sarva Shiksha Abhiyan

Translations
Gram Panchayat : Local government at the village level
Gram Pradhan : Village head
Panchayati Raj : Institution of self-government at the
village, bloack or district level
Prarambhik Shiksha Kosh : Fund created at Union Government level
to finance elementary education
Sarva Shiksha Abhiyan : Education for All Scheme
Shiksha Karmi : Locally used term for para teachers in
Chhattisgarh
Shiksha Mitra : Locally used term for para teachers in
Uttar Pradesh
Zilla Panchayat : District level tier of Panchayati Raj System

Key Terms
Actuals: The figures (of receipts and expenditure) for the previous fiscal
year would be referred to as Actuals or Accounts.

Approved Budget: It is the total amount of funds approved by the

Central Government as expenditure for the financial year.

Budget Estimates (BE): The estimates presented in this Budget for the
approaching fiscal year would be called Budget Estimates (BE).

Central Sector Schemes (also known as Central Plan Schemes):

The entire amount of funds for a Central Sector Scheme/Central Plan

24
Scheme is provided by the Central Government from the Union Budget.
The State Government implements the Scheme, but it does not provide
any funds for such a Scheme from its State Budget.

Centrally Sponsored Schemes (CSS): Government schemes wherein

the Central Government provides a part of the funds and the State
Government provides a matching grant. The ratio of contributions by
the Centre and a State is pre-decided through negotiations between the
two. CSS were formulated with monitorable targets at the central level
with adequate provision of funds in the Union Budget under various
Ministries. The objectives, strategy and methodology of implementation
are prescribed and funds are released to the States based on their
requirements. These schemes which were initially restricted to a
few well defined activities, have multiplied to include considerable
areas of activity performed by the State Governments. CSS came into
being also due to the availability of external funding for social sector
programmes which was earlier available only for economic activities of
the Government.

CSS also introduced a new mechanism for fund transfer from the Centre
to the States, by routing the funds outside the State Budget through
autonomous societies. This was done to address the growing fund flow
problems faced by States during the first half of the financial year, leading
to untimely releases and delayed implementation.

Electronic Fund Transfer (EFT): The Electronic Fund Transfer system

(or National Electronic Fund Transfer) was introduced by Reserve Bank of
India in March 2004 through which electronic instructions can be given
by banks to transfer funds. EFT allows for paperless direct debit and
credit transactions by banks. Prior to this system, a pay order was sent
followed by the cheque, which delayed the transfer of funds from one
level of government to the other.

Funds Available: It includes the total approved budget for the financial
year plus unspent balances with the State Government plus the interest
earned on money parked in the bank account.

Funds Released: It is the total amount of funds that are released by

the Central Government as expenditure for the financial year. Owing to
the problem of poor fund utilisation, the total funds released are usually
lower than the total budget approved for the financial year.

Gross Domestic Product (GDP): The Gross Domestic Product

(GDP) of a country indicates the size of the country’s economy.
Usually, GDP of a country for any particular year is expressed as a
comparison with its value for the previous year. For instance, if we
read somewhere that the GDP in 2007-08 will grow by 5 per cent ,
what it means is the economy will be 5 per cent larger than what it
was last year.

25
 Non-Plan expenditure: Any expenditure of the government that
does not fall under the category of Plan Expenditure is referred
to as Non-Plan Expenditure. Sectors like Defence, Interest
Payments, Pensions, Subsidies, Police, Audits etc. have only Non-
plan Expenditure since these services are completely outside the
purview of the Planning Commission; while sectors like Agriculture,
Education, Health, Water & Sanitation etc. have both Plan and
Non‑plan Expenditure.

Net State Domestic Product (NSDP): Net State Domestic Product

(NSDP) equals the Gross State Domestic Product (GSDP) minus
depreciation on capital goods. GSDP refers to the size of the State’s
economy. NSDP is the most complete measure of productive activity
within the borders of a State, though its accuracy suffers from the
difficulty of measuring depreciation (or capital consumption allowance).

Plan Expenditure: Plan Expenditure is meant for financing the

development schemes formulated under the given Five Year Plan or the
unfinished tasks of the previous Plans. Once a programme or scheme
pursued under a specific Plan completes its duration, the maintenance
cost and future running expenditures on the assets created or staff
recruited is not regarded as Plan Expenditure.

Public Expenditure: In the present set of outputs, the terms public

expenditure and government expenditure are used interchangeably.
Public expenditure is the amount of funds spent by the Government on
provision of critical services and functions.

Revised Estimates (RE): The estimates presented in this Budget

for the current/ongoing fiscal year based on the disbursements in
the first two to three Quarters of the fiscal year would be called as
Revised Estimates (RE).

Social Services: There are three kinds of government services/functions

– economic, social and general. Government services/functions which
usually lead to income generating activities for people and promote the
expansion of economic activities in the country are called Economic
Services. Social Services usually refer to the interventions by the
Government which are expected to promote social development.
Although better outcomes in the social sector, like better education and
better health, also contribute towards economic development, this effect
would be indirect and take more time to be realized. The term General is
meant to distinguish these services from the other two kinds of services,
i.e. Economic and Social. E.g. interest payments, repayment of debt,
defence, law and order and pensions.

Social Sector: In the discourse on public policy in India, the terms Social
Services and Social Sector are used interchangeably. In the present
set of outputs, however, the term Social Sector refers to Reserve

26
Bank of India’s (RBI) definition of Social Sector. According to the RBI
(in its document – State Finances: A Study of Budgets), Social Sector
includes all Social Services, Rural Development, and Food Storage and
Warehousing.

State Own Tax Revenue: Every State Government mobilises its Own
Revenues from various sources. State Governments have been vested
with the powers to levy certain types of taxes and duties, which include:
Sales Tax (tax on intra-State sale of goods), State Excise (a duty on
manufacture of alcohol), Stamp Duty (a duty on transfer of property),
Land Revenue (a levy on land used for agricultural/non-agricultural
purposes), Duty on Entertainment and Tax on Professions.

State Own Non-Tax Revenue: State Governments can also mobilise

from Non-Tax Revenue. Interest receipts, Fees/User Charges, and
Dividend & Profits from Government Enterprises together constitute the
Non-Tax Revenue of the Government. For instance, if a State owns a
hospital and levies user fees, the revenue accruing from the same would
comprise part of the State’s Own Non-Tax Revenue.

State Plan Schemes: There are three different kinds of Plan Schemes,
which are implemented in any State, viz. State Plan Schemes, Central
Sector Schemes and Centrally Sponsored Schemes. The funds for
State Plan Schemes are provided only by the State Government,
with no ‘direct contribution’ from the Centre. However, the Centre
may provide, at the recommendation of Planning Commission, some
assistance to the State Government for its State Plan schemes,
which is known as ‘Central Assistance for State & UT Plans’. Unlike
the Centre’s grants to a State under central schemes, the ‘Central
Assistance for State & UT Plans’ cannot be tied to any conditionalities
of the central government ministries.

Total Central Transfers: Total Central Transfers to State Governments

include three components – Share of State in Central taxes, Loans from
Centre and Grants from the Centre. Grants comprise of both Finance
Commission-recommended grants as well as Planning Commission-
recommended grants.

27
NOTES:

28
NOTES:

29
NOTES:

30
31
United Nations Children’s Fund
India Country Office
UNICEF House
73, Lodi Estate B-7 Extn/110A (Ground Floor) Harsukh Marg
New Delhi- 110003 Safdarjung Enclave, New Delhi - 110029
Tel +91 11 24690401 Tel: (11) 4920 0400, 4050 4846
www.unicef.in www.cbgaindia.org
32