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Wednesday, March 4, 2015

Union Budget for Technical Education

The budget for the financial year 2015-16 was announced a few days ago. I looked at the technical education part of the budget and here are the top level numbers:

                                      Plan                Non-plan        Total (in crores)
2013-14 Actuals            6581               2655                9236
2014-15 BE                   6385               3078                 9463
2014-15 RE                   5544               3068                 8612
2015-16 BE                   5996               3296                 9292

BE is budgetary estimates (what is decided at the beginning of the year)
RE is revised estimate (what is likely expenditure based on first 10-11 months of expenses)

The budget reflects the tight financial situation our country is in. (I certainly do hope that it does not reflect a reduced priority for technical education.)

Overall, in the next financial year, we are expecting to spend the same amount of money that we spent in the previous financial year. If we look at the non-plan budget, it has kept pace with inflation, and to some extent with the increase in student strength. However, the plan budget is a big disappointment. There is actually a 9% reduction from what we spent in the last year. And remember, the IITs and other institutions announced in the last 6-7 years are now in the peak of their construction, and several more new institutions have been announced in this budget and the previous budget. The inflation in these two years will be around 13%. Most of the institutions (including IIT Kanpur) have not yet built sufficient infrastructure to handle the 54% student increase effected between 2008 and 2010. Now that will further get delayed. And note that the PhD assistanship (which is charged to plan budget) has been hiked by 50%. That too has to be accommodated in this budget.

The problem of IITs is more pronounced. The plan budget has gone from 2363 crores (2013-14 actual) to 2160 crores (2014-15 revised estimate) to 1835 crores (2015-16 budget estimates). The non-plan budget received an inflation-adjusted and student-intake adjusted hike in the current year (1334 crores to 1586 crores), but increases to only 1704 crores, which barely takes into account the expected inflation, but doe not take into account the larger number of students and faculty. I guess, this is a good thing as IITs would be under pressure to think of alternate sources of revenue, including gifts from well wishers, CSR, higher user charges from facilities like hostels, and also, they will be under pressure to become more efficient in doing things.

Other technical institutes continue to suffer from poor budgets. The per capita budget (whether plan or non-plan) of NITs and IIITs is significantly less than IITs. The quality of technical education will not improve in the country by just creating more IITs. One needs to improve the quality in all existing institutions, in addition to opening new institutes.


Ankur Kulkarni said...

I don't understand the nuances of the budget myself, so I have been relying on articles discussing it. It seems like most articles are quite happy with the budget as far as education goes. See e.g.,

How do I reconcile this with what you are saying, which is also reasonable?

iitmsriram said...

Dheeraj, "However, the plan budget is a big disappointment. There is actually a 9% reduction from what we spent in the last year" is not not something one can agree with. BE entries can be safely ignored as they essentially represent "what could have been". If we look at 2013 - 14 final (actuals), 2014 - 15 RE and 2015 - 16 BE, the plan funding trend is 6581 - 5544 - 5996. For some (unknown) reason, our expenditure in current year is lagging and next year's BE represents a nominal (about 8%) INCREASE over current year spending.

Coming to IITs, yes, the trend is opposite, it has been going down from 13 - 14 actual to 14 - 15 revised to 15 - 16 budget. However, I am not sure how bad this will be for the old IITs. A large portion of the capacity expansion related construction should be over by now and that is where the bulk of the spending is (at IITM, hostel expansion is more or less finished, academic area expansion is perhaps 75% done and essentially only quarters expansion is pending). I understand the new IITs are bearing the brunt of the cuts with only limited cuts at the old IITs.

Dheeraj Sanghi said...

@Ankur, the report is about the budget speech and a lot of things which are not part of technical education budget. While I am looking at actual budget numbers. So the report is positive about the fact that a lot of new institutions are going to be opened, while I am seeing that the institutions are being given less money than before.

Dheeraj Sanghi said...

@Sriram, The reason for reduced expenditure is known. The government's revenue collection is poor, and hence it is not giving money to the institutes to spend. What I am concerned about is that this reduced plan budget is not a one-off event. It is not that something major happened in this year like no rains, a war, and the world coming to an end, and thus the expenditure was reduced. It is not being restored properly. The next year, we are being given only inflation increase from this year, which due to a lower base is insufficient (and that too with the assumption that the economy will grow at 8 percent, and revenues will grow at 13 percent, something that does not seem easy, and certainly there is no hope of numbers going further up during the year).

Giri@iisc said...

Why are the scholarships charged from the plan grant but the salaries are charged from the non-plan grant? Any particular reason for this?

iitmsriram said...

Scholarships also used to be in the non-plan grant but a few years ago, the Ministry decided that scholarships would be brought under plan funding as the expenditure can be classified as "asset building". Staff salaries are hard to classify as anything but revenue expenditure. Here is the PIB announcement on this.

New IITs get all their funding through plan, don't know for how many years.