Education cess takes more than enough care of govt spending

The education cess is rapidly outstripping the Budget allocations for primary education with the latter getting smaller and smaller each year with the allocation for this year even less than 2004-05 when there was no cess.

A comparison with allocations made before the 2 per cent primary education cess was introduced in the Budget of 2004-05 shows how the funds have been falling ever since.

The Budget allocations for primary education last year, according to the revised estimates, was Rs 18,439 crore.

Of this, mid-day meal programme and Sarva Siksha Abhiyan account for Rs 11,128 crore. The latter amount was fully paid by the primary education cess of Rs 12,998 crore. So, the government's contribution for primary education in 2007-08 was Rs 5,441 crore. 
 

CESS-POOL
Year	Revised  estimate  for primary education	2% primary  education  cess	Govt  allocation  minus  cess
2003-04	5,219	No cess	5,219
2004-05	7,227	4,910	2,317
2005-06	11,219	6,975	4,244
2006-07	15,370	8,186	7,184
2007-08	18,439	12,998	5,441
2008-09 BE	19,777	14,844	4,933
(All figures in Rs/cr)

In the 2008-09 Budget, the share of cess in the primary education allocation of Rs 19,777 crore is Rs 14,844 crore.

If allocations for primary education before the introduction of cess are considered, then the figures are higher.

In 2003-04, the government's revised estimate for primary education was Rs 5,219 crore. In the following year when cess was introduced, the government spent just Rs 2,317 crore.

In 2005-06, the amount spent on primary education other than the cess remained low at Rs 4,244 crore. In the 2008-09 Budget, the allocation minus the cess is just Rs 4,933 crore, much lower than what the government spent five years ago.

"How does it matter? It makes no difference if the government spends more out of cess and less out of other funds also derived from the people as taxes," said S K Ray, finance advisor in the Ministry of Human Resource Development.