Unit VII Educational planning and financing

Unit VII Educational planning and financing

Five year plans: Educational policy making and budgeting - Funding systems of education: Public, fees, students’ loans, education chess and external aids.

Educational Planning

Planning is the process of preparing a set of decisions for action during a specific period of time to achieve a set of goals. Educational planning can be defined as ‘the process of setting out in advance, strategies, policies, procedures, programmes and standards through which an educational objective can be achieved”

Need for Educational Planning

Educational planning is needed to tone up the administrative machinery, to improve the infrastructure facilities of educational institutions, to increase teacher efficiency and involve the public in the development of education. The need for educational planning entails the following:

·         Planning is necessary for administrative decisions in education, for it aims at putting into action what educators deems to achieve.

·         Planning enables a nation to make its choices clear in terms of the aim and objectives.

·         Educational plans are designed to avoid in balances and enormous wastes

Significance of Educational Planning

·         Proper educational planning saves time, effort and money

·         Educational planning is essential for the best utilization of available resources.

·         It checks wastage and failure and contributes to the ease and efficiency of the administrative process in the field of education.

·         Planning in education is necessary for making one’s educational journey goal-oriented and purposeful.

·         Educational planning is highly essential for preparing a blueprint or plan of action for every programme of an educational institution or organisation

·         To bring total development of a nation in time, in which educational development is one among its various aspects.

·         To reflect the modern developments like explosion of knowledge, advancement of science and technology, development of research and innovation

·         Educational planning facilitates gathering of educational experts, teachers, supervisors and administrators for taking decision in relation to the realisation of purposes of educational programme.

Educational Financing

Financing is defined as the act of providing funds for business activities, making purchases or

investing. Financial institutions and banks are in the business of financing as they provide capital to businesses, consumers and investors to help them achieve their goals. The Education funding comes from many different sources. All allocation of funds to education should be determined by the educational budget and improvement of education should be made within the educational financing

The allocation of funds to education purely from the economic point of view- should be decided by the future needs of skilled man power in various sectors of national life.

Essential Principles of Educational Financing

·         Allocation of funds to education should be determined by the educational budget

·         Improvement of education should be made within the financial and human resources available in the country.

·         Enhancement of educational opportunities to all, a large number of scholarships, stipends and free studentship should be given to the students.

·          Special grants for physical activities, libraries and reading rooms, expenses on special programmes like mid-day meals etc., should be given.

·         The allocation of funds should decided by the future needs of skilled man power in various sectors of national life.

Five Year Plans: Educational Policy making and Budgeting:

From the commencement of economic planning in 1951-52, the education sector has remained the priority sector of the central as well as the state governments. In the first and subsequent five year plans, the government provided development finance to the States through the Planning Commission, to meet the capital needs of their education systems. A brief description of plan priorities with respect to education is as follows:

The First Five Year Plan (1951-56)

The First Five Year Plan emphasized universalaization of primary education and strengthening of the secondary education. It aimed to achieve 40% to 60% enrollment of those aged up to 11 years in 1950. Total planned budget was Rs.2069 crore. It was allotted 16.74% for Social activities including Education

Five Indian Institute of Technology  (IITs) were started as major technical institutions. The university Grants Commission (UGC) was set up to take care of funding and take measures to strengthen the higher education in the country.

Second Five Year Plan (1956-1961)

The Second Five Year Plan laid stress on basic education, expansion of elementary education, and diversification of secondary education. The following were the highlights for the Second Five Year Plan:

•      Launched Indian Statistical Institute, Atomic Energy Commission and Tata institute of fundamental Research

•      Allotment of money for education is 307 crore

•      Primary education :89 crore

•      Secondary education : 51  crore

•      Higher education: 57 crore

•      Educational  technology and vocational education: 48 crore

•      Social education:  5 crore

•      Administration: 57 crore

•      The Tata Institute of Fundamental Research and Atomic Energy Commission of India were established as research institutes.

•      In 1957, a talent search and scholarship program was begun to find talented young students to train for work in nuclear power

•      The number of Students Enrolment in Primary education increased  in 264.6 to 406.3 lakhs

•      No.of schools for Primary Education increased  in 278.13 to 342 thousands

Third Five year Plan: (1961-1966)

•      Allotment of money for education in third plan was 400 crore

•      The Third Five Year Plan envisages increase in the number of primary schools by 73,000, of middle schools by 18,100 and of high schools by 5,200.

•      State Secondary Education Boards were formed.

•      Education Commission (1964-66) was appointed to advice ‘on the national pattern of education and on the general principles for development of education at all stages and in all respects’. 

Plan Holidays (from 1966–69)

 The main reason behind the plan holiday was the Indo-Pakistan war & failure of third plan.

Fourth Five Year Plan:  (1969-1974)

At this time Mrs. Indira Gandhi was the Prime Minister. Incorporating the recommendations of the Education Commission, the Fourth Five year plan aimed at providing free and compulsory education up to the age of 14. It was stated that “Facilities for universal elementary education are pre-requisite for equality of opportunity.”  The fourth plan also focused on for higher education: The highlights of the Fourth Five Year Plan are as follows:

·         Nationalization of 14 banks

·         Pokran I Nuclear test

·         Allotment of money for education from Central 271, state 499.89 and union territories 51.77crore

·         Importance to Science and technology

·         Focused on In-service training, Curriculum reform and  preparation of books

The Fifth Five Year Plan (1974 to 1979)

The Fifth Five Year Plan laid emphasis on ensuring equality of opportunities as part of the overall plan of ensuring social justice. Following are the Fifth Five Year Plan highlights:

•      Allotment of money for education was 1284.29 crore

•      Allotment of money for Elimentary and Middle school was 742.8 crore

•      Focused on increasing the employment opportunity, eradicating poverty and social justice

The Sixth Five Year Plan (1978-83)

The basic objective of this plan was poverty eradication and technological self reliance. The Sixth Five-Year Plan marked the beginning of economic liberalization. Following are its highlights:

·         Allotted  more money for higher education

·         It was proposed that universalisation of primary education (for the age group 6-11) would be achieved by the end of the plan (1985) and universalisation of upper primary level (11-14) by 1990.

The Seventh Five Year Plan (1985-90)

Rajiv Gandhi as the prime minister and the plan laid stress on improving the productivity level of industries by upgrading of technology.

The main objectives of the Seventh Five-Year Plan were to establish growth in areas of increasing economic productivity, production of food grains, and generating employment through “Social Justice”. For the first time the private sector got the priority over public sector. Its highlights are

·         Universalaization of elementary education will continue to be part of the Minimum Needs Programme

·         Special care was taken to spread education among girls

·         The objective is sought to be achieved through a combination of formal and non-formal methods, focusing sharply on the needs of girls and of children belonging to the economically and socially weaker section

·         The plan was very successful; the economy recorded 6% growth rate against the targeted 5%.

Annual Plan (1990 – 1992)

The Eighth Five Year Plan (1992-97):

In this plan the top priority was given to development of the human resources i.e. employment, education, and public health. During this plan Narasimha Rao Govt. launched New Economic Policy of India. It was the beginning of liberalization, Privatization and Globalization (LPG) in India. The following were the highlights of the Eighth Five Year Plan on Education:

·         Universalaization of elementary education,

·         Eradication of illiteracy in the age group of 15 to 35

·         Strengthening of vocational education

·         Focused on girl’s education and women's literacy which has a beneficial impact on children’s literacy as well as other national objectives like population control and family welfare.

·         Special attention was paid to increase retention, improvement of quality, specification of minimum levels of learning (MLL) and their attainment by the learners.

The Ninth Five Year Plan (1997-2002):

The Ninth Five-Year Plan came after 50 years of Indian Independence. Atal Bihari Vajpayee was the prime minister of India during the Ninth Plan. Special Action Plans (SAPs) were evolved during the Ninth Plan to fulfill targets within the stipulated time with adequate resources. The SAPs covered the areas of social infrastructure, agriculture, information technology and Water policy. Following are its highlights:

·         Primary education was a major thrust area during the 9^th Plan. It was estimated that there would be an additional enrolment of 2.5 crore children at the lower primary stage and 1.6 crore children at the upper primary level.

·         It was targeted that 75000 additional rooms /buildings will be constructed at the elementary stage.

·         2, 36,000 teachers will be appointed additionally at the lower primary level and         1, 75,000 teachers at the upper primary level.

·         There were equity concerns like low enrolment of girls, educational requirements of special need groups, like SCs/STs, OBCs, minorities, disabled children, working children, children from disadvantaged locations like deserts, hilly, coastal and deep forest areas, children from migratory families etc.

The Tenth Five Year Plan (2002-2007):

The Tenth Plan targets in respect to elementary education were:

·         All children in the 6-14 age groups should have access to primary schools, upper primary schools or their alternatives within a walking distance of one Km and three Kms. respectively.

·         There should be one upper primary school for every two primary schools. 

·         All schools should have buildings, toilets, drinking water, electricity, playgrounds, blackboards and other basic facilities.

·         There must be provision of one classroom for every teacher at the elementary stage.

·         Enrolment of all children in schools or alternative arrangements by 2003

·         All children to complete five years of primary schooling by 2007, Universal retention in the primary stage by 2007

·         Dropout rate to be reduced to less than 10 percent for grades VI-VIII by 2007.

·         Improve the quality of education in all respects to ensure reasonable learning outcomes at the elementary level, especially in literacy, numeracy and in life skills.

·         Bridge all gender and social gaps in enrolment, retention and learning achievement in the primary stage by 2007 and reduce the gap to 5 percent in the upper primary stage by 2007.

·         Although the Tenth Five Year Plan recommended that the outlay by the central government on Sarva Shiksha Abhiyan (SSA) during 2002-03 to 2006-07 should amount to Rs 17000 crore, it remained short of funds till 2004-05.

The Eleventh Five-Year Plan (2007–11):

It was in the period of Manmohan Singh as a prime minister. Plan focuses on education with objectives of reduce dropout rates and develops minimum standards of educational attainment in elementary school, and by regular testing monitor effectiveness of education to ensure quality, increase literacy rate. Highlights of this plan are as follows:

·         It aimed to increase the enrolment in higher education of 18–23 years of age group by 2011–12.

·         It focused on distant education, convergence of formal, non-formal, distant and IT education institutions.

·         Rapid and inclusive growth (poverty reduction).

·         Emphasis on social sector and delivery of service therein.

·         Empowerment through education and skill development.

·         Reduction of gender inequality.

·         Environmental sustainability.

Twelfth Five Year Plan (2012-17):

Twelfth five year plan focuses on universalaization of elementary educations.

The twelfth five year plan has total gross budgetary support of Rs 3,43,028 crores to school education and literacy, out of this, share for SSA is Rs. 1,92,726 crores, for MDM,  Rs. 90,155 crores, for RMSA Rs. 27,466 crores and for other components is Rs. 32,681 crores.

The objectives of the Twelfth Five-Year Plan were:

·         To create 50 million new work opportunities in the non farm sector.

·         To remove gender and social gap in school enrolment.

·         To enhance access to higher education.

·         To reduce malnutrition among children aged 0–3 years.

·         Integration of pre-school education into schooling especially in the government schools. Funding for pre-school children under  ECCE,

·         Stepping up provision of infrastructure through convergence with schemes strengthening of monitoring and evaluation mechanism

Funding systems of education:

Sources of Fund for Education in India categorize as External Internal Sources, Public Private Fees, Endowment Donation and funds from Central Government, State Government, District administration, Municipalities and Panjayath

The Funding systems of education in India is coming under Public Funding, funds from fees, students’ loans, education chess and external aids.

i.               Public Funding:

Funds for education were distributed from Central Government, State Government, District administration, Municipalities  and Panjayath through Finance Commission on the basis of the allotment by the Planning Commission

Planning Commission

Planning Commission was established during 1950 when the Five-Year Planning Process was launched. All Plans are discussed and finalized by it. The Level of plan expenditure by state and central govt. is determined by it. The Programme and their goals to be realized

Finance Commission

The Finance Commission takes care of the transfer of non-plan resources between the centre and states. The Finance Commission in India is a statutory body appointed by the President of India once every five years. It makes its recommendation on the distribution of resources

Procedure for Fund Allocation

The Finance Commission receives detailed statements from the states of their requirements for each head of account including the details of receipts and expenditures. The Finance Commission, in its turn, reassesses these state forecasts and recommendations for an allocation of resources to be made.

      ii.           II.  Fees: Student fee is a fee charged to students at a school, college, university or other place of learning. It may be charged to support student organization or activities or for intercollegiate programs such as intramural sports or visiting academics. Fees may collected as a means to remedy shortfalls in state funding.  At Public University or college, further fees may be charged for features and facilities such as insurance, health and parking provision.

    iii.            Students’ loans: An education loan covers the basic course fee and other related expenses such as college accommodation, exam and other miscellaneous charges. Presently, the banks do not ask for any collateral or third-party guarantee for loan up to Rs 4 lakh. For loans above Rs 4 lakh up to Rs 7.5 lakh, a third-party guarantee is required. Collateral is asked for loan exceeding Rs 7.5 lakh. Once the loan application is accepted, the banks disburse the amount directly to the college/university as per the given fees structure.

Interest rate: The banks uses the Marginal Cost of Funds based Lending Rate (MCLR), plus an additional spread to set an interest rate. Presently (in 2017), the additional spread is in the 1.35-% range.

Repayment: The loan is repaid by the student. Generally, the repayment starts when the course is completed. Some banks even provide a relaxation period of 6 months after securing a job or a year after the completion of studies for repayment. The repayment period is generally between 5 and 7 years, but can be extended beyond that as well. During the course period, the bank charges simple interest rate on the loan. The Ministry of Human Resource Development implements Central Scheme of Interest Subsidy for Education Loans (CSIS)

Vidya Lakshmi: Vidya Lakshmi is a portal for students seeking Education Loan. This portal has been developed under the guidance of Department of Financial Services, Department of Higher Education and Indian Banks Association. Students can view, apply and track the education loan applications to banks anytime, anywhere by accessing the portal.

    iv.            External Aids: At the request of the Indian government, the World Bank has announced plans to increase its support to India. The bank’s programming will focus on expanding access to education, health care and other basic services. Apart from world bank, India also got financial aid from Japan, Germany, Asian Development Bank, United Kingdom, France, United States and European Union