Higher education outlay under-utilized during 11th Five Year Plan

Despite a serious lack of capacity in higher education and insufficient trained people to fuel growth, India used only a portion of the funds allocated for the sector in the five years ended March, a parliamentary panel has found. The country aims to spend Rs. 4.13 trillion on higher education during the 12th Five Year Plan period (2012-17), about four times more than the Rs. 849.43 billion allotted during the preceding five years, according to the panel’s report, but the substantial under-utilization can mar its intention.

“Not only the allocation at the BE (budget estimate) stage was below the projected outlay, but it had to be brought down further at the RE (revised estimate) stage with utilization status at the year remaining even lower,” the parliamentary standing committee on human resource development said in its report, tabled in Parliament on Wednesday. The panel said annual spending on higher education in the previous plan period was in some instances as low as 10%.

Distance learning, scholarship and ICT (information, communication and technology) was allocated Rs. 6.24 billion for 2007-08 but only Rs. 676.6 million was spent. In 2011-12, the sector was allocated Rs. 10.43 billion but used only Rs. 3.46 billion. The technical education segment spent only about Rs. 10.66 billion of the Rs. 32.40 billion allocated to it for 2007-08.

The university and higher education segment spent Rs. 45.14 billion against a budgetary allocation of Rs. 60.02 billion in 2011-12. During the entire 11th plan period, this segment spent only about Rs. 176.56 billion of the planned outlay of Rs. 474.44 billion.

This, when India’s gross enrolment ratio (GER) at 20% is below the global average of 26% and far behind that of some developed countries. GER is a measure of the number of young people in the 18-23 age group pursuing higher education in any country. Brazil’s GER is 34% and the US’s enrolment ratio is 83%.

The government has drawn a scheme to improve the skills of 500 million people by 2022, aiming to bridge the education-employability mismatch and provide enough foot soldiers to Indian industries and help grow the economy. India wants to improve its GER to 30% in a decade.

At a skill council meeting on 19 January, Prime Minister Manmohan Singh said India will need about 260 million skilled people by 2018. Skill training in India is a $20-billion business annually, according to a July report by Kotak Securities Ltd. Around 475 million people will need training by fiscal 2022, it said.

“This makes it clear beyond doubt that there are no fund constraints so far as allocation for higher education sector is concerned. What is required is well-constructed and co-ordinated approach for optimum and judicious utilization of allocated funds,” said the parliamentary panel, which is headed by Congress leader and Rajya Sabha legislator Oscar Fernandes. Congress general secretary Rahul Gandhi is a member.

The committee said state governments “have to play very critical role in this regard”. It also advised the Union government to “sensitize the concerned authorities for successful implementation of various centrally sponsored schemes”.

A Ministry of Human Resource Development (MHRD) official said the ministry was aware of the problem and wants all states “to come on board for making higher education a more impactful” sector. “Since the states play a key role in implementing schemes, they should be active in spending allocated funds,” the official said, requesting not to be named. “We will take this up during the (state) education ministers meet next month.”

Commenting on the Planning Commission’s 12th Plan approach paper, which states that about 18% of all government education spending, or 1.2% of the gross domestic product, be spent on higher education, the panel said the funding should be raised to 25% of all government education spending. “Higher education being an important sector for the development of the nation the committee feels that focused attention in terms of resources and funds should be made available for development and quality research and innovation,” the panel said in its report.

Source: Mint, May 11, 2012

Educational institutions set to follow ICAI norms

Higher education institutes in the country will soon have to report their financial information in a standard and uniform format set by the Institute of Chartered Accountants of India (ICAI). As per the format, the institutes will now have to disclose their balance sheet and the income and expenditure account. The new system is a shift from the present cash basis of accounting to accrual-based system.

While the balance sheet will include sources and applications of funds along with liabilities and assets, the income and expenditure statement would reflect the academic receipts, grants and donations. With education being a not for profit activity, the Ministry of Human Resource Development (MHRD) wants to enforce these standards in order to check how much profit the educational institutes are making.

“We want the institutes to keep their accounts and want to know if they actually are not-for-profit which they should be. The new accounting standards will be mandatory for all and we hope to implement it this year. Going ahead, we might introduce the accounting format for schools also,” said an MHRD official.

The move assumes significance as in the recent years, government aid to educational institutions particularly in the form of concessions and incentives has risen besides increased fees charged from the students and increased donations by certain donor agencies. “We already disclose our finances, which are audited by the Comptroller and Auditor General of India. The new accounting standards are very recent and we are still studying the new paradigm as depreciation will have to be included,” said IIT-Kanpur Director.

The present system of accounting and financial reporting followed by educational institutions does not meet the accountability concerns of the donors, including government and other stakeholders such as members, governing board, management staff, volunteers and general public as educational institutions in India follow not only diverse accounting practices but also different basis of accounting.

As per the new system, funds received by educational institutions may be divided into restricted funds, unrestricted funds which includes corpus fund, designated funds and general fund. “The new accounting standards will make it easier to understand and follow the balance sheets and make the entire system more transparent. Also, we are following the old system of accounting which need to be improved,” said Shekhar Chaudhuri, Director, IIM-Calcutta.

However, institutes feel that the new accounting norms would only add to their administrative load. “It would be better to reduce the involvement of human element and use some modern technological solution for accounting to do financial accounting accurately,” said an IIT professor.

Source: The Financial Express, May 11, 2012

MHRD pulled up for 35% vacant teacher posts

The shortfall of teaching staff in universities across States has drawn the attention of a Parliamentary panel which has slammed the Ministry of Human Resource Development (MHRD) for the “discouraging” situation. It says in 24 Central universities across 16 States, on an average 35 per cent of teaching posts are lying vacant.

The universities with a large number of vacancies include Delhi University, where nearly half or 919 of the 1,701 sanctioned posts are vacant. In Banaras Hindu University, there are no teachers in 848 posts, and in Allahabad University 285 posts are vacant.

The Standing Committee on HRD, in a report tabled in Parliament, took a “serious note” of these vacant posts, and pointed out that it may possibly mean young students are not attracted towards the teaching profession. “The Committee observes that the situation is quite discouraging at present,” the panel said.

Vacancies
The report says, of 77 the State universities, according to the data from 2007, 19 universities have more than 50 per cent vacancies, and in 14 other universities 40 per cent posts are vacant. Showing some leniency towards the newly formed Central universities, the Committee said a large number of vacancies in the Central universities formed in the last three to four years could be “justified to some extent”.

However, it questions the long-established universities as to why they have been unable to appoint teachers. “…either our young students are not attracted towards the teaching profession or the recruitment process is a prolonged one and involves too many procedural formalities,” the panel says.

The report also slammed the Government on delays in raising the salary scales of teachers in colleges and universities, saying “the improved package will undoubtedly help in attracting and retaining talented teachers, resulting ultimately in the improvement of quality of higher education”.

The non-utilisation of allocated funds by the Central university has also been criticised by the panel. It, however, adds that the proposed National Mission on Teachers and Training, which is to be launched in the 12th Five Year Plan, is a step in right direction, even though delayed.

Source: The Hindu Business Line, May 11, 2012