Fine print reveals a different picture of the Union Budget
Finance Minister, Pranab Mukherjee's budget belies the hope for building India's human capital
Though on the first view, the budget appears to be great for education, a closer look shows a bunch more. To start with, the process of education and procuring of material to support a student's studies is just about to become costlier.
Notebooks and exercise books, earlier exempted from excise duty, will now attract 1% duty without CENVAT credit facility. Also, a general effective rate of 5% has been prescribed for these items and facilities and this includes items such as fountain pen ink, ball pen ink, geometry boxes, colour boxes and pencil sharpeners. This implies that the MRP of each of these items is just about to increase. Paper will also not be exempt from excise duty anymore, thus eventually make text books costlier as well.
Most of the direct sops to educational institutions have been provided to institutes in poll bound states.
The increase for RTE is actually an effective Rs 2,000 Cr only, since the budget had been increased by Rs 4,000 Cr last year.
More importantly, the increase in outlay for primary education is just a Rs 3,000 Cr which effectively is a mere adjustment for inflation. The much larger and disturbing trend is that of this total amount of Rs 29,000 Cr, Rs 18,000 Cr comes from Prathamik Shiksha Kosh - the non-lapsable fund where 2% education cess is collected. The ASER report that we talked about earlier shows in fact exactly the correct trend and perhaps is also a forecast (in a manner ) of the way elementary education will continue to be treated in our country.
24% hike in outlay for Education in the Union budget
The government and the Finance Minister Pranab Mukherjee have considered education to be the key to reaping the benefits of the demographic dividend in the form of a young population. In the Union Budget for 2011, Mr. Mukherjee has announced a 24% hike in the budget allocation for education. "For education, I propose an allocation of Rs.52,057 crore, with an increase of 24 percent over the current year," Mukherjee informed the Lok Sabha while presenting the budget.
"Our demographic dividend, a relatively younger population compared to developed countries, is as much of an opportunity as it is a challenge. Over 70 percent of India will be of working age by 2025. In this context universalising access to secondary education, increasing percentage of our scholars in highereducation and providing skills training is necessary," he said.
The allocation for Right to Education (Sarva Shiksha Abhiyaan) was hiked by 40 percent. "The operational norms of Sarva Shiksha Abhiyaan have been revised to implement the right of children to free and compulsory education which came into force from April 1, 2010. For the year 2011-12, I propose to allocate Rs.21,000 crore which is 40 percent higher than Rs.15,000 crore allocated in Budget 2010-11," he said.
The finance minister also said that vocationalisaton of secondary education will be implemented from 2011-12 as a centrally sponsored scheme to improve employability of youth.
The minister also announced a scheme for scholarship for Scheduled Castes and Scheduled Tribes students in classes 9 and 10. "Empowerment flows from education. While the Scheduled Castes and Scheduled Tribes students have access to post-matric scholarship, there was so far a lack of pre-matric scholarship scheme." "In 2011-12, I propose to introduce a scholarship scheme for needy students belonging to Scheduled Castes and Scheduled Tribes studying in class 9th and 10th. This would benefit about 40 lakh students," the minister said.
KOOLSKOOL supplies permanent markers for M S Dhoni
KOOLSKOOL supplies permanent markers for Mahendra Singh Dhoni (MSD), India Cricket Captain, to sign autographs on World Cup 2011, memorabilia
We received a call late last night through someone we did not know looking for a particular type of permanent markers, which seemed to be listed only on our web site. The pens were required today (24th February). Gradually, as the conversations went on, we were told that these pens were specifically being procured for M S Dhoni, India Cricket Team Captain. Lot of late night calls happened, importers of this pen were woken up to verify availability.
Finally around noon, the stack of pens arrived. Invoices were made, the pens were tested for being able to leave a permanent mark on ceramic. They worked, without any smudges and dried almost instantly.
We located the team manager Mr. Parekh and delivered the set of pens to him. We realized that the pens were to be used for MSD to sign on memorabilia ceramic plates for World Cup 2011, which are to be given away as gifts and super high value merchandise.
Mr. Parekh tested the pens and they worked way better than the bunch of samples that he had obtained so far. He was thankful, and also was surprised by our ability to source something, somewhat difficult to find, that quickly and also be able to personally deliver.
But then, at KOOLSKOOL, we make things happen for the customer! Always!
...and we are delighted to be able to help the Indian Cricket Team.
ASER Report: Increasing dependence on private institutions
Private Schooling
The report shows that more children in the age group of 6-14 are going to private schools than ever before. The figures have increased by 2.5% from 2009 to 24.3% in 2010. In 2005, it was 16.3% nationally.
- The southern states show considerable rise over the last . For the same age group of 6-14, enrollment in private schools has increased from 29.7% to 36.1% in Andhra Pradesh, from 19.7% to 25.1% in Tamil Nadu, from 16.8% to 20% in Karnataka and from 51.5% to 54.2% in Kerala. Among other states, Punjab shows an increase from 30.5% to 38%.
- Private school enrollment for the same age group is low in Bihar (5.2%), West Bengal (5.9%), Jharkhand (8.8%), Orissa (5.4%) and Tripura (2.8%).
While the ASER reports finds the above, a very interesting trend in the country is the opening up of multiple chain schools with plans to open up 100 and above branches in the country. Many of these schools will be opened up in Tier 2- Tier 4 cities. Many of these cities are in close proximity to rural areas. But, not many of these schools are proposed in Bihar, West Bengal, Jharkhand, Orissa or Tripura. Most the schools are being planned in states which are relatively more prosperous. This phenomenon has an interesting consequence as you will read below.
Private Tuitions
- Nationally, there is not much change between 2009 and 2010 in the proportion of children who are enrolled in government schools and also take extra paid tuition classes. However there is a marked drop in the incidence of tuition among children enrolled in private schools across all classes till Std VIII.
- State like Bihar, West Bengal and Orissa have very low private school enrollments but high proportions of children enrolled in government schools who also take tuition classes e.g. in 2010, in West Bengal 75.6% of Std V children enrolled in government schools take tuition classes. This number for Bihar is 55.5% and 49.9% for Orissa. This seems like a very clear indicator for lack of high quality private institutions in these states.
So, the inferences are:
- People are very clearly moving away from government provided education, to the privately provided
- If they are unable to locate good enough private funded schools, then they get their children to take private tuitions
Inflation hits education now.
Inflation is rampant in the country right now. The government has chosen to de-roster some of the items from the CPI basket to show a lower inflation number. Food inflation in real terms is over 20% now. With all that, and fuels going costlier, the education sector can not remain far behind.
School managements are starting to consider and implement fee hikes by 10-25% now for the academic year 2011-2012. School managements are complaining that they are left with no choice but to increase fees because infrastructure costs, and salaries have gone up. Similarly, travel by school buses is expected to become costlier as well this year. Diesel has become costlier by about 20% over the last year.
Besides these books have already become costlier by about 5-8%, and notebook prices have already gone north by about 5%, and another increase of 5% expected after Feb 15th. Similarly, we are seeing a 5-10% increase in prices of shoes as well as school bags.
Bottom-line, "Back to School" will become dearer for parents next academic year.
Inculcating the reading habit
CBSE has issued a circular earlier this month, directed at heads of institutions with the aim of inculcating reading habits among school students. This circular is in continuation of CBSE's earlier circular from October 2009, and also provides a list of recommended books.
As one would expect, the list of recommended books covers a wide range of subjects and areas, and are from various publishers and authors. The list has many of Children's Book Trust books (thus keeping the prices low), and there are some authors who have seen more than one of their books being included in the list. However, again akin to any other government organization's work, low amount of research has gone into the availability of the books in the list. Many of the books are out of print, or at least not available in the market.
You will find the list of recommended books here.
ASER Report: RTE Vs Reality
Right to Education is a rather noble cause, but is it getting implemented right or are schools able to follow closely? It does not seem like at least in rural India. The basic framework, be it in terms of student to teacher ratio or even the basic infrastructure, is fundamentally weak.
Pupil to teacher ratio
| School Enrollment | RTE Std. | Number of Teachers on ground | ||||||
|---|---|---|---|---|---|---|---|---|
| 1 | 2 | 3 | 4 | 5 | 6 | >=7 | ||
| 1-60 | 2 | 42.5 | 27.5 | 30 | ||||
| 61-90 | 3 | 46.9 | 21.3 | 31.8 | ||||
| 91-120 | 4 | 57.8 | 17.1 | 25.1 | ||||
| >120 | 5 | 41.3 | 11.9 | 46.8 | ||||
Infrastructure
Per RTE, a school shall have an all weather building with the following facilities:
- At least one classroom for every teacher
- Office cum store cum head teacher’s room
- Separate toilets for boys and girls
- Safe and adequate drinking water facility to all children
- A kitchen where midday meal is cooked in the school
- Playground
- Arrangements for securing the school building by boundary wall or fencing.
- Teaching learning equipment: shall be provided to each class as required.
- Library: There shall be a library in each school providing newspapers, magazines and books on all
| % of Schools with | ||
|---|---|---|
| Building | Office/Store/Office cum store | 74.5 |
| Playground | 62.1 | |
| Boundary wall | 52.2 | |
| Drinking Water | No facility for drinking water | 17.4 |
| Facility but no drinking water available | 10.5 | |
| Drinking water available | 72.2 | |
| Toilet | No toilet facility | 10.1 |
| Facility but toilet not useable | 38.8 | |
| Toilet useable | 51.1 | |
| Girls' Toilet | % Schools with no separate provision for girls toilets | 29.3 |
| Of schools with separate girls toilets, % schools where | ||
| Toilet locked | 19.9 | |
| Toilet not useable | 14 | |
| Toilet useable | 36.8 | |
| Teaching Learning Material | Teaching learning material in Std 2 | 80.4 |
| Teaching learning material in Std 4 | 75.9 | |
| Library | No library | 36.9 |
| Library but no books being used by children on day of visit | 24.4 | |
| Library books being used by children on day of visit | 38.7 | |
| Mid-day Meal | Kitchen shed for cooking midday meal | 81.3 |
| Midday meal served in school on day of visit | 83.4 | |
It does clearly seem that there are miles to go before the current framework manages to catch up with what RTE prescribes or aims for. In an earlier post, we had mentioned the government's desire to get public sector units to fund many of these initiatives. The money could certainly come in handy to improve basic infrastructure, but teachers have to find it monetarily lucrative enough to remain in rural areas as well.
Consumer behaviour insights
Our exhibitions gave us some interesting insight into consumer behavior. At a high level:
- Environment makes a difference
- Fathers buy differently from mothers
- Technology awareness is still low
- Customer discretion plays an important part
- Customer centric assortment and merchandising is more important than ever
- Television influences purchasing patterns
Click on the slide (below) to read and know more from our preliminary findings.
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