NEW DELHI - The government’s allocation in the education sector has steadily increased but how effectively is the money being spent? - a policy research organisation questions in a recent assessment ahead of the budget in July.

The total expenditure on education (by all ministries) has increased by nearly 50 percent from Rs.89,732 crore (Rs.897.32 billion) in 2003-04 to Rs.134,274 crore (Rs.1.34 trillion) in 2006-07, according to the Accountability Initiative under the Centre for Policy Research here.

However, the findings suggest that allocation is not in tune with expenditure.

Currently, the Prarambhik Shiksha Kosh (PSK) - a tax-on-tax paid by the general public - provides over 60 percent of the funds for the two largest schemes in school education sector: the Sarva Shikhsa Abhiyan (SAS) and the Mid-Day-Meal (MDM) schemes, a report Budget Briefs by the organisation said.

The catch is that the PSK fund is a non-lapsable fund - that is, the money received in a given financial year but not spent, stays put and can be spent at a later stage.

The paper said the spillover funds are not factored into the annual planning process, resulting in a mismatch between what is spent and what is allocated - or the expenditure-allocation (E-A) ratio.

The E-A ratio has shown steady improvement. However, in 2006-07, 30 percent of allocated funds remained unspent. In 2007-2008 expenditure exceeded allocated funds of SSA by 8 percent, indicating that spillover funds were spent in 2007-2008, the report further said.

Similarly, in 2007-08, 22 percent of allocated funds remained unspent.

This is a cause for concern because the gap reflects on huge delays in release of funds from the central and state governments to the implementing agency.

According to the Accountability Initiative, the state-wise categorisation for the year 2007-2008 found that Karnataka and Rajasthan topped the list by spending 90 percent and 83 percent respectyively of what was allocated and 90 percent of the funds were released.

Meanwhile, states like Assam, Bihar and Gujarat were at the lowest rung. While Bihar spent under 50 percent of what was allocated, Assam and Gujarat spent 59 percent and 69 percent respectively of what was released.

Expenditures are not uniform across the year. Spending rushes are noticed towards the last quarter of the financial year, the report said.

Reasons cited are that the state governments do not release funds in time or the implementing agencies are inefficient and only wake up to expenditure at the end of the year before the reporting process begins.

It is important to systematically address these inefficiencies if increases in allocation are to lead to better outcomes in education, the report said.