Opinion: Who pays India's education subsidy?

Hyderabad, Telangana, IndiaWritten By: Ashish NarediUpdated: Jan 05, 2018, 08:33 AM IST

We need to ask the government as to how it expects the school or the parents to pay a fee that it, by its own admission, finds exorbitant and unaffordable? Photograph:(Others)

The Right to Education Act has been extensively analysed and commented upon in the 9 years since the Act was passed in 2009. Yet, there is one aspect of the Act that has largely escaped scrutiny. This is the aspect of how the government surreptitiously shifted the burden of subsidy, arising from this Act, to the unsuspecting common citizens without any information or notice to them. 


The public is generally aware that around 25% of the seats in the schools are to be given free of charges to the Economically Weaker Sections (EWS) category of students. The fee for this 25% of the EWS students, it is believed, is getting reimbursed by the government. However, the public is totally unaware of the fact that the government, unable to bear this burden of subsidy, has transferred it, under a maze of rules, to the parents of students who occupy the unreserved 75% seats in the school. 


This step besides being treacherous and immoral is also perhaps illegal as the Hon’ble Supreme Court has, in multitude of its judgements, clearly specified that it is the government which has to bear the burden of subsidy and that it cannot shift it to either the parents or the schools. Yet, the burden has been shifted.


The public needs to know and understand that while the fees schools charge varies anywhere from a few thousand rupees to a few lakhs, the amount reimbursed by the government, is fixed and ‘meagre’. The reimbursed amount has very little to do with the actual fees being charged. For instance, a school in Delhi may be charging 1 lakh rupees as the fees from the unreserved category of students. The government, however, will pay this school a fixed amount of only Rs. 19,176 per student for each of the students admitted to the  25% Reserved Category. This gives rise to a deficit of Rs. 80,824 per student ((Rs. 1,00,000 – 19,176 = Rs. 80,824). 


Who is to foot the bill for the deficit?


No matter what the government, the courts or the schools might say to the contrary, the burden of this deficit has from the beginning been passed on to the remaining 75% unreserved category students.  In the above example, it works out to an additional burden of Rs. 26,941 per student in the unreserved category. 


See Calculations in the table given below:

Education subsidy (Others)


It may be noted that the amount of reimbursement under RTE in Delhi is on the higher side. In Mumbai it is Rs. 17,329 per student and in Karnataka around Rs. 16,000 per student. Hence, the burden of subsidy shared by parents would be much higher in these cities. The lesser the reimbursement, the higher is the subsidy paid by the parents. You may immediately want to check the amount of reimbursement in your state and school.


Not, perhaps, satisfied with such duplicity, some of the governments, like one in the state of Karnataka are planning to stop all reimbursements under RTE and are expecting the schools to absorb this additional burden. If only the governments were as conscientious as they claim to be and the schools as philanthropic as the law expect them to be, India would be a much better place and parents would not be agitating against the increasing burden of school fees across India.


To gauge the level of awareness amongst the parents about this aspect, I checked with parents’ associations across India. With the notable exception of HSPA from Hyderabad, none of the associations in other cities seem aware of these facts. Some of them who are aware are advocates who quite facetiously seem to believe that the “Schools are absorbing the additional burden!” If this is the level of awareness and understanding amongst the parents’ associations, one can imagine the awareness amongst the general public.


The government is able to carry out this charade because of a clever play of words in the RTE Act which fixes the amount of reimbursement in terms of per capita expenditure of the government on education. 


See extract from the RTE Act:

Excerpts from RTE Act (Others)


You might be surprised to know but there is no standardised method or process of calculation of this per capita expenditure. There is a great amount of ambiguity and variations from state to state on what amounts are to be included as expenditure and who should be fixing this amount of reimbursement. The grants given to the aided schools, which form a substantial part of the state education expenditure, for instance, are not included in the government expenditure at all for these calculations.


From the above analysis, it seems as if the governments, both past & present, have been pulling a fast one on the people. We need to ask the government as to how it expects the school or the parents to pay a fee that it, by its own admission, finds exorbitant and unaffordable?


9 years have passed since the passage of the Act and with substantial data available both for and against the act, it is time, at the very least, for the government to initiate a detailed review of the Act to make necessary changes and modifications towards its improvement. 


(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL).