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By Anil Pradhan

It is known to all that India had faced the balance of payment problem in 1990. Odisha too faced the problem of over draft situation. The state government sought financial support from World Bank and DFID to over come this problem. These international agencies have got chance to dictate terms and conditions to the weak state government.

Odisha government has started pushing fiscal reforms since 1999 and taken several steps like freezing grants-in-aid to the education sector on the dictates of World Bank and DFID.

A meeting was held between the Union and state governments on April 15, 1999

to discuss various fiscal measures in the state. It was decided that the state will take immediate steps to determine user charges for other social and economic services such as school, college and university fees, water charges, health care fees, veterinary services, and irrigation rents. The state will issue government orders for raising the user charges for secondary and college education by July 1999.  

This was reflected when government presented a White paper on state finances in the state assembly in 2000. The white paper clearly stated, "The expenditure on general education was Rs.177.95 crores in the year 1984-85. It was 21.60% of the revenue receipt and 20.23% of the total revenue expenditure of the year 1984-85. The expenditure reached the level of Rs.1166.67 crores in the year 1997-98, accounted for 25.18% of the total revenue receipt and 21.07% of the total revenue expenditure on the year 1997-98. A single item of expenditure soaks one fourth of the revenue receipts of the state government. While three fourths of the receipt fails to absorb all other items of expenditure of all other departments. So, the revenue expenditure overflows the limit of revenue receipt. The expenditure on education therefore requires to be capped. ----"

"The state government's policy with regard to the salary structure of the non-Govt. Aided educational institutions and the policy directives concerning establishment of new schools and colleges need an urgent re-look, in view of the huge expenditure in the education sector. Unless the grant-in-aid frozen at a certain level by a change in policy or by legislation, the expenditure on education will devour the entire state revenues in the coming years……."

It will be worthwhile to mention here that " non-governmental aided institutions in the state play a crucial role as they  managed 74% secondary schools and 92 percent higher secondary schools in 1993 in Orissa. Non-government aided means here the schools managed by the community and government support them for teacher's salary and other administrative expenses". 

Consequently, World Bank and DFID started restructuring Odisha's administration and Odisha government accepted their terms and conditions unconditionally with the hopes that they will get a loan from the WB. With the help of DFID consultants, Odisha government prepared strategy documents to carry out structural adjustment programme in Odisha.

The Joint Technical Economic Mission of World Bank and DFID directed Odisha government in its AIDE MEMOIARE from May 8-13, 2000.

"One of the key fiscal issues in the education sector is the provision of grant-in-aid for salary payments to private schools (primary, secondary and Tertiary). After raising steeply in the early nineties, these were effectively capped in the mid-nineties by refusing to pay grants to any eligible schools not already receiving funds. However, in the last few years, these grant-in-aids have risen again on account of salary increases. These educational grants are unaffordable and inequitable, at least for secondary and tertiary education. There are three measures government could take to control grants:

Limit the potential liability by capping the number of schools and colleges eligible for grants.

Reduce the budgetary burden by capping grants to individual schools and colleges at their current nominal level.

Enforce current regulations to remove aid from poorly performing schools and colleges receiving grants. The first two measures will likely require legislative action. A cabinet sub-committee on education has prepared draft legislation for consideration."

If we analyse the functioning of Odisha government since 2000, it has been carrying out the instruction of joint technical economic mission of World Bank and DFID.   

Again from September 24-30, 2000, Joint technical mission in its AIDE MENOIRE said that "----- Hence measures should be considered to adopt criteria for screening the qualification of grant-in-aid institutions for continued support and measures be considered for eliminating support where quality educational services were not being provided while protecting support for high quality and deserving institutions."

One should note that the performance of  many schools is poor due to the shortage of teachers, in accessibility, poor monitoring  and various socio-economic reasons. If government will close these schools because the performance of these schools are poor, then the poor will be again deprived from educational rights?   

Odisha faces a number of challenges in the education sector that have become more pronounced due to the state's fiscal problems. While it is important to put the grant-in aid policy to private institutions accounts for less than 10% of the education budget (Rs 150 crores out of Rs 1700 crores, approximately). In particular, even during the period of fiscal adjustment, the priority that has been given in recent years to expand coverage and improve quality in primary education should not be undermined.

In the context of Odisha's fiscal problems, it would be extremely important to pay attention to measures to reduce unit costs across all levels of education. The government is considering measures such as the use of alternative schools (which have lower unit recurrent costs than formal schools) and para-teachers in elementary education…..

"….. the Government is considering various options for increasing user fees in education, the rates for which have not been adjusted in for over forty years and constitute a negligible source to financing. Recent experience with the self financing course in Orissa has demonstrated the willingness of students to pay very high fees provided they feel that quality services are provided in return ……".    

Here, several questions arises like  who will be beneficiary of self –financing course ? 47% of people live in below poverty line in Orissa.

The other recommendations of them for reducing financial burden are as follow:

 …. to prevent any new institutions from receiving grants and to gradually take posts that fall vacant off the list of positions that are eligible for grants…. among other measures to reduce costs, the government should consider the rationalisation of school education (specially avoiding setting up schools … "the redeployment of teachers" ….)

From this one can understand the role of World Bank and DFID in the education of Odisha. On the one hand, they talk about Education for All and Million Development Goal (MGD) and on the other hand, they dictate state government for freezing grants-in-aids in education.

A good education system is necessary as it plays a major role in the development of the society and state. A public debate is necessary to prepare a blue print for the education sector in Odisha.

The author works in the field of education. He has written this paper based on the research work done by Prof Abani Kumar Baral on the state education sector

Anil Pradhan