Need to Relearn Lessons on SSA Fund Flows

Via livemint.com

The casual budget observer could interpret the last decade as a bonanza for elementary education funding in India. Elementary education now constitutes 44% of the government’s education budget with allocations having risen in excess of fivefold since the launch of the Sarva Shiksha Abhiyan (SSA) in 2001.

But closer scrutiny shows a sobering truth—that these large allocations have been spent poorly. Countrywide expenditure trends show that more than two-thirds of SSA funds are spent in the last few months of the fiscal year. Worse still, significant portions of the funds never get spent. In 2008-09, SSA started the fiscal year with an opening balance of Rs8,713 crore. At the end of the year, only 70% of the available funds had been spent.

The problem begins at the school level. Only 75% schools reported receiving their grants in 2008-09. This year, between October and December, when the survey was conducted, at least 50% schools had not received any money—a clear indication that funds flow slowly through the system and money arrives towards the end of the year.

Delays and lapses have important ramifications on the quality and effectiveness of expenditures. Unpredictable fund flows result in a mismatch between needs and expenditures. So, if a school needs funds to fix a leaky roof before the monsoon, but the money only arrives in December, the specific requirement remains unfulfilled. Late arrival of funds also results in schools rushing to incur expenditures to meet reporting deadlines without giving adequate consideration to specific needs and plans. Consequently, funds get spent poorly and often remain unspent.

All this creates perverse incentive structures that make accountability almost impossible. Precisely, to create local accountability, the SSA guidelines mandate the creation of education committees (at the school or panchayat level) tasked with monitoring expenditures and making plans. These plans are, in turn, aggregated at the district level and meant to be the basis of annual allocations and expenditures. But when funds don’t arrive or when they arrive so late they can’t be spent to meet the needs, plans become irrelevant, creating disincentives for meaningful citizen participation.

Read the entire article here.

Image Source : UrvishJ