TATA INSTITUTE SOCIAL SCIENCES, HYDERABAD

SCHOOL OF PUBLIC POLICY AND GOVERNANCE

DOING PUBLIC POLICIES- A PRACTICUM

MID-SEMESTER ASSIGNMENT

SUBMITTED TO: PROF. ASEEM PRAKASH

SUBMITTED BY-

TANISHA SHAKYA
PUBLIC POLICY AND GOVERNANCE
ENROLLMENT NO.: h2021ppg033
SEMESTER: IV

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 MID SEMESTER - DOING PUBLIC POLICIES
A. Define the Problem/ Concern(s)/ Issue that emerges from your policy research.
B. Analytically bind the findings of your policy research.
C. What are the reasons that cause gaps/concerns/ policy dysfunctionality in your chosen
area of policy intervention.

PUBLIC PROVISIONING OF HIGHER EDUCATION IN THE STATE OF BIHAR

The research aims to analyse the trend of Public Provisioning of Higher Education in the state
of Bihar. Public Provisioning of Higher Education is crucial in the understanding that higher
education does not only produce benefits for individual university graduates but also
contribute through their abilities and contributions to the labor market and the overall
economy. This is crucial—through their civic engagement, improved health outcomes, and
other broader contributions to society that, have measurable value to both society and the
economy (Altbach et al, 2021).

A particular investigation is required to be made in the State of Bihar. Bihar is one of the
most populous states in the nation with 46.9 percent of its population below the age of 25.
Bihar also ranks fourth (19.2 percent) in higher education enrolment throughout the nation.
Even with the enrolment rate, the state still has a sizeable population not availing higher
education and high rates of unemployment. The major concern identified is the steady
withdrawal of the state from public provisioning of higher education. The withdrawal has
been identified in several components of higher education as state gradually deprioritizes
sector of higher education.

Public Provisioning of Higher Education in the state of Bihar is different than what one might
assume. The percentage of higher expenditure to aggregate expenditure is higher than
compared to the rest of the Indian states. Similarly, the percentage of higher education budget
as a proportion of GSDP is also higher than in the rest of the states.

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 TABLE 1

%
Expenditure
on Higher
Education to % Expenditure on higher
Aggregate education to Gross State
Year Expenditure Domestic Product (GSDP)
2012-2013 4.70 1.05
2013-2014 5.59 1.32
2014-2015 4.14 0.97
2015-2016 3.85 0.89
2016-2017 3.40 0.80
2017-2018 4.30 1.20
2018-2019 4.02 1.20
2019-2020 5.23 1.22
2020-2021 3.70 0.99

As observed in Figure (1), with an increase/decrease in the percentage share of higher

education to GSDP there is an increase/decrease observed in the percent

Relationship between HE as % of GSDP and Aggregate

Expenditure
6.00 5.59 5.23
5.00 4.70 4.30
4.14 3.85 4.02
4.00 3.40 3.70
3.00
2.00 1.05 1.32 0.97 1.20 1.20 1.22 0.99
0.89 0.80
1.00
0.00
2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020-
2013 2014 2015 2016 2017 2018 2019 2020 2021

% Expenditure on Higher Education to Aggregate Expenditure

% expenditure on higher education to Gross State Domestic Product (GSDP)

FIGURE I

expenditure of higher education to aggregate expenditure as well. This reflects that both
variables are directly and positively proportional to each other. Hence, the state of Bihar
follows a pro-cyclical fiscal policy. This higher percentage implies that, in relation to the
capacity to finance education expenditure, the state government practices incremental
investment.

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It shows that so far as budgetary effort is concerned Bihar government has been
prioritizing budgetary allocation for higher education, although this is becoming
increasingly difficult for the state to maintain a constant average for the same. The
government increases and decreases the allocation in accordance with the GSDP of the
state, hence the budgetary expenditure on higher education is susceptible to economic
fallouts, unlike primary and secondary education. The fluctuations are drastic. The major
findings realised upon analysing the budget expenditure of Bihar are as follows-

1. Cyclical Nature- The state’s total higher education expenditure is pro-cyclical with the
total budgeted expenditure and GSDP of the state. This signifies that higher
educational expenditure is prioritised in accordance with the state’s capacity to
generate revenue or financial capability.

2. Post Matric Scholarships and Schemes for SC, ST, and OBC- The two critical issues
identified were irregularity in scholarship allocation and the transition from unilateral-
based to loan-based higher education financing.

Post Matric Scholarships and Schemes for SC, ST, and OBC are significant
components affecting the budget allocation for the last the 10 years. The state
government allocation to post-matric scholarships and schemes for ST, SC, and OBC
has no identifiable trend. These scholarships are distributed across five heads of
Universities and Higher Education, Technical Education, Development of SC, ST,
OBC, and Agriculture research and education. These scholarships were provided in
cash to the beneficiaries by the state government.

As given in figure II, the scholarships in the 10-year trend have recorded drastic
fluctuations. The trend can be divided into two time periods- 2011 to 2017 and 2018-
2020.

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 Chart Title
500.00%

401.48%
400.00%

259.95%
300.00%
5 6 7 8 9 10
200.00% 4
3
100.00% 2 39.38% 60.99% 32.19%
23.85%
1
0.00% -30.69%
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
-54.37% 2018-19 2019-20 2020-21
-100.00% -79.02%

-200.00%

FIGURE II

The following table represents the heads that registered the increase and decline of
government expenditure in terms of scholarships.
TABLE 2
Year Major Head Minor Head Change
2013 (Increase) Development of SC Post-Matric Scholarship 666.02 percent
Entrance Education 31147.7 percent
Development of OBC Post-Matric Scholarship 59 crores of new
allocation
2014 (Decline) Development of SC, ST, OBC, and Minorities recorded a decline of 93.6 percent
with no post-matric scholarship awarded across the categories
2015 (Increase) Development of OBC Post Matric Scholarship 102 crores
Umbrella Scheme 44 crores
2016 (Decline) Special schemes for SC under Agriculture, Research, and Education witnessed an
increase of 240.37 percent.
No allocation otherwise. Allocation to Gardening as the course has been
terminated
The year marked the introduction of the Bihar Credit Card Scheme
2018 (Increase) Development of SC Post Matric Scholarships 7 crores
Assistance to Gram 90 times increased
Panchayat allocation
Umbrella Scheme 56.4 percent
Development of OBC Post-Matric Scholarship 57.4 percent

Since the inception of the Bihar Student Credit Card Scheme, the scholarships have registered
a de-growth and constant decline further. However, the years from 2018-2020 registered an
increase in the enrolment rates in higher education.

3. Capital and Revenue Expenditure: - In the state of Bihar higher education expenditure
revenue expenditure has maintained a higher percentage than capital expenditure in both

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percentages as well as absolute numbers. Revenue expenditure has registered an average
expenditure of INR Rupees 4700 crores or 47 billion, while average capital expenditure is
680 crores throughout 10 years.

The years 2013, 2016, 2018, and 2021 have registered a higher allocation to capital
expenditure, under the following heads –

TABLE 3

Year Major Head Minor Head Sub-Major Heads Allocation

2013 Capital Outlay for Education, General Universities and Higher 175 crores
Sports, Art and culture Technical Education
Expenditure on Medical Medical Allopathy 2,000 crores
Education, Education,
Training and Research Training and
Research
2016 Capital Outlay for Education, Technical Polytechnic colleges 94 crores
Sports, Art and culture Education
Expenditure on Medical Medical Land 20 crores
Education, Education,
Training and Research Training and
Research
2018 Capital Outlay for Education, Technical Polytechnic colleges 121 crores
Sports, Art and culture Education
Engineering/Technical 403 crores
Colleges
and Institutes
Expenditure on Medical Medical Land 121 crores
Education, Education, Allopathy 270 crores
Training and Research Training and
Research
2021 Capital Outlay for Education, Technical Engineering/Technical 731 crores
Sports, Art and culture Education Colleges
and Institutes

The increase in capital expenditure has accounted for Land for the construction of hospitals,
allopathy, and the construction of polytechnic and technical colleges. The state has increased
the revenue allocation under the heads of scholarships, salaries, and pensions. However, on a
general trend state’s capital expenditure is less than adequate.

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 TABLE 4

% change in revenue % change in capital

Year expenditure expenditure
2011-2012 93.61 6.39
2012-2013 93.23 6.77
2013-2014 86.64 13.36
2014-2015 90.19 9.81
2015-2016 90.25 9.75
2016-2017 82.06 17.94
2017-2018 89.18 10.82
2018-2019 79.94 20.06
2019-2020 82.75 17.25
2020-2021 95.18 4.82
2021-2022 86.23 13.77
2022-2023 88.33 11.67

% change in revenue and capital ex-

penditure
120.00
100.00
80.00
60.00
40.00
20.00
0.00
2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021- 2022-
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

% change in revenue % change in capital expenditure

expenditure

FIGURE III

However, the further years are marked by decreased capital allocation. The priority of the
state has been revenue expenditure, rather than capital expenditure. Currently, the state has
four types of universities- Central Universities (4), State Universities (18), Private
Universities (7), and Deemed to be Universities (1).

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Among these, all seven universities have been established in the last 6 years, while only three
new state universities have been established in the last 6 six years. Hence, there is a trend of
increasing emergence of private colleges.

Hence, there has been a critical decline in the newer governmental colleges, and while in
these years the enrolment rate has gone higher the students are not left with any option but to
opt for private education.

POLICY INTERVENTIONS -

In the context of the findings, there are three broad reasons which cause the concerns in the
chosen areas of policy intervention.

Firstly, higher education has been a steady priority for the government of Bihar. Expenditure
on higher education as a percentage of GSDP ranges from 0.80 to 1.32 with the highest share
of GSDP allocated in the year 2013. Hence, the state has not awarded a higher priority to the
higher education sector. While there exists a pro-cyclical relationship between the percentage
expenditure on higher education to GSDP; the study finds that this pro-cyclicality is even
stronger for higher levels of education compared to lower levels, indicating that public
expenditure on higher education is more sensitive to economic fluctuations in India (Gayithri,
2020).

Secondly, the withdrawal of the state from public provisioning especially in the terms of
scholarships. Scholarships as highlighted earlier are an important component responsible for
major fluctuations in the budget throughout the trend. The budget witnesses allocation
irregularities in post-matric scholarships and schemes for SC, ST, and OBC. These
irregularities are serious as the state either allocates for a year and then does not for the later
ones. This also reflects the fact that scholarships and schemes for SC, ST, and OBC recurring
expenditures that are not steady and are affected the most by the economic downturns.

Therefore, it is suggested that to reduce the irregularities the state shall establish a monitoring
and evaluation mechanism in the form of a committee or institution in a manner that such
budgetary misallocation can be duly questioned and rectified.

Empirical evidence suggests that the overall social sector spending is cyclical in India at the
state level, while education spending turns out to be pro-cyclical with the pro-cyclicality
being more pronounced in situations of positive output gaps (upturns) and for bigger states
(Andhra Pradesh, Gujarat, Karnataka) than smaller states such as (Bihar, Chhattisgarh, and

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Uttar Pradesh), etc (Kaur et al.,2016). Therefore, the state of Bihar restricts social spending in
times of financial crunch.

The state has shifted from unilateral scholarships to loan-based scholarships. These loan-
based scholarships were introduced in Bihar in the form of the Bihar Student Credit Card
Scheme. Under seven Nishay (Plan of seven promises) of the Bihar government during 2015–
20, the Bihar Student Credit Card Scheme was initiated on October 2, 2016.

This is a scheme of education loans through the Bihar State Education Finance Corporation to
be made available to those living in Bihar who is willing to pursue higher education. The loan
will be available to those who are willing to pursue general, technical, and professional
education in approved educational institutions both public and private.

At present, the education loan will be available to all students who are planning to pursue
higher education in 35 courses mentioned in the scheme. The benefit of the scheme will also
be available to those who wish to pursue polytechnic education. Education loans of up to Rs
two hundred thousand will have to be paid in 60 monthly installments after the moratorium
period. Educational loans above Rs. two hundred thousand will have to be paid in 84 monthly
installments after the moratorium period.

While the transition of state policy from unilateral scholarship to loan-based scholarship is
inherently market oriented. The provisions of the scheme charges interest rate of 4 percent
providing 1 percent rate to girls, disabled and transgender students. The scheme only requires
the student to be 12th pass student willing to pursue higher education providing it an universal
nature.

However, several studies have proved that universal education often curtail the accessibility
of poor students while providing well off students opportunity to avail the free education.
Therefore, it is suggested that the scheme should be provided though means-testing otherwise
the scheme might create condition of student indebtedness in the state.

Thirdly, in concern with the low capital expenditure the state believes to enhance the human
capital of the state without investing in the construction of public institutions. The withdrawal
of the state from constructing newer institutions against the increasing enrolment rate of
students in higher education forces students to pursue private education and take self-
financed courses. It does not only clear out space for private institutions to dictate the

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educational sector but also makes it less accessible and affordable for students from low-
income households.

Therefore, to make higher education accessible to all eligible students’ state shall actively
invest in the establishment of public high education institutions.

REFERENCES:

1. De Wit, H., & Altbach, P. G. (2021). Internationalization in higher education: global

trends and recommendations for its future. Policy Reviews in Higher Education, 5(1),
28-46.
2. Ramanjini, & Gayithri, K. (2020). Is Public Education Expenditure Pro-cyclical in
India?. Institute for Social and Economic Change.
3. Bhushan, S. (2021). Governance of Higher Education in Bihar: Influence of Power
Centers (1st ed.). Routledge India.
4. Governance and Management of Higher Education in India. (2020). India: SAGE
Publications.
5. State Budget Documents, (2011-2023), Department of Finance. Retrieved from-
https://state.bihar.gov.in/finance/SectionInformation.html?editForm&rowId=3373.

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