If the 2% education cess was the government's great hope for financing basic education in India, then perhaps it's time for a rethink. In the first eight months of the current fiscal, the government has raised Rs 2,400 crore through the cess. It amounts to only one-third of the Budget estimate of Rs 6,975 crore for the year.
In the four months between December and March, the government hopes to raise the difference to two-thirds of the estimated cess collection. Official figures show that till November end, Rs 1,30,095 crore had been collected, which was about 48% of the Budget estimate of Rs 2,73,466 crore as tax collection. Even in '04-05, the education cess yielded much less than what the government had hoped for. In '04-05, the revised estimate put the education collection at Rs 5,010 crore, but the actual collection was Rs 4,173 crore, a shortfall of nearly Rs 1,000 crore. Going by past records, it would seem that tax collection picks up in the post-November period. By December this year, the government has achieved about 61.7% (Rs 1,68,715 crore) of its Budget estimate of Rs 2,73,466 crore. While that might make the tax man happy, it does is present a problem when it comes to the education cess. The HRD ministry is unable to tap into the cess money for the better part of the year as tax collections are slow. So in effect, the ministry gets a large portion of the money at the end of the fiscal and not during the year when programmes like Sarva Shiksha Abhiyan and mid-day meals require funding. This defeats the purpose of the cess. The government created the Prarambhik Shiksha Kosh in the public accounts to hold the education cess, and ensure a smooth and continued flow of funds. However, this would work if funds allocated for the programme remained unspent. The government's flagship elementary education programmes have been rapidly expanding and require greater and timely influx of funds.
Grab the opportunity to meet the who's who from the world of education. Join us for World Education Summit in New Delhi on 9-10th August 2018. It will be a wonderful occasion to explore business opportunities. Like us on Facebook, connect with us on LinkedIn and follow us on Twitter.