Comparative Analysis of the Extent of Free Education and Average Private Expenditure on Education in India

The paper is an attempt to analyse up to what extent free education can reduce households’ burden of private expenditure on education. Such an analysis is important in current government policy drive of reducing subsidies from social sectors and providing targeted free education to poor. Logically the social need of students availing free education is fulfilled by government so they are relieved from the risk of impoverishment due to high private expenditure. But analysis on NSSO data on Participation and Expenditure on Education, 2007-08 reveals that free educations is availed only at elementary level and at that level also free education is not universal. In the first part the distribution of free education has been discussed at each level of education, MPCE class and state. Next the average cost of education for students receiving free education and students’ not receiving free education has been calculated to compare up to what extent free education exempts students from private expenditure. Lastly the comparative share of each item of education to total expenditure has been analysed for each state to understand the particular item that is responsible for most of the expenditure on households. It has been observed that although the cost of education of those receiving free education is lower than those receiving paid education but in absolute terms there is significant expenditure on education by the households. Above school level free education is almost inexistent and expenditure on education is incurred on all consumption expenditure quartiles. Therefore even the poor households have a proportion of expenditure going to education as students either do not receive free education or do not get it absolutely free. Item wise break up of expenditure showed that free education relieves a household only from paying tuition fees. There are other important items of consumption like books, stationery, uniform and most importantly private tuition consumed by students in all MPCE quartiles and paid for by households. Quality of educational institutions have to be improved so that private tuition does not remain a necessity and overall education from primary to highest level have to be provided by the government to relieve households from expenditure burden.