chapter-vi i institutional cost of...
TRANSCRIPT
Chapter-VI I
Institutional Cost of Education
The educational history of Kerala unravels the unique characteristics of
educational investment in the state. Various studies on the educational
advancement of Kerala have reported that Kerala's remarkable record in the field
of literacy has been the outcome of more than a hundred years of public action.
(Nair 1981, Tharakan 1984, Thomas 1988, Dreze & Sen 1996, Krishnan 1994).
The role of public action in mobilising resources for the educational expansion of
Kerala may be vindicated by an enquiry into the institutional cost of education.
Both, individuals and society have invested considerable amount of resources in
education in various forms since such investment have been found yielding
attractive economic returns besides social and cultural benefits (Tilak I 995).
This study attempts to assess the institutional cost of school education by
examining the individual and social efforts in mobilising resources for schooling
facilities in Kerala.
Concepts and Methodology
Costs of education are borne at two domains - the institutions and the
individuals. The institutional costs include all the expenditure incurred by the
institution, such as expenditure on teacher's salary, non-teacher's salary, land,
buildings, equipment and maintenance. Individual or private or household costs
on education include expenditure incurred by the pupils or their parents on fees
and non-fees like costs of books, stationery, uniform etc. This study is confined
to an examination of the institutional cost of education.
Institutional costs are divided into two categories: the recurring costs and
the non-recurring costs. The concepts of recurring and non-recurring costs are
similar to the concepts of variable and fixed costs (Pandit 1969, Sharma 1969).
Fixed cost is defined as that which does not vary with the level of output.
includes costs of land, buildings, laboratory, library etc. The cost which varies
with the level of output (student) is treated as variable cost and includes the
expenditure on consumable items like chalks, blackboards and other instructional
equipment and the teaching and non-teaching salaries. The annual maintenance
cost is also included in recurring cost.
Since secondary data are not available on capital assets of education for
India as a whole or for the state of Kerala, this study uses primary data. Study
area and the selection procedures of the sample are the same as described in
chapter V.
Sample Profile of the Study
As mentioned earlier, the study was confined to Changanacherry Taluk,
the most literate taluk in the Kottayam district as per 1991 census. All the
schools in this taluk were identified on an urbanlrural basis and 50 per cent of
them have been selected on a random basis for further study. Level wise and
management wise distribution of schools were collected from the District
Educational Office (Table 7.1). Since this office maintained data only about the
recognised schools, the actual number of unaided unrecognised schools were
found from a personal enquiry and it was found that the present number of
unaided schools in the taluk were three times higher than the figure supplied by
the District Educational Office. Distribution of schools in Changanacherry taluk
is given in Tables 7.1 and 7.2 and of the sample selected in Table 7.3.
Table 7.1 : Distribution of Schools in Changanacherry Taluk
Source: District Education Offce
Management
Government
Aided
Unaided
Grand Total
I
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
UP
HS
Total
LP
UP
HS
Total
No. of schools
29
8
11
48
46
25
24
95
4
1
5
I 0
79
34
40
,I 53
Table 7.2: Rural-Urban Distribution of Schools in C hanganacherry Talu k
Management 1 status Rural Urban Total
Total 25 23 1 48 1 --
Aided
1 Total I 33 I 62 1 95 I
1 Total I 4 I 18 I 22 1
Unaided Recognised HS
Unaided U nrecognised
1 Total
Grand Total
2
UP
Total
UP
HS
7
3
3
9
18
15
7
12
10
15
25
29
43
44
Table 7.3: Distribution of Schools in the Sample
0 bjectives
It was observed that educational deveiopment in Kerala in the early
periods has been the outcome of both individual and social initiatives. Hence
this study proposes:
Management
Government
Aided
Unaided Recognised
Unaided Unrecognised
Grand Total
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
HS
Tota I
LP
UP
Total
LP
UP
HS
Total
Rural
7
2
3
12
7
5
4
16
1
2
3
-
I
1
15
8
9
32
Urban
6
2
3
I 1
16
4
7
27
5
3
8
2
3
5 --
29
9
13
Total
13
4
6
23
23
9
11
43
6
5
11
2
4
6
44
17
5 1 83
1) To examine the individual and public efforts in mobilising resources for
schooling facilities during the early phase of the educational expansion in
Kerala by estimating the cost of capital assets of various schools through
replacement cost approach.
2) To estimate the unit cost of education in schools by level and type of
management.
3) To assess the major components of non-recurring and recurring cost of
education.
Establishment of Schools: A Chronological Analysis
Before examining the cost concepts of schools, a general outline of the
ownership pattern, status and year of establishment of these schools seem
necessary. Various studies have reported that educational efforts were initiated
in Kerala on a large scale during pre-independence period (Jeffrey 1976, Nair
1981, Tharakan 1984, Thomas 1988). To what extent 'Changanacherry' has
contributed to this initiative? Chronology of starting of schools in this study
shows that the majority of them were4established before Independence, 52.2 per
cent (1 2 schools) of government schools and 46.5 per cent (20 schools) of aided
schools (Table 7.4).
Table 7.4 : Distribution of Schools on a Chronological Order by Level and Management
After 1997
No. & O/o
1 (501
1 (25)
2 (33.3)
Z(2.41)
Total
No. & %
1 3(100)
4(100)
6(100)
23(100)
23(100)
9(100)
1 l(100)
43(100)
6(100)
S(100)
1 l(100)
2(100)
4(100)
6(100)
83(100)
1968-1 977
No. & %
5(38.5)
1 (25)
1 (16.7)
7 (30.4)
6 (26.1)
2 (22.2)
2 (18.2)
10 (23.3)
1 (16.7)
1 (9.1)
1 (251
1 (16.7)
1 g(22.89)
Government
Aided
Unaided Recognised
Unaided Unrecogn ised
Grand Total
Before 1947
No. & %
7(53.8)
2(50)
3(50)
12(52.2)
g(39.1)
4(44.4)
7(63.6)
20(46.5)
32(38.55)
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
HS
~~~~l
LP
UP
Total
1978-1 987
No.&%
3 (50)
4 (80)
7 (63.6)
7(8.43)
1988-1 997
No. & %
2 (33.3)
1 (20)
3 (27.3)
1 (50)
2 (50)
3 (50)
6(7.23)
1948-1957
No. & %
1 (25)
2 (33.3)
3 (13)
3 (13)
1 (11.1)
1 (9.1) ' 5 (1 1.6)
B(9.64)
1958-1 967
No.&%
l(7.7)
1 (4.3)
5 (2 1.7)
2 (22.2)
1 (9.1)
8 (18.6)
9(10.84)
Educational policy initiatives of the Travancore government during the
pre-independence period seem to have contributed to this phenomenal rise in
the number of schools. In the post-independence period the number of schools
seem to have increased very rapidly; about 47.7 per cent (1 1 schools) of the
government schools and 53.5 per cent (23 schools) of the aided schools were
established during this period. In the more recent years there has been a
mushrooming of schools in the private unaided sector. More than 50 per cent of
them were started after I 99 1.
Ownership Pattern and Status of Schools
Schools are classified into government, private aided and private unaided
on the basis of management and further according to levels into: lower primary
(LP), upper primary (UP) and high schools (HS). About 74 per cent of schools in
the aided sector have corporate status and the remaining schools were under
individual ownership (Table 7.5). Unaided schools are under corporate, trust and
individual ownerships.
Table 7.5 Distribution of Private Schools by Ownership Pattern
'
Status
Ownership Pattern
Level
LP
UP
Individual
5(21.7)
l(11.1)
ll(100)
43( 1 00)
6(100)
5(100)
ll(100)
2(100)
4(100)
6(100)
lO(90.9) ---
34(79)
l(16.7)
2(40)
3(27.3)
1(25)
l(16.7)
Aided Schools l(9.1)
3(7)
Total
23(100)
9(100)
Trust
l(4.3)
1(11 .l)
Unaided Recognised
Unaided unrecog nised
Corporate
17(73.9)
7(77.8)
LP
HS
Total
LP
UP
Total
5(83.3)
5(45.5)
2(100)
3(75)
5(83.3)
3(60)
3(27.3)
All the schools in the government and aided sectors fotlowed the Kerala
State syllabus, while the newly established unaided schools followed the
syllabus of Central Board of Secondary Education (CBSE) (Table 7 . 6).
Table 7.6 : Distribution of Schools by Scheme and Syllabus
Management
Government
Level
I 1 Total ( 23(100) 1 - 1 23(100) 1
State syllabus No.
and %
I Total 1 8(70) 1 3(30) 1 11(100) 1
Aided
Unaided Recognised
CBSE Syllabus
No. and Oh
Grand 75(90-36) 1 8(964) 83(100) 1 1 Total I
Total No.
and %
UP
HS
Tota I
LP
HS
Unaided Unrecognised
Non-recurring Cost of Education
Institutional cost of education comprises of non-recurring and recurring
9(100)
11 (1 00)
43(100)
6(100)
2(40)
LP
UP
costs. The estimation of non-recurring cost implies the estimation of the stock of
capital which is essential for perspective planning (Garg 1985). It also gives an
3(60) ,-
1(50)
l(16.7)
9(100)
11 (1 00)
43(100)
6(100)
5(100)
1(50)
4(100)
5(83.3)
2(200)
4(100)
6(100)
idea about the physical (infrastructural) facilities provided in an institution (Salim
1995). An assessment of the stock of capital in schools is attempted here.
A major problem in this estimation is that the physical stock of capital is
increased by investments and reduced by obsolescence every year (Salim
1995). One-half of the schools in this sample were more than 50 years of age
and the calculation of the capital stock by giving due weight to depreciation is
very difficult.'
Various approaches have been followed in the estimation of capital stock.
Levin (1983) suggests the valuation of capital assets based either on rent in
alternative use or amortization costs. Amortization costs are a measure of the
loan assets consequent on the original decisions to invest in capital assets.
Cannon et al. (1985) suggests the use of rental price, that is, the value that the
highest bidder would place on the use of the facility for the estimation of capital
assets. Another suggestion was to obtain information from estate agents and
compute replacement costs (Cannon et a/. 1985).
The present study makes use of the replacement cost approach. It is
based on the present market value method. Levin (1983) argues that market
prices provide the most common source for providing monetary values on
ingredients, including those which do not have a competitive market price.
Sinden and Worell (1979) observe that market prices are sources of value
information. Where they exist, they are usually the best indicators available.
Since one of the aims of this study is to highlight the early investment efforts of
According to a UNESCO study. "present methods of calculating capital requirements in education are inadequate. In no country does an annual review of the stock of capital in education or a systematic depreciation of school buildings take place." (F redri Edding 1966, p. 10).
the various agencies in the field of education in the form of land, buildings,
equipment etc, the replacement cost approach based on the present market
value of capital assets seems to be more suitable.
Physical Infrastructure Facilities and Its Replacement Cost
Physical infrastructure of a school consists of its land area, buildings
including library, laboratory and office accommodation and furniture. After
collecting information on these items, replacement cost is estimated separately
for each item. Based on these, the schools having similar cost are arranged into
classes. Instead of finding the replacement cost of each school, schools are
classified according to the 'range' of replacement cost.
Land Area
Land was not a major constraint in the establishment of schools during
the early phase of educational expansion. Various studies have reported that in
most cases land was given as gifts both for the govt and aided schools either by
the early rulers or by rich families and religious organisations (Eapen 1985.
Misra 1962, Nair 1983)~~
The minimum land area prescribed as per the Kerala Education Act of
1959, is 1.2 hectares for High Schools and 0.4 hectares for UP and LP schools.
(Kerala Education Act of 1959, Ch XXIII). For the estimation of replacement
2 Education used to be funded largely by individuals and religious organisations in the form of voluntary contributions such as donations and endowments. (Misra 1962). 'The Royal Neet' of 1993 M.E (1818 A.D) granted an extensive area of land to the missionary at Kottayam to establish a school. (Eapen K.V. 1985: p.226) "The missionaries received from the government large amount of money, vast tracts of land, building materials for construction of churches and educational institution (Nair 1983).
cost, the data on land area owned by different schools were collected from the
school records (Table 7.7).
Table 7.7: Distribution of Schools by Land Area
While 19/23 of the government schools, 37/43 of the private aided
Management
Government
Aided
Unaided Recognised
Unaided Unrecognised
schools and all of the unaided recognised schools had the required land area,
only half of the schools in the unaided unrecognised sector had the prescribed
land area.
Replacement Cost of Land Area
Estimation of replacement cost requires data on the market value of land
besides the extent of land area. Two methods may be followed in the estimation
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
HS
Total
LP
UP
Total
<50
3(23.1)
1 (25)
4(17.4)
5(21.7)
l(11.2)
6(14)
Z(33.3)
2(18.2)
2(100)
1 (25)
3(50)
cents)
201-500
3(50)
3(13. I )
l(4.3)
a(72.7)
g(20.9)
l(16.7)
4030)
5(45.4)
l(25)
l(16.7)
Area
50-1 00
10176.9)
1(25)
1 l(47.8)
lZ(52.3)
4(44.4)
16(37.2)
l(16.7)
-
l(9.1)
of Land (in
1 01 -200
2(50)
2(33.3)
4(17.4)
5(21.7)
4(44.4)
2(18.2)
1 q(25.6)
2(33.3)
2(18.2)
2(50)
2(33.3)
>500
l(16.7)
l (4 .3 )
l(9.1)
l(2.3)
1(20)
1(20)
Total
I 3(100)
4(100)
6(100)
23(100)
23(100)
9(100)
ll(100)
43(100)
6(100)
5(100)
ll(l00)
2(100)
4(100)
6(100)
of the present value. The first is the rate fixed by the Revenue Department for
the collection of stamp duty. Often this is on the lower scale than the market
rate. The second is the market rate itself, which is followed in this inquiry,
information on which was obtained from enquiries on land transfers in the
neighbourhood. Based on this data, schools having varying ranges of
replacement costs are arranged into different classes to obtain the present value
of the past educational investment (Table 7.8).
Table 7.8: Distribution of Schools on the basis of Replacement Cost of Land
It is seen that the replacement cost of land for different schools varies
between Rs. 5 lakhs to Rs. I. crore. About 39 per cent of government schools
have a replacement cost between 5 to 10 lakhs and 26.1 per cent between 10 to
Management
Government
Aided
Unaided Recognised
Una~ded Unrecog nised
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
HS
Total
LP
UP
Total
Cost groups (Rs in Lakh)
Total
100(13)
1 W4)
41-100
l(7.6)
2140
3(23.1)
1(25)
LM
3(23.1)
l (25)
>I00
-
l(16.7)
Z(8.7)
l(4.1)
1(9 1)
2(4.7)
l(16.7)
I (20)
2(18.2)
1116.7)
S(21.7)
3(13)
t(11 2)
e(54.5)
1 O(23.3)
3(60)
3(27.3)
4(17.4)
4t17.4)
4(44.4)
l(9.1)
g(20.9)
3(50)
3 (27.3)
2(100)
3(75)
5(83.3)
6-10
4(30.8)
1 (25)
1 1 -20
2(15.4)
1(25)
5(21.7)
lO(43.5)
2(22.2)
12(27.9)
1(16 7) 1 lOO(6) I
I
3(50)
6(26.1)
5(21.7)
2(22.2)
l(9.1)
a(18.6)
l(16.7)
l(9.1)
1(25)
1 (I 6.7)
l (4 2) 100(23)
1 00(23)
1 OO(9)
z(18.2) ( 100(11) '
2(4.7)
l(16.7)
l(20)
2(18.2)
100(43)
lOO(6)
lOO(5)
lOO(11)
1 OO(2)
1 OO(4)
1 OO(6) - I 1
20 lakhs. The remaining schools have a replacement cost above 20 lakhs. In the
aided category 48.8 per cent schools have a replacement cost below Rs. 10 lakhs,
18.6 per cent between 10 and 20 lakhs and the remaining costs above 20 lakhs. In
the unaided recognised sector, 50 per cent of 1.P schools reported low replacement
cost, while all the high schools are in the range between Rs. 20 lakhs to Rs. 1
crore and above.
School Buildings
School buildings vary in size, structure and age. Half the number of
schools in the sample has buildings which are more than 50 years of age.
Hence in the calculation of replacement cost, concepts like depreciation and
implicit interest rate are left out. Instead replacement value is found out with the
help of engineers in the Public Works Department of the Government of Kerala
who are also in charge of inspection of school buildings constructed by private
agencies in the private sector.
Replacement cost of buildings varies according to (1) the size of the
buildings (2) the nature of the buildings, ie., 'pucca', 'kutcha' (permanent, semi-
permanent or temporary) and (3) the nature of roofings, (ie., concrete/asbestos
sheet or tiled). The distribution of schools with varying replacement cost is
, presented in table 7.9.
Table 7. 9: Distribution of Schools According to Replacement Cost of Building
(Rs in Lakhs)
I I I cost groups i ' ~anagernent
Government
Aided
Unaided recognised
Unaided unrecognised
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
HS
Total
LP
UP
Total
0- 4
1 (7.7)
7 (25)
2(87)
5(21.7)
5(11.6)
1(20)
1 (9.1)
3(75)
3(50)
9-1 2
5(21.7)
2(22.2)
7(16.3)
1 (1 6.7)
l(9.1)
5-8
12(92.3)
12(52.2)
11148)
6(66.7)
17(39.5)
4(66.7)
4(36.4)
Z(100)
2(38.3)
Total
100(? 3)
1 00 (4)
1 OO(6)
1 OO(23)
1 OO(23)
1 OO(9)
100(t 1)
1 OO(43)
1 OO(6)
1 OO(5)
lOO(11)
1 OO(2)
1 OO(4)
1 OO(6)
1 3-20
3(50)
3(13)
l(4.3)
l(11.1)
l(9.1)
3(7)
2140
3(75)
3(50)
6(26.1)
l(4.3)
7(63.6)
8(18.6)
41-60
u
l(9.1)
l(2.3)
l(16.7)
1 (20)
2(18.2)
61 & Above
2(18.2)
2(4.7)
,
3(60)
3(27.3)
1 (25)
l(16.7)
The majority of aided schools are better placed compared to government
schools in the matter of school buildings and hence their replacement cost is
also high. About 27.3 per cent of aided high schools have a replacement cost of
Rs. 40 lakhs and above. Difference in the replacement cost of school budding
also supports the general view that aided and unaided schools have better
physical infrastructure facilities than government schools.
Furniture
The replacement cost of school furniture is derived and est imated after
assessing the total number of classes and divisions and the average number of
students attending various classes. Based on this information the adequate
items of furniture required for a school are estimated and their present value
estimated. Computational difficulties in assessing the life of furniture is avoided
since the calculation is based on replacement cost approach. The figures
presented in table 7.10 show that in the matter of school furniture, the cost
incurred by private aided and unaided schools were more since facilities
provided were better.
Table 7.10: Distribution of Schools on the Basis of Replacement Cost of Furniture
(in Rs)
Management
Government
Aided
Unaided recognised
Unaided unrecognised
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
HIS
Total
LP
UP
Tolai
1 50000 1 -30 lakhs
1(25)
4 (66.7)
5(21.7)
l(4 1 .)
3(27.3)
4(9.3)
2(33.3)
2(18.2)
1 (25)
l(16.7)
3000001 -50 lakhs
l(16.7)
l(4.3)
6(54.5)
6(14)
1 (20)
l(9.1)
Up to 75000
7(53 -8)
1(25)
8(34.8)
2(8.7)
l(11.1)
3(7)
l(16.7)
l(9.1)
1 (50)
1(25)
2(33.3) !
75001-1 lakh
6(42.2)
l(16.7)
7(30.4)
14(60.9)
4(44.4)
18(41.9)
3(50)
3(27.3)
1 (50)
2(50)
3(50)
5000001 -1 crore
Z(18.2)
2(4.7)
2(40)
2(18.2)
100001-15 lakhs
2(50)
2(8.7)
7(30.4)
3(33.3)
1 O(23.3)
Above 1 crore
2 (40)
2(18.2)
Total
1 OO(13)
1 OO(4)
1 OO(6)
1 00 (2 3)
1 OO(23)
1 OO(9)
1 OO(11)
1 OO(43)
1 OO(6) I i
1 OO(5)
1 OO(11)
- l O O ( 2 )
1 OO(4)
lOO(6 ) : ,4 - 3
Laboratory
Private aided and unaided sch~ols are better endowed in the provision of
laboratory facilities, and their replacement cost is therefore higher than those of
the government schools where the facilities have been (Table 7.11).
Table 7.1 1 : Distribution of Schools according to Replacement Cost of Laboratories
(in Rs)
I 1 I Cost groups 1
Library
In the government and aided schools library facilities have been made
available only at high school levels. But in unaided schools, library facilities have
been provided from L.P level onwards. The replacement costs of libraries are
given in table 7.12.
Management
Government
Aided
Unaided Recogn ised
Status
HS
Total
HS
Total
HS
Total
Total
1 OO(6)
1 OO(6)
1 OO(11)
lOO(11)
1 OO(5) ,
1 OO(5)
Upto 25000
3(50)
3(50)
-
-
500001 -1 0 lakhs
l(9.1)
l(9.1)
3(60)
3(60)
Above 10 lakhs
1(20)
1(20) -
25001 - 50000
3(50)
3(50)
3t27.3)
3(27.3)
50001 - 1 lakh
6(64.5)
6(54.5)
10000 1-5 lakh
l(9.1)
l(9.1)
1(20)
1(20)
Table 7.1 2: Distribution of Schools according to Replacement Cost of Library
(in Rs.)
The number of books available in the government schools was scanty,
Mamgement
Government
Aided
Unaided Recognised
Unaided Unrecognised
Aided schools were better equipped in this respect. About 64 per cent of them
had investment of over Rs. 50,0001-. Unaided schools were better placed in the
Stam
HS
Total
HS
Total
LP
HS
Total
LP
UP
Total
matter of the availability of library books and related facilities.
Office Buildings
Cost groups
The replacement cost of office buildings including the office and staff
rooms was seen lower in government schools. Inadequacy of facilities for the
ik",
l(100)
l(50)
teaching staff was reported from government schools. Aided and unaided
100001-5 lakhs
1 (9.1)
l(9.1)
3(60)
3(37.5)
schools were better equipped in the matter of infrastructural facilities and hence
they have a higher replacement cost (Table 7.1 3).
Total
1 OO(6)
1 OO(6)
1 OO(11)
1 OO(11)
1 OO(3)
lOO(5)
lOO(8)
1 OO(1)
1 OO(1)
1 OO(2)
50001-1 lakh
6(54 .5 )
6(54.5)
l(33.3)
2(40)
3(37.5)
1 (1 00)
1(50)
'OW'- 25000
3(50)
3(50)
l(33.3)
l(12.5)
25001- 50000
3(50)
3(50)
4(36.4)
4(36.4)
l(33.3)
l(12.5)
Table 7.13: Distribution of Schools According to Replacement Cost of Office (in Rs.)
Management
Government
-
Aided
Unaided recognised
Unaided unrecognised
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
HS
Total
LP
UP
Total
Total
1 OO(13)
1 OO(4)
1 OO(6)
1 OO(23)
1 OO(23)
1 OO(9)
lOO(11)
1 OO(43)
1 00 (6)
1 OO(5)
lOO(11)
1 OO(2)
1 OO(4)
1 OO(6)
Up to 10000
5(38.5)
5(21.7)
l(4.3)
l(2.3)
Ooo1- 20000
4(30.8)
3 (25)
5(21.7)
1 (50)
20001 -25000
Z(15.4)
3(75)
4(66.7)
g(39.1)
B(34.8)
3(33.3)
1 1 (25.6)
2(33.3)
2(18.2)
Cost
30000 25001-
1 (7.7)
1 (4.3)
6(26.1)
Z(22.2)
8(18.6)
l(50)
l(16.7)
Above la kh
l(4.3)
l(11.1)
2t4.7)
l(16.7)
3(60)
4t36.4)
'
l(16.7)
groups
30001 -40000
l(7.7)
l(16.7)
Z(8.7)
5(21.5)
l(ll.l)
3(27.3)
9 (20.9)
l(16.7)
l(9.1)
40001 -50000
l(16.7)
l(4.3)
2(8.7)
2 (22.2)
5(49.5)
g(20.9)
- 2(33.3)
2(18.2)
2(50)
2 (33.3)
50001 -1 lakh
3(27.3)
3(7)
2(40)
Z(18.2)
2(50)
2(33.3)
The foregoing analysis of the replacement cost of the non-recurring
expenditure of schooling facilities indicates the individual and collective
educational efforts and investment in the past,
Recurring Cost of Education
Recurring cost of education comprises of several components. The major
items are as follows;
a) Salaries of teaching staff
b) Salaries of non-teaching staff
c) Maintenance of equipment and furniture
d) Maintenance of building
e) Annual expenditure on laboratory
f Annual expenditure on purchase of books for library
g) Office and other miscellaneous expenses
All the above components of recurring cost have been examined with a
view to estimate and compare the unit cost of school education at various levels
and managements.
Components of Recurring Cost
a. Salary of Teaching Staff r
A major component of recurring cost of education is the salary and
allowances of teachers. Such data were collected from the office records of
various schools for the academic year 2001 -02.
From this the average salary of a teacher per month is computed for
various levels and managements (Table 7.14).
Table 7.14: Mean Distribution of Teaching Staff Salary
(in Rs.)
Government
Management
I Total (Mean)
Aided
Status
Total (Mean)
Mean
Unaided Recognised 1 HS
/ Total (Mean) I -
3456.55
As the teachers in government and aided schools have the same pay
Unaided Unrecognised
~
scale, the average salary figures in respect of these schools are almost the
same, marginal differences if any, is due to variations in the length of services
and grades of teachers. However, teachers in unaided schools are 'underpaid',
despite government directions on the contrary.
LP
UP
Total (Mean)
24 14.50
1580.75
1858.67
Salary of Non-Teaching Staff
Salary of the non-teaching staff forms part of the administrative cost of
education. Administrative cost forms only a small proportion of the teaching
cost. The average number of non-teaching staff and their pay is presented in
Table 7.15.
Table 7.15; Mean Distribution of Non-teaching Staff Salary
(in Rs.)
Government
Management -. -. . . - -
1 Total 1 2 1 3575.26 1
Aided
Average salary
3129
Status
LP
... - .--
Average No. of staff
1
LP
UP
HS
Total
1 Total I 2.10 1 2481 1 Una tded recognised
1.50
1
5.09
3.88 -- --
The strength of non-teaching staff is determined by the level of schools
and the number of students. In high schools the sanctioned strength of staff is
limited to six if the schools have atstudent strength of 1500 and above and for ' less numbers the maximum number sanctioned falls to four. Non-teaching staff
admissible upto UP level is limited to the post of a single attender (Kerala
3857.50
346 1
421 6.36
4029.88
HS
Unaided unrecognised
2.40
LP
UP
Total
2444
2
3
2.75
2250
1041 -67
1343.75
Education Rules Chapter XXIII). Salary scales both for the aided and
government schools are fixed by the government. The salary of non-teaching
staff in the unaided sector was very low compared to aided and government
schools. It was about a half of that in the aided and government schools.
However, the number of non-teaching staff in unaided schools were quite a few.
Recurring Cost for Building
Annual average cost for maintenance of school building varies between
managements (Table 7.16).
Table 7.16 Distribution of Recurring Cost for School Buildings
(in Rs .)
'
Management
"
Government
Aided .
Unaided
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
j HS
Costs
Total l(16.7)
i Recognised
Unaided Un recognised
6001-1 0000 - - -
l(4.3) -
4 (36.4)
Up to 1000
3(23.1)
Z(33.3)
5(21.7)
4(17.4)
: Total
LP
u6
2001 -4000
l(7.7) -
q(16.7)
2 (8.7)
4(17.4)
2(22.2)
(6) 1 00
4 001 -2000
8(61.5)
3(75) l(16.7)
'lZ(51.2)
5(21.7)
2(22.2)
2(33.3)
4001-6000
l(7.7)
1 (25) 2(33.3) 4(17.4)
g(39.1)
fi(55.6)
5(45.5)
10001 -20000
- -
-
2(18.2)
4(9.3)
Total
(1 3)100
(4) 1 00
(6)lOO
(23 1 00)
(23) I 00
(9) 1 00
(I ?) I00
7(16.3)
!
l(16.7)
6(14)
-
- I I
1 ~ 5 ) Z(33.3)
Z(4.7)
3(50) S(100)
8(72.7)
(43) 1 00
( 6 ) l O O
(5) 100
(I 111 00
(2) 1 00
I g(44.2)
(4) I 00
S(11.6)
~ ( 2 5 ) - i ~ ( 5 0 )
l(16.7) 1 Z(33.3)
l(9.1)
1 (50)
2(18.2)
1(50)
The inadequacy of maintenance in the government schools is evident
from the cost schedule. About five schools out of 23 in the government sector
reported an annual maintenance cost of just Rs. WOO/-. More than half the
number of schools (52 per cent) incurred a cost between Rs. 1000 to Rs. 2000.
As per the new Panchayat Raj Act (Peoples Plan) the maintenance of school
buildings in the government sector is a subject of the local bodies. Maintenance
of buildings in aided schools seems better (than in the government); in the
unaided schools it has been given a high priority. Average annual expenditure
on this item was 10 times higher in unaided schools than in government schools
Recurring Cost for Furniture
The annual recurring cost for repairs and maintenance of furniture and
other equipments has been very low in government schools compared to the
unaided sector. In the four government schools the annual recurring cost was a
meagre amount of Rs. 400 (Table 7.17).
Table 7.1 7: Distribution of Recurring Cost of Furniture
I in Rs.)
Management
"
Government . ,
Status
t P
UP
HS
I
Aided
Unaided '
I
Unaided Unrecognised
of Recurring
1001 -2000
cost of furniture
2001 -1 0000
Classification
l(4.3)
l(11.1)
6(54.5)
8(18.6)
2(33.50)
2(18.2)
3(27.3)
3(7)
3(50
4(80)
7(63.6)
501 -1 000
Z(15.4)
7 (25)
3(50)
Above 10000 Upto 400
2(15.4)
2(33.3)
6(26.1)
11 (47.8)
S(55.6)
Total
(13)lOO
(4) 'loo
(611 00
401 -500
g(69.2)
3(75)
j(16.7)
1 (20)
1 (9.1 )
1 3(56.5)
11 (47.8)
3(33.3)
Total
LP
UP
(23) 1 00
(23)lOO
(9) 1 00
(11)100 1
(43)lOO
(6) 1 00
(5) 1 00
(1 1 ) l O O 1
( 2 ) l O O
(4) 1 00
(6) 1 00
I 4(17.4)
HS
Total
LP
HS
I Total
LP
UP
Total
I
1 i Z(18.2) i
1 14(32.6) j
1 (50)
l(16.7)
18(41.9)
l(16.7)
l (9.1)
1 (50)
4(100)
5(83.3)
Recurring Cost for Library and Laboratory
In the government and aided schools library and laboratory facilities have
been made available only at the high school level, and such facilities have been
available in the unaided schools from the L.P level onwards. Reputed aided and
unaided schools were well-equipped in library and laboratory facilities, a rai-son
d'etre for their reputation. Four government and five aided high schools spent
just Rs. 5001- annually for the purchase of library books (Table 7.18).
Table 7.18 Distribution of Recurring Cost of Library
Management
Government
Status Recurring cost
< 500
3(27.3)
3(27.3)
1(20)
l(12.5)
- -
5(45.5)
5(45.5)
3(100)
3(37.5)
I (I 00)
1 (1 00)
2(100)
' HS
HS
Total
Aided , ,
Unaided ~ e c o ~ n i s e d
Unaided Unrecognised
501 -1 500
2(33.3)
Z(33.3)
2(q 8.2)
Z(18.2)
-
2 (40)
2(25)
4 (66.7)
4 (66.7)
Total
LP
HS
Total
LP
UP
Total
1501-5000
-
l(9.1)
l(9.1)
1(20)
j ! I
5001 -10000
-
(2) I 00
-
-
1(20)
(6) 1 00
(6) 100
(11)lOO
(1 1)lOO
(3) 1 00
(5) 100
l(12.5) l (12.5)
- 1
r I
(8) 1 00
(1)lOO
(1)lOO
> 10000 Total
Unaided schools spent larger amounts for the provision of library books,
laboratory equipments and related items. Some of these schools were found
spending Rs. 10000 and above towards their purchase and maintenance
(Table 7.19).
Table 7.1 9: Distribution of Recurring Cost for laboratory
(in Rs)
Recurring cost
Management
Total
Unaided Recognised .pi
Recurring Cost for Office
Off ice expenses, generally referred to as administrative expenditure
include the expenses on stationery, telephone, electricity and other
miscellaneous items. The annual expenditure under this head varied from
Rs. 500 to Rs. 20000 (Table 7.20).
Table 7.20: Distribution of Recurring Cost for Office (in Rs)
Management Status
LP
UP
HS
Total
LP
UP 1 HS
Total
LP
HS
Total
LP
UP
Total
!
Government
Aided
Unaided recognised
Unaided unrecognised
!
< 500
l (7.7)
1 (25)
Z(8.7)
l(4.3)
2(22.2)
-
3(7)
-
501-1 000
B(61.5)
2(50)
l(16.7)
1 l(47.8)
1 O(43.5)
-
-
1 O(23.3)
1001 -1500
2(33.3)
2(8.7)
7(30.4)
2 (22.2)
l(9.1)
1 O(23.3)
l(16.7)
l(9.1)
1 (50)
l(16.7)
Recurring
1501 -2000
3(23.1)
1 (25)
2(33.3)
G(26.1)
4(17.4)
3(33.3)
1(9. I)
8(18.6)
cost
2001 -4000
l (7 .7)
l(16.7)
Z(8.7)
l (11 . I )
5(45.5)
6(14)
Total
- 1 2(50)
3(50)
4001 -1 0000 > 10000
-
-
4(36.4)
4(9.3)
3 (5 0)
3 (27.3)
1(50) I
2(50)
Z(33.3)
(4)100
(6)lOO
- 1 (13)100
l(4.3)
l(11.1) 1
Z(4.7)
Z(33.3)
5(100)
7(63.6)
-
(4) 1 00
(6) 1 00
(23) 1 00
(2311 00
(9)lOO
(1 1)lOO
(43)lOO
( 6 ) l O O
( 5 ) l O O i
(1 7 ) 100
(2) 1 00
In the government and aided schools, the annual expenditure on
administration was found to be low than in unaided schools. 7 out of I I unaided
recognised schools reported an annual recurring cost of Rs. 10,0001- and above.
One half of the government schools reported the administrative expenses below
Rs. 10001-. Teachers in government schools complained about the inadequacy
of fund for meeting such expenses and in many cases, these expenses were
met from their own pockets. Such instances have not been found in aided and in
unaided schools.
Unit Cost of Education
After having examined the major components of recurring cost and their
inter-school variations across managements and levels, an estimation of the unit
cost of education is attempted. Unit cost is defined as the cost of an educational
unit, estimates of which are extremely useful in investment decision making in
education (Tilak 1995). Unit costs considered as indicators of efficiency are
essential for educational planning in general and planning of resource allocation
in particular (Tilak and Bhatt 1986). Therefore unit cost studies are of particular
relevance in the context of rapid expansion and diversification of the educational
sector (Salim 1 995).
There exist three approaches to the estimation of unit costs of education.
They are (1) cost per pupil enrolled, named as normal costiof education (2) cost
per pupil actually attending the school and (3) cost per successful pupil. The
third one is also called effective cost of education (Nair 1981). Th,is study
considers cost per pupil enrolled, named as normal cost of education. Here the
number of pupils enrolled is taken as the unit. The cost of education is obtained
by dividing the total cost by the total enrolment.
Determinants of Unit Recurring Cost
For estimating the total cost, the following components of recurring cost
are taken.
a) Salaries and allowances of teaching and non-teaching staff.
b) Recurring cost for maintenance of building, furniture, library, laboratory
and office expenses.
An analysis of unit cost by components indicates the relative weight of
each of the factor in the unit cost (Table 7. 21 ).
Table 7.21 : Distribution of total recurring cost by management and level (in per cent )
Aided
-- - .. -
Unaided recognised tr s 5.33 90.57
- -
Total 5.59 -. -- L .
88.89
LP 5.16 77.47 17,36
Total
100
100
100
100
100
Management
Government
Total
UP
HS
Status
LP
UP
HS
Total
LP
0.95
Unaided Unrecognised
1.31
0.77
J Total -
Recurring cost for
maintenance
0.92
0.46
0.34
0.51
1.20
92.08
UP
93.03
90.27
8.19
Teaching Staff
92.29
95.12
88.79
90.89
96.03
6.97
9.39 -
77.3 1 ] 14.50 - -
100
Non- teaching
staff salary
6.79
4.42
10.87
8.6
2.77
5.66
8.96
100
100
100
77.25 13.36 100
The two major components influencing unit cost are the total number of
enrolment and the average salary of the teachers. An increase in enrotment
leads to fuller utilisation of the various resources and this tends to reduce unit
cost. Hence there seems to exist a negative relationship between enrolment and
unit recurring cost of education.
The second factor, the average salary of the teachers ie., the teaching
cost, is a composite variable which reflects many factors like levels of pay, pay
and allowances prevailing at a particular time, composition of teachers in various
grades, average length of service etc (Dutt 1969). The share of teaching cost in
the total cost varied between 77 per cent to 92 per cent in various schools under
different managements (Table 7.21). It is higher in the government and aided
schools than in the unaided schools.
Another factor influencing unit cost, the pupil-teacher ratio is obtained by
dividing enrolment by the number of teachers. There can be a positive
relationship between unit cost and pupil-teacher ratio.
The share of cost of non-teaching staff in total costs was comparatively
very low, 8.6 per cent in government schools and 6.97 per cent in aided schools,
in the unaided sector, especially at LP Levels, it was higher. High enrolment rate
and superior infrastructural facilities require more numbers of administrative staff
to man these institutions leading to a rise in the cost of nonrteaching staff. But it
is likely that with an increase in enrolment, cost of non-teaching staff per student
may decljne, A
Other factors which influenced unit cost of education have been the
recurring cost for maintenance. The annual cost of maintenance for the
buildings, library, laboratory, furniture and office are added to the total recurring
cost. But this is an insignificant percentage in government and aided schools.
(Below 1 per cent in government and aided schools and 5.59 per cent and 8.19
per cent respectively for recognised and unrecognised schools in the unaided
sector).
Information on the major components and their estimation is given in
table 7.22.
Table 7.22: Distribution of the Major Components of Unit Cost of Education
(in Rs)
Management
Government
Aided
. - - - - -.
Unaided Recognised
. .-
Unaided Unrecognised
Status
LP
UP
HS
Total
LP
UP
HS
Total
LP
HS
Total
LP
UP
Total
Q) C
e -.-2 < 6 J! t - $ 0 : z
0 0
50600
18000
39400
108000
1 15300
81 500
236500
47 1 000
21 2800
781000
993800
23200
105500
128700
U)
k F c rn
j k
5 1 03756
3773256
10380060
--- . --. . .
19257072
1 230 1056
5797056
28028460 -
46 1 26572
251 1936
13265040
1 5776976 1
348036
867588
121 5624
m - .- E
Q) w
5529836
3966456
1 1690980
21 187272
1 2809496
6231 572
31048000
50089068 - - . - . - - . . . . - . -
3102976
14646820
1 7749796
449236 . . - . - . -
1 1 23088
1 572324
UJ .E 2 z cll
Y =
s: Z
375480
1 75200
1 271 520
1822200
355440
353016
2783040
349 1496
378240 . 600780
979020
78000 - .
150000
228000
u 01 - ? g Q
'25; 0 z
171 7
101 5
2696
5428
5587
2339
12583
20509
2791
5728
851 9
41 3 -.
969
1382
An analysis of the unit cost of education at various levels for different
managements are given in Table 7.23.
Table 7. 23: Unit Cost of Education by Management and Level
(in Rs.)
1) Unit cost of education has been the h~ghest in government schools
followed by aided and unaided schools.
2) In theunaided unrecognised schools, the unit cost of education was less
Management
Government
than one third of the government schools.
Status
- - - . .
LP
UP
HS .-
Total Cost
. - -
Total students enrolled
Aided
Unaided recognised
Unaided unrecognised
Unit cost of . Education
5529836 3220
Total
LP
UP
HS
Total
LP
HS
Total
LP
HS .
3966456
1 1690980 .-
2 1 1 87272
1 2809496
6231 572
Total - . . . -.
Grand Total
101 5
2696
5428
5587
2339
3907
4336
3903
2292
2664
3 1 048000
50089068
3 1 02976
14646820
1 7749796 - - -. . -. -
449236
1 1 23088
1 572324 . . , - , - . - -
250298460
12583
20509
2791
5728
851 9
41 3
969
1382
35838
2467
2442
1112
2557
2083
1087
1159
1137
6984
Aided high schools and unaided recognised high schools showed almost
similar unit costs.
The above figures on unit cost of education require further explanation.
Teacher's salary and enrolment of students varied between schools by type of
management. In the case of government schools, the number of students
enrolled was the lowest and the teacher's salary, the highest. Although aided
schools have the same salary structure as that of government schools, high
enrolment rate tended to reduce their unit cost of education compared to
government schools. The pupil-teacher ratio was also the lowest for government
schools (Table 7.24).
Table 7.24: Distribution of Pupil-Teacher Ratio by Level and Management
Management
Government
P
Aided
. - ..-
Unaided Recognised
Unaided Unrecognised
-- -
Average No. of teachers
5.57
10.25
17.83
9.48 -.
7.13
8.67
30.36
13.40 >
1 2.50
48 . - - -. - - . - .
28.27
6
10.50
9
Pupil-Teacher Ratio
27.95
23.09
24.07
24.04
33.63
29.24
35.60
33.21
38.76
21.90 - - .--
33.62
33.52
21 -77
25.69
Status
LP
UP
HS
Total
LP
UP
HS -
Total
LP
HS
Total a
---
LP
UP
Total
Average No. of students
132.08
253.75
449.33
236
242.91
259.89
1143.91 -
476.95
465.17
889.33
'77445 - -. . -. - - - - - - - -
206.50
242 -25
230.33
Unaided schools, with high pupil-teacher ratio and low salary, registered the
lowest unit cost of education. It was Rs. 2083 and Rs. 11 37 for the recognised and
unrecognised schools respectively.
Two conclusions which emerge from these observations may be noted.
1) Government schools by incurring a high unit cost of education are likely
to become more 'uneconomic'.
2) tow unit cost of education in the unaided sector raises their profitability
leading to the growth of such institutions.
Conclusion
A study on institutional cost of education gives an estimate on total cost
of education from the supply side. The non-recurring and recurring costs of
education are the two major components of institutional cost of education. An
analysis of the major components of non-recurring cost of education and its
estimation according to replacement cost approach highlights the differences in
the infrastructure facilities between schools. It also sheds light on the huge
quantum of resources rnobilised for education by the public during the early
educational phase in the state. The relative deficiencies of the government
schools in infrastructure facilities and their poor maintenance were also
observed. Analysis of recurring cost and the estimation of unit cost of education 5
by type of management again pose problems for the government schools. The
chances of becoming uneconomic due to high unit cost of education is higher for 4 . 6 -
government schools; while unaided schools, with lower unit cost of education
attract new investors. If unit cost of education is taken as an efficiency indicator,
then the schools in the government sector require efficiency measures for
survival.
Cost-institutional and private - constitutes only one aspect of the economics
of education. The other equally important aspect pertains to the returns from
investment in education which forms the theme of Chapter VIII.