Investment in Education is a prerequisite for national development free essay sample

Education has long been accepted as a foundational component of human development and a key enabler of social and economic progress of any nation. For a country to grow and prosper, a well-positioned educated young population is the fundamental requirement to meet the demands of an increasingly global economy and productive value creation. In this juncture, the most important duty of the government is to provide access to high quality education for everyone. This will create positive externalities in terms of higher education attainment and achievement of children, better health, more participation in the labour force and, higher productivity in terms of increased earnings; which all these tend to positively influence higher economic growth. The Basic Education Coalition (2011) recently summarized some of the evidence, which suggests: On average, individuals’ earnings increase by 10% for each year of school completed. Countries that have experienced surges in literacy rates by 20-30% have seen simultaneous increases in GDP of 8-16%. Heavy investment in primary education has been found to be the single most important factor accounting for differences in growth rates between countries in East Asia and those in sub-Saharan Africa. 1 Globally, 132 million children have not even made it to the doors of a primary or secondary school. And many more are in school but are receiving such a poor quality of education that they are not developing the capacities they need to thrive. A total of 250 million children cannot read, write or count well, and 200 million youth leave school without the skills they need to contribute in society and find jobs. 2 Universal primary school attendance was established as one of the United Nations’ Millennium Development Goals in 2000. Since that time, significant progress has been made; enrollment in primary education in developing regions reached 90 percent in 2010, up from 82 percent in 1999. Despite this progress, a large portion of the world’s population is growing up uneducated or undereducated, a reality that no longer has an impact only on the child’s country of birth. 3 Public expenditure on education as a percentage of GDP gives an indication of how a country prioritizes education in relation to its overall allocation of resources. Public expenditure on education includes spending on schools, universities and other public and private institutions involved in delivering or supporting educational services. Expenditure on educational institutions is not limited to expenditure on instructional services but also includes public expenditure on ancillary services for students and families, where these services are provided through educational institutions. At the tertiary level, spending on research and development can also be significant and is included in this indicator, to the extent that the research is performed by educational institutions. All Organization for Economic Co-operation and Development (OECD) countries invest a substantial proportion of national resources in education. OECD countries, on average, spend around 5. 1% of their GDP on educational institutions at primary, secondary and tertiary levels, as in 2011. However, total expenditure on education ranges from above 6% of GDP in the Ireland, New Zealand and Nordic countries to less around 4% in the Czech Republic, Chile, Japan and the Slovak Republic. Although Rwanda has sustained a strong political commitment to improve education access and quality, placing the country on a planned trajectory towards achieving quality basic education for all, the country is far from reaching the goal of universal primary education, with only half the children completing primary school. The growth of the education system has also created new challenges however, including the urgency of improving internal efficiency for all education cycles and to reduce significant disparities by area of residence and standard of living. But in Rwanda, education spending in percentage of GDP was 4. 8 (2011). The education level in Rwanda remains low despite the implementation of policies such as mandatory education for primary school (six years) and lower secondary schooling (three years) as run by state schools. 5 The guiding principles of higher education in India are expansion, inclusion and excellence, which are the powerful forces for economic and social changes of the people. India has the population of 1. 21 crore as per 2011 Census next to China. This population can be converted into population dividend. This could not be achieved without necessary financial resources with proper accountability. The following table explains the trends in expenditure on education as percentage of GDP by the Government of India (Central and State Governments combined) Expenditure on education as percentage of GDP by the Government of India S. No Years % of GDP 1 2000-01 (A) 3. 45 2 2001-02 (A) 2. 98 3 2002-03 (A) 2. 96 4 2003-04 (A) 2. 79 5 2004-05 (A) 2. 60 6 2005-06 (A) 2. 60 7 2006-07 (A) 2. 68 8 2007-08 (RE) 2. 58 9 2008-09 (RE) 3. 01 10 2009-10 (RE) 3. 23 Source: RBI as obtained from Budget Document of Union and State Governments. Revised Estimates From the above table it is understood that funds allotted for education in proportion to the GDP is only around 3 percent per annum against the norm of 6 percent, i. e. , 3 percent should go to elementary education, 1. 5 percent to secondary education, 1 percent to higher education and for technical education 0. 5 percent as recommended by the Kothari Commission on Educational Reforms 1964-66. Conclusion: Education and economic development are closely related. The reality is that economic development is increasingly a function of availability of human capital. Investment in education, or human capital, is an important element in the economic development process. The world, especially developing countries are not taking advantage of its most important resource i. e. , labour force which can be converted into human capital. We can not ignore the responsibility of Government has to play a major role in human resource development which is associated with higher productivity, higher earnings, an increased skills level of the population is expected to contribute not only to economic growth but also to poverty reduction. The government should fight for basic education for all, improving the education quality, impart knowledge and skills to its human resources, increase the living standard of the population and poverty reduction. All these can be attained by allocating more funds for the Public expenditure on education as a percentage of GDP which would prioritize education and in the same way contribute to the economic development by knowledge economy.