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New Research Sheds Light on Efficiency of India’s Education Spending

https://www.wittenborg.eu/new-research-sheds-light-efficiency-indias-education-spending.htm

Researchers Find That Smarter Spending, Not Bigger Budgets, Drives Better Education Outcomes 

When India implemented the Right to Education (RTE) Act in 2010, it marked a historic commitment to ensuring elementary education for all children. But while the law guaranteed more funding for schools, questions remained about how effectively that money was spent. A new study published in Lex Localis – Journal of Local Self-Government dives into that very question, exploring the efficiency of public spending on elementary education across Indian states. 

The research conducted by Wittenborg’s Nikita Pahwa, Bojan Georgievski, Dadi Chen, Rauf Abdul, and retired Professor of Economics at the University of Mysore, Indira M., goes beyond simply tracking expenditure to examine whether resources actually translate into better educational outcomes.  

According to Pahwa, “This is a unique study in two ways. First, it applies the Malmquist Index as a novel methodology to measure the efficiency of public spending on education. Second, it examines the factors influencing educational outcomes in India, including the role of maternal education, governance quality and rural/urban settings.” 

To answer this, the team researched state-level data both before and after the RTE Act, combining Data Envelopment Analysis with the Malmquist Index to measure how efficiently states turned spending into results. They also examined key determinants of educational outcomes beyond budgets, such as governance quality, maternal education, and school location, providing a richer understanding of what drives success in education. 

The findings reveal a nuanced picture. Overall efficiency in spending improved after the RTE Act, rising from 83% to 93%. Yet, as Georgievski explains, “It is no longer enough to simply increase educational budgets; we must address the underlying 'efficiency gaps'—driven by factors like governance quality and maternal education—that prevent high-spending states from achieving the educational outcomes their citizens deserve.” 

The research shows that simply increasing funding is not sufficient to improve learning outcomes. Instead, targeted interventions that address governance, socio-economic factors, and community involvement are crucial.  

As Pahwa notes, “The study can be adapted to different economies and sectors to assess government spending efficiency across countries. It offers a practical framework for policymakers to evaluate public expenditure from an efficiency standpoint and highlights the importance of governance quality, school location and maternal education in explaining inter-state disparities and below-par educational outcomes.” 

By combining innovative methodology with real-life policy relevance, this study provides actionable insights for national and state-level policymakers. It highlights which investments actually drive results, how to close efficiency gaps, and what lessons can be applied globally. 

WUP 13/04/2025 
by Erene Roux 
©WUAS Press 

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