The writer is an
economist, anchor,
analyst and the
President of All
Pakistan Private
Schools’ Federation
president@Pakistan
privateschools.com
In the pursuit of a prosperous future, education stands as the cornerstone of societal progress, empowering individuals and nations alike. Recognizing the significance of adequate financing in the education sector, the Pakistan Institute of Education (PIE) under the leadership of
Federal Secretary Mr. Mohyyuddin Ahmed Wani for the Ministry of Federal Education and Professional Training, has undertaken a comprehensive analysis of public financing in Pakistan’s education sector. The publication “Public Financing in Education Sector-2022-23” provides a data-profile analysis of public financing, underscoring the imperative for optimized allocation, effective financial management, and targeted public financing to improve education quality and outcomes. As we strive to achieve Sustainable Development Goal 4, this study serves as a clarion call for sustained investment and evidence-based policy-making to address the persisting disparities and inequalities in Pakistan’s education sector. Recognizing education as the cornerstone of societal progress, the MOFEPT and PIE plays a vital role in driving research-led reforms and promoting evidence-based decision-making. Adequate financing in the education sector is essential to ensure that every child has access to quality education. The Ministry of Federal Education and Professional Training acknowledges the significance of robust investment in education and is committed to advocating for increased public financing in this critical sector. Financing plays a pivotal role in addressing various educational needs, such as improving infrastructure, providing modern resources and technologies, enhancing teacher training, and expanding access to education for marginalized communities. This enables the creation of an inclusive and supportive learning environment that nurtures the potential of every student. Investing in education is an investment in our future, contributing to the knowledge and skills of our citizens, ultimately fostering economic growth and social progress. By allocating adequate resources, we can foster innovation, creativity, and critical thinking, equipping our students with the tools they need to succeed in an increasingly complex and interconnected world. However, financing alone is insufficient; we must also ensure transparency, accountability, and effective resource management to optimize its impact. This involves implementing sound financial policies, promoting data-driven reasoning, and regularly evaluating the effectiveness of our investments. The Ministry of Federal Education and Professional Training remains dedicated to exploring new avenues of collaboration with the public-private sector to provide additional funding and support for education initiatives. This includes partnerships with private schools, national and international NGOs, collaborations with businesses and foundations, as well as engagement with educators, parents, and policymakers. Together, we can advocate for increased resources that empower our youth, strengthen our communities, and build a prosperous future for all. The forthcoming analyses in the report summarize several key aspects of public financing, including the education share in the total budget, spending (%) in relation to GDP, comparison between allocation and expenditure, distribution of funds between recurring and development budgets, and function-wise distribution of funds at the operational level. However, the report does not provide a breakdown of the budget into separate categories for salary and non-salary expenses. The research team at PIE, under the guidance of the Federal Secretary of Education and Professional Training Mr. Mohyyuddin Ahmad Wani, has collected and verified data from publicly available government documents, including annual budget statements, CGA reports, pink books, white papers, and citizen budgets. Additionally, feedback from the budget consultant has been incorporated into the report, enhancing its content and quality. The federal budget encompasses financial resources allocated to the Ministry of Federal Education and Professional Training, Higher Education Commission, National Vocational & Technical Training Commission, and other federal ministries for education services. In contrast, provincial budgets comprise allocations for Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan, while regional governments include Azad Jammu & Kashmir and Gilgit Baltistan.
According to the Pakistan Economic Survey (2023-24), public spending on education amounts to 1.5% of GDP in 2022-23. At the national level, the total budget allocation for 2022-23 is Rs. 12,156.063 billion, with Rs. 1,373.720 billion (11%) allocated for education, which is less than the 13% allocated in 2019-20. However, it is important to note that education is now a provincial subject after decentralization, and provinces and regions have spent an average of 18% of their budgets on education during the review period. The federal government has allocated Rs. 152.065 billion (3%) of its total budget for education, while provinces have allocated approximately one-fifth of their budgets. Punjab has allocated Rs. 490.681 billion (13%), Sindh Rs. 284.177 billion (14%), Khyber Pakhtunkhwa Rs. 308.387 billion (25%), and Balochistan Rs. 88.863 billion (16%) for education. At the regional level, AJK has allocated Rs. 35.315 billion (21%) and GB Rs. 14.232 billion (16%) for education. Total public expenditure on education at the national level amounts to Rs. 1,297.547 billion in 2022-23, compared to Rs. 936.037 billion in 2019-20. The federal government incurred 12% (Rs. 159.410 billion), provincial governments 84% (Rs. 1,089.302 billion), and regional governments 4% (Rs. 48.836 billion) of this expenditure. Budget utilization has remained constant, however, the Federal government underwent an over-spending of 105% which is mainly attributed to recurring expenses in Pre & Primary, Secondary and Tertiary Education as against the lowest utilization by KP i.e. 82% in the same year.
From the numerical elaborations, a gradual increase of 38% in allocation for the overall education budget (Rs.1,373.720 bn) is quite evident in 2022-23 proportionate to the one allocated in 2019-20 (Rs.997.272 bn). The federal government raised its allocation by 34% corresponding to 39% by Provincial and 28% by the regional governments during the same period. Allocation for the development budget increased by 31% and recurring by 39% in nominal terms. However, recurring allocation overwhelms the development budget at the national level as interpreted by 88:12 in 2022-23 (Annex-III).
An analytical review of the function-wise distribution of the education budget in 2022-23 shows each government’s priorities in different sub-sectors of education. The federal government prioritized ‘Tertiary Education’ by allocating a major chunk (80%) of its budget under this head. Conversely, ‘District Education Authorities (75%)’ and ‘Secondary Education (12%)’ in Punjab, ‘Secondary Education (31%)’ in Sindh, ‘Elementary & Secondary Education (74%)’ in KP and ‘Secondary Education (38%) in Balochistan, hold maximum priority in terms of sharing-out maximum budget. To drive qualitative advancements, it is imperative to allocate a substantial proportion of budgetary resources specifically towards addressing challenges related to access, quality, and equity in education. This targeted allocation will play a pivotal role in bringing about considerable improvements in the education system. The federal government has a constitutional obligation to enhance its share of public financing in education to at least 4% of GDP, which is in line with international commitments. Considerable discrepancies in allocation and expenditure necessitate the timely issuance of funds, coupled with capacity building for relevant education policymakers, planners, managers, institutions, organizations, and departments to ensure optimal and equitable utilization of allocated financial resources. Identifying impediments to poor fund utilization can also inform the development of a dynamic financial controlling system to accurately assess the performance of the education sector.
The publication “Public Financing in Education Sector-2022-23” provides a data-profile analysis of public financing, underscoring the imperative for optimized allocation, effective financial management, and targeted public financing to improve education quality and outcomes to achieve Sustainable Development Goal 4.
Given the current education landscape in Pakistan and the existing public financing scenario, a rigorous research study is strongly recommended to efficiently measure and critically evaluate public financing in ‘Pre-Primary to High School Education’ across all government levels. Emphasis is placed on this particular sub-sector due to its dense population, dominance in the education sector, and a significant portion of educational institutions with substantial enrolment. Furthermore, the Federal government aims to increase its education funds from the current 1.5% to at least 6%. Similarly, all Federal, Provincial, and Regional governments need to substantially increase their budgets for ‘Technical & Vocational Education’ to prepare the workforce with essential technical and vocational knowledge and skills. Provinces should also create additional financial resources beyond the NFC Award, rather than relying solely on Federal funding. To facilitate coordination among stakeholders, an applicable mechanism should be established to identify challenges impeding achievements at national and international levels, particularly the SDGs. Subsequently, strategic schemes may be perceived for the implementation of national policies and provincial education plans. Systematic evaluation of education financing is a newly introduced practice in Pakistan and post-decentralization, provinces must play their due role in arranging and managing educational financial resources. Provincial governments are responsible for providing free and compulsory education to all children in their respective areas, as per Article 25-A. Timely release of funds is crucial for initiating activities to achieve focused objectives. Therefore, rational approaches may be developed through productive scrutinizing to ensure the planned actions are executed within the scheduled timeframe. At the national level, the education budget for 2022-23 is predominantly allocated towards recurring expenditures, with a ratio of 88:12, indicating a significant disparity between recurring and development funding. Similarly, among provinces, approximately 20% of their total budgets are earmarked for education, but recurring expenditures consume a substantial portion of these funds. A more substantial allocation of development funds would likely yield effect-oriented academic services, facilitating the attainment of educational goals at both national and international levels. To ensure harmonious utilization of allocated finances, timely distribution of funds and capacity building of relevant educational personnel and organizations are essential. A vigilant regulatory financial system can help identify hurdles in poor fund utilization and upgrade the overall performance of the education sector. Notably, ‘Pre-Primary and Secondary Education’ is the most populous section of the education sector, accounting for 40% of the total education budget, despite having a large number of public sector educational institutions and enrolment. However, a significant number of children, approximately 20.2 million (77% of 26.2 million Out-of-School Children in Pakistan), remain out of school. Given the indispensability of this sub-sector in terms of population and budget, an extensive exploratory study is strongly emphasized to efficiently measure and critically evaluate public financing in this sub-sector. Simultaneously, substantial fiscal allocations can bring about quality changes in addressing the slowing-down challenges in the education sector, such as high illiteracy, insufficient infrastructure, low enrolments, high dropouts, and inequality in provision of schooling.
In conclusion, this comprehensive analysis has elucidated the complexities and disparities inherent in Pakistan’s education sector, particularly in regard to allocation and expenditure, budgeting, and public financing. Through a rigorous examination of recurring and development funds, provincial and national budgets, and the economics of education, this study has revealed a nuanced understanding of the challenges and opportunities facing Pakistan’s education system. The findings underscore the imperative for reform, emphasizing the need for optimized allocation, effective financial management, and targeted public financing to improve education quality and outcomes. Moreover, it highlights the critical role of public financing in achieving Sustainable Development Goal 4, underscoring the necessity for sustained investment and evidence-based policy-making to address the persisting disparities and inequalities in Pakistan’s education sector. Ultimately, this analysis contributes to the existing body of knowledge, providing a comprehensive framework for policymakers, researchers, and stakeholders to inform and shape the future of education in Pakistan.