Beruflich Dokumente
Kultur Dokumente
By
Bhagwani Bai
LDPS 8132
University of Memphis
Introduction:
Pakistan ranks at the lowest level in education in the world and is among the 12 countries
in the world that spent less than 2 percent of their GDP on education sector (Ahmed et, al, 2004,
p. 82) Access to primary education, high dropout rate and low quality education are major
3) Social, economic and demographic factor contribute negatively in these challenges. According
to ASER Pakistan report 2012 as cited in Malik, 2015, p. 5, those who complete primary
education in rural areas of Pakistan are for behind in achieving learning outcomes. Insufficient
spending in education is one of the major cause of lack of access and poor quality of education in
Pakistan. (p.8) Although, Government of Pakistan has been making commitments since 1992 to
spend 4% of its GDP on education but this target never exceeded from 2% of GDP. According to
Education for All (EFA) monitoring report 2015, Pakistan need to increase per pupil expenditure
10 more in primary education, and three time more proportion of GDP to meet the EFA goals in
There are limited number of studies are done on education funding in Pakistan, and those
available are done at small scale and mostly district budget analysis of selected district. There is
lack of research on school finance as a sub-sector of education and limited empirical work on
funding allocation mechanism. Through this explorative analysis, literature on school finance in
Pakistan was reviewed and compiled in three main section. Section one is introductory, describes
the fund allocation mechanism in Pakistan overall and education specifically, section two
describe equity and adequacy in school finance, third section presents challenges in education
fund allocation at provincial, district and school level and final part present recommendation for
meeting the challenges of school funding allocation in Pakistan and implication for school
finance. After 18th Amendment, provinces are more autonomous and has its own planning and
from province to province. I chose Sindh provinces for looking at provincial, district and school
Pakistan has federal government structure with having five federation units/provinces,
FATA and disputed Kashmir. Power representation, resource allocations to provinces and the
exploitation of natural resources remained point of contradiction between and federal and
provinces since Independence. As the allocation of resources were based on population of the
province, Punjab, the largest provinces get the most part of federal funds and other provinces
instead of severe backwardness and poverty could not get enough funding share from the federal
government. (Jalal, 1999, p. 220 as cited in Adeney 2012, p. 549) The federal system of Pakistan
allocated funds in unequitable criteria among provinces and center that backwardness and other
The 18th Amendment is considered an important step towards minimizing the tension
between provinces and center and among provinces as well where Punjab is getting more share
of political power and financial resources from the federal government. (Adeney, 2012, p. 559) If
we see the roots of this imbalance allocation of resources, or ignorance of diversified needs of
2012 traced it historically and make liable the elite power (word establishment is used in local
context) who for the national integration of Islamic identity delegitimized the diversified
identities of provinces. (Adeney, 2007, p. 99-104 as cited in Adeney, 2012, p. 544 and 550)
NFC Award and 18th Amendment
Keeping in view the tensions on power, resources and autonomy of provinces, in 2010,
amendment were made in constitution and provinces were given more autonomy and changes
were made in National Financial Commission Award (NFC, a set of funding formulas to allocate
funds to federal and provincial government for five years). Before 2009, these funding formulas
were based on population of the province but in 7th NFC award, inverse population destiny and
poverty indicators were added to the funding formulas. After 18th amendment bill was passed in
2010 with consensus of all political parties and provinces were given provincial powers, with
change in formula for the vertical and horizontal distribution of resources. As a result, from 2010
the allocation was divided 57.5 percent for provinces and center was allocated 42.5 percent of
total revenues with change in criteria that 82 percent of resources allocated to the provinces was
revenue generation and collection, and 2.7 percent for inverse population density. (Adeney, 2012,
p. 547-549)
In 2001 provincial financial commission were formed having authority to allocate funds
to the district government. The PFC is headed by Minister Finance/Advisor to Chief Minister
Sindh for Finance. PFC following the formula of 40% on population, 35% on infrastructure
services, 10% development needs, 5% area and 10% performance allocate the funds to the
and government become responsible to provide free and compulsory education for children aged
5-16years with financial implication in Article 25-A of the constitution. Making education legal
right shows a commitment for state towards education. Government of Pakistan made
events (Alif Ailaan, p. 1) but the spending on education in Pakistan has remained under 2% of
GDP for the past 20 years. Malik and Naveed, 2012 p.7, GOP/UNESCO, 2014, p.14)
After the devolution of power to the provinces and making provinces more autonomous
and policy decisions along with number of sectors, planning, financing and implementation of
primary to higher secondary education become responsibility of provinces excluding the higher
education that remains under the authority of federal government. This change made provincial
governments responsible for making budgetary allocation decisions, such as the allocation of
resources to various subsectors, development programs, etc. (Malik, 2015, p. 11) The major
change in education sector after 18th amendment is the devolution of policy decisions such as
curriculum and policy formation that was federal governments responsibility since 1973.
(GOP/UNESCO, 2014, p. 9)
available to the people that how this mechanism works. The allocation of funds to the schools is
almost a year long process start in September and end on June every year and in June, after
approval the line ministries and departments are allocated funds for expenditure.
In Pakistan, funds allocation is done at three levels - Federal, Provincial and the District
with almost similar allocation approach at all levels. As we have discussed above that the federal
government under National Finance Commission (NFC) allocates funds to the provinces. Each
province prepares their budget from the funds received from federal government and its own
revenue from the tax through the sources within province which makes up to 10% of total budget
of the province. There is variance in tax revenue among the provinces, i.e. Pujab generate 11% of
its revenues form provincial tax (World Bank, 2014, as cited on Malik 2015, p. 11) whereas,
Balochistan raise only 3%. (GoB, 2013 as cited in Malik, 2015, p.11) Following almost same
allocation approach provinces through Provincial Finance Commissions (PFCs) allocate funds to
district governments. Further districts prepare their own budget based on provincial allocation
formula for recourse allocation to districts and schools in education sector and difference in
allocation approaches among the provinces, I chose Sindh Province to see how funds allocation
mechanism work at provincial, district and school level. After discussion with officials at public
education department and website the below funding flow is drawn. In addition to federal funds,
provincial revenues, there is international aid for education as well that are implemented in shape
of different projects in the districts. There is shift of international funding from public schools to
higher education in recent years. (Malik, 2015, p. 16) After 18th Amendment, there is increase in
fund allocation in education has been noticed. For example, in 2009 7 th NFC award, provinces
were allocated 20% of its total allocation in education and province further followed the trend
such as, Punjab allocated close to 24% of its total budget on education, Sindh has allocated 22%,
KPK 26%, and Baluchistan 19% (I-SAPS. 2014, p. xvii) The recent report of Alif Ailaan, 2015
shows that Sindh provinces is lowest among all provinces in funding increase percentage from
2013-2014 to 2015-2016 budget allocation to education from its total budget of the province. (p.
3)
District Level
At district level there are two major categories of budget current and development, the
first includes administration cost of department offices at district and tehsil level, and
development cost include maintenance and development of school infrastructure. The second
category falls under education sector but funds are allocated and managed separately with
another department called works department. All the development related funds such as
construction of schools, maintenance and repair of schools building etc. are allocated to works
department. The salary of staff is centralized and managed at provincial level. (Umerani, 2013,
12)
The education budget formulation process starts by the invitation of Executive District
Officer Finance and Planning (EDO- F&P) to EDO education with the breakup of salary and
non-salary estimation. (Umerani, 2013, p. 14) The non-salary budget is not prepared on actual
needs of school instead and certain proportion is added to the previous year budget. Schools are
not consulted for their needs, and sometime proposed budget is slashed down by District Officer
Finance and Planning. The budgeting activity is considered as a formality that is done every year.
(Umerani, 2013, p. 15) After finalization of funds allocation by EDO education and DO F&P the
19)
School Level
In recent years, school based budget has been introduced and all 23 districts of the
province at primary, middle, secondary and high and higher secondary school level following the
formula of 20% on school level, 45% on student enrollment and 35% on number of classrooms.
Within the 20% of the budget allocated for distribution on the basis of school level, 50% is
allotted for distribution among primary schools, 10% for distribution among middle schools,
15% among elementary schools, and 25% among high and higher secondary schools, up to
specified ceilings. Use of school non salary budgets by primary, middle, and elementary schools
is limited to certain stipulated categories of expenditures (travel expenses for teachers, stationery,
Odden and Picus 2014 defined equity in three different principles that define the
distribution of resources equitability. 1. Horizontal equity in which all members of the group are
considered equal, (2) vertical equity, in which differences (for which unequal resource
distributions are legitimate) among members of the group are recognized; and (3) equal
opportunity, (fiscal neutrality) which identifies variables such as property value per pupil that
should not be related to resource distribution. (p. 46) In horizontal equity, without considering
the diversified needs of students, schools, districts allocated funds on equal basis. Equal
treatment for equal principle assume that all students are alike and spending should be same
across, district and state. (p. 56) On the contrary, vertical equity acknowledge the different
among the students and their diversified needs and this approach believe that all students are not
alike and some students needs are different than others. Unequal treatment of unequal
characteristics of students, districts and programs. Characteristic of students can include, mental
and physical disabilities, low income background, limited English proficiency and gifted and
talented students. District characteristic contains price, scale economies, transportation, energy
costs, and enrollment growth and variance in these indicators has impact on education. Provision
The concept of adequacy not only focus on the provision of a set of strategies, programs,
curriculum, and instruction, in accordance with diversified needs of students, districts and
schools but it focus on output that every students achievements as per set standards for all
children as well. As the adequate school finance approach focus on both input and output level
at input level, adjustment of resource allocation as per students special needs and districts
wealth and spending per pupil and at output level every students achievement as per minimum
set standard is considered the major criteria for recourse allocation to the schools. (Odden and
The most prevailing issue in funds allocation mechanism is the unavailability of sector
specific fund allocation information that show the funding formula and criteria of allocation of
funds to the districts and school. For this study, after reviewing several government websites,
manuals and related documents, access to required funding allocation formulas was not ensured.
This challenge has been highlighted in Umerani, 2103 as well where he writes that sector
specific budget allocation information is not available in easy and understandable form to the
people. And there no law for right to access to information exist in the country. (p. 20) Malik,
2015 has highlighted the unclear funding formula to allocate education funds to the districts. Due
to population a major criterion for establishment of primary schools, poor, remote, and under
developed districts get less money due to scattered population. Population based fund allocation
is one the reasons of establishment of school on long distance and single teacher schools that
ultimately effects the access of girls to the school and quality of education due to multi grade
teaching. (Malik, 2015, p. 14)
The administration staff of education department both at tehsil and school level are not
involved in budget formulation process and were found unaware of different budget terminology.
Delay in transfer of approved budget to the concerned offices is noticed due to hierarchal
formalities. This delay is one the major cause of underspending of re-appropriation in approved
budget. Most of the primary schools are not provided non-salary budget and is utilized at sub-
district offices. This cause lack of basic facilities such as water, electricity etc. Furthermore, the
budget allocation formats are traditional and mostly districts and sub-districts offices do not
make any changes by adding new budget head and follow old forms only. (Umerani, 20014, p.
20)
I-SAP 2010 study of five district of Baluchistan shows that the lack of connection
between fund allocation to the quality of education as the budget only reflect salary and non-
salary cost and development cost. (cited on Umerani, 2013, p. 120 Oden and Picas 2014 says
that budget the reflection of goal and priorities of state. And from this exploration of material
available on school funds allocation in Pakistan it clearly reflects lack of focus on quality of
education.
Inadequate funds allocation in education sector remained a problem and only 7-8% of
total budget has been allocated to education. At the same time, expenditure against allocated
budget remained very low and different budget assessment reports show serious concern on this
aspect as well. The Public Financial Management Accountability Assessment 201, as cited on
Umerani, 2013 that 2008-2009 and 2009-2010 budget shows 26% and 28% under spending. I-
SAPS, 2014 as cited in Malik, 2014, p. 12 shows that in 2003-2014 report shows only quarter of
its budget were spent overall but 60% of development remained unspent for year. This
underutilization is reflection of the issues such as over ambitious estimation, poor absorption
capacity at district level, slow, erratic and delayed realizing of funds to districts, improper and
inadequate budget preparation process (Umerrani, 2013, p. 13) and poor coordination between
DO F&P and DC has authority of making budget cut and re-appropriation. This modification is
happened due to political influence and use of power discretion of district authorities. Political
influence is seen high in mega education development projects where mostly its feasibility and
other merits are ignored. (Umerani, 2013, p. 12) Malik 2015 has highlighted political influence
in inequitable distribution of resources where mostly poor and remote districts dont get adequate
recourses and more developed districts get more allocation. I-SAPS, 2014 has brought
As the international aid is one of the major funding sources in education in Pakistan. It is
estimated that closely 30 donor agencies are working in education sector, but lack of
federal government become weak and the existing international fund tracking mechanisms has
become obsolete because of direct funding to provinces. The donor funding to private schools
has become one of the major contribution in education. There is controversy even among
government official and policy researchers on the strengthening and supporting of private
schools. Some believe that it will provide opportunities to the people when there is huge gap in
public sector education in Pakistan, Other see the strengthening of private schools is not a
sustainable initiative rather a stop-gap measure. Equity and adequacy issues in the funding to
low fee private school should not be ignored and there need to have tracking system to assess
international aid in promoting equity and adequacy in education. (Malik, 2015, 19)
increase tax revenues through reforming both federal and provincial level tax systems.
Keeping in view the gap in coordination between education and finance sector that cause
inequitable and inadequate resource allocation, there need to strengthen the coordination
among government departments from federal, provincial, and district level. At district level,
District education officer should be the focal person for educational matters by giving
priority to school specific budgeting keeping individual school requirements. Umerani, 2013,
p. 46)
For the tracking and getting maximum benefit of international aid for education there is need
to develop a policy with fund disbursement protocol and tracking mechanism to avoid
duplication and inequitable distribution of international funds in the education sector. (Malik,
2015, p. 17) Furthermore, keeping in consideration low level of access and quality education,
donor funding on education with private sector mostly focus on outcomes and result based
approaches but there need to be studied the effectiveness of this support in an education
It was seen that allocation of funds depend on population but even allocation on the basis of
population is not accurate because population census has not been done since 1998. There is
need to conduct census so that most recent population is determined and planning and
implementation should not be based on outdated available data. There is need of school
census that will provide complete picture of public and private schools in the country and the
that data should be used for planning and resource allocation (Mailk, 2015, p. 22) as per
specific needs of the districts and schools keeping all social, demographic, and economic
indicators in consideration that Adeney 2012 has highlighted about after 18th amendment bill
provinces are still struggling with. The poor and insufficient official documentation on the
provision of funds to the schools require to develop management information system for
informed decision making in fund allocation but access of that information should be made to
the people through policy formation on right to information. (Umerani, 2013, p. 47)
cause inequitable, inadequate and inefficient funding allocations to the schools. The funding
capacity on budgeting and planning and avoid political influence in resource allocation at
The finding of this explorative study shows that the fund allocation to schools is
complicated and vague that not only common people but grassroots level officials are not aware
of its rationality and criteria of its allocation to the districts and schools. Different studies have
identified gaps between allocation, and management of funds due to inequitable, and inefficient
funding mechanism. Funding allocation form federal to provinces and then districts is
contradictory. After 18th amendment measures were taken to change the allocation formula but
still provinces with low tax revenue are the victim of inequitable distribution of funds due to
inequitable fund allocation criteria. Pakistans weak economic condition is the harsh fact that
needs some reforms at country and provincial levels to generate funds overall and for education
specifically to meet the goals. This need to reform funding mechanism with making schools and
students as center of education budget with simple and fast track fund management mechanism
with clear coordination among relevant offices and other stakeholders. (Umerani, 2013, p. 47)
It is important to track the allocation of funds with education sector that monitor the focus of
government is the old trend of education budget is spent on salaries? Or there is more focus is
While looking at funding mechanisms, and its challenges with equity and adequacy lens,
it is apparent that Pakistan education fund allocation mechanism and approach is more towards
horizontal where all the districts, population are considered alike and public funds are allocated
on Robin hood approach. It should also be noted that with horizontal equity approach there is
gaps of inefficiency and political influence that create hindrance in even equal distribution to
equal approach. The examples of I-SAPS, 20014, Umerani, 2013, Malik & Rose, 2015 have
presented these challenges. Adequate allocation approach is applied in bits in pieces especially
with foreign aid. There is need to conduct comprehensive study of equity and adequacy issues in
the funding system in Pakistan with all three levels that help in policy and practice change for
school finance should have been included to professional development programs for the staff. It
should also be included in education degree programs so that capacity gap can be minimized.
References:
Ahmed. I., Reham. K., Ali. A., Khan. I., & Khan. F. A. (2014) Critical analysis of the problems
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Alif Ailaan. (2015). Government allocation in education in Pakistan: The road to getting to 4%
Institute of Social and Policy Sciences (I-SAPS) (2014). Public financing of education in
Islamabad
Malik, R., & Rose, P. (2015). Financing education in Pakistan: Opportunities for action. Country
Malik, R., & Naveed, A. (2012). Financing education in Pakistan: The impact of public
expenditure and aid on educational outcomes (No. 42, p. 39). RECOUP working paper.
Government of Pakistan. (2014). Education for all 2015, National review repot Pakistan.
budget in district Tando Muhammad Khan and Matiari. Research Study on Budget
Odden, A. R., & Picus, L. (2014) School finance: A policy perspective, 5th edition. New York:
McGraw-Hill.
http://www.sindheducation.gov.pk/educationReforms/ssb.jsp