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Freeing education of financial constraints in South Asia

May 10, 2010

Education budgeting in Bangladesh, Nepal and Sri Lanka, discusses how economic and financial constraints in South Asia have forced governments to adopt cautious policies on public expenditure, especially in education. This work presents diverse experiences of how budgetary procedures are organised and implemented.

Education budgeting in Bangladesh, Nepal and Sri Lanka

Publisher: UNESCO, 2009

Economic and financial constraints in South Asia, as in other parts of the world, have required governments to adopt cautious policies on public expenditure. Education, which constitutes an important part of central government expenditure in national budgets, has been among the sectors affected by these financial constraints.


The choice between the needs of education systems and those of other sectors where the state contributes (health care, social security, infrastructure development, etc.) has always been difficult. Ministries of education have to justify the use of resources earmarked for them, as well as additional funding they may request.

Within the context of limited public resources, governments have to ensure the most prudent use of their funds. Sound management of such funds requires rules, regulations, procedures and analyses. The budget is an essential instrument through which the political choices of governments are translated into practical outputs.

For the ministry of education, as for other government ministries, the budget represents a tool for planning and administration that determines resources required for achieving annual development goals.

The budgetary process is carried out in any setting where resources are to be divided among numerous claimants. Budgeting is a processor transforming financial resources into services for human purposes. Resources are limited, but human desires are not. Hence, some way must be found to divide available resources among competing services.

The budget serves diverse purposes, and behind every government budget– which necessarily takes revenues from some citizens and distributes them to others – lie conflicts. A budget may therefore be considered as a record of past victories, defeats, bargaining and compromises over past allocations, as reflected in the items included and excluded.

It is also a statement about the future. It attempts to link proposed expenditure with desirable future events. A budget must therefore consist of plans. It should try to determine future states of affairs through a series of current actions. Hence, budgets are also predictions.

Preparation of the budget provides the ministry of education with an opportunity to focus on its short-term objectives, to evaluate the resources needed to achieve these objectives, and to prepare technical files which would enable the ministry of education to present its position in the most favourable way in the course of negotiations and budgetary decision-making.

Budgetary procedures allow the ministry of education to allocate actual resources to different regions and educational institutions. The process of budget implementation provides the ministry of education with an opportunity to analyse the criteria of resource allocation with a view to achieving an equitable and efficient distribution of funds.

Bangladesh, Nepal and Sri Lanka are among the developing countries in South Asia trying to improve the development of their education systems through better public financing of schools. In spite of the relatively healthy economic growth observed in the three countries over recent years, their governments’ fiscal and non-fiscal revenues remain limited at a time of urgent financial need for development, in particular, development of social sectors, in the face of increasing competition in the region.

This situation has led governments to allocate resources more carefully to various development sectors, including education, and to better monitor use of these resources. The shares of Gross Domestic Product (GDP) and public expenditure on education in these countries remain the lowest in South Asia.

A budget is a policy instrument used to allocate resources to education and a management tool for setting priorities within the education system, allocating resources to priority areas and monitoring the use of public funds.

Since governments have limited resources to invest in education, they must rigorously assess the sector’s needs, prioritise accordingly, and monitor the use of resources in responding to these needs.

This work presents diverse experiences of how budgetary procedures are organized and carried out. It analyses their strengths and weaknesses, and provides recommendations on how procedure can be improved in the ministries in charge of education in three South Asian countries – Bangladesh, Nepal and Sri Lanka.

The book outlines procedures related mainly to the allocation function of the budget, given that the budget is used as the means of allocating public resources in the provision of a mix of social services such as health, education, infrastructure and defense.

As a comparative work, the publication stresses similarities and differences in the main patterns of the budgeting process in the three countries. It seeks to contribute to the knowledge base on mechanisms used by governments to address the challenges of making education policy decisions in the context of financial constraints.

The experiences described in this publication may also be useful to counterparts in other countries who are seeking to improve the provision of education in the context of limited public resources.

Source : UNESCO
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