Higher Education Ministry and Equity in Education


Minister of Higher Education and Highways Lakshman Kiriella

By Sam Samarasinghe

The Island (September 25, 2016) in a news report captioned "FUTA Questions Rationale Behind Combining Higher Education with Highways" says that the Federation of University Teachers Associations (FUTA) has expressed its displeasure at combining the Ministry of Higher Education with the Ministry of Highways. May be President Maithripala Sirisena and Prime Minister Ranil Wickramasinghe felt that because the names of the two ministries begin with the letter "H", that is a good enough reason to combine the two under one cabinet minister.

More seriously this calls into question the seriousness with which the new government is treating higher education. Sri Lanka does not have natural resource such as oil to sell to the rest of the world. The country’s main resource is its people. Education is key to the nation’s future prosperity. FUTA has stressed the importance of increasing government spending on education to at least 6% of GDP. The Sirisena/Wicramaasinghe election manifesto accepted it as policy.

Government Spending on Education

FUTA is right to insist that the government should spend more on education although 6% of GDP is a somewhat arbitrary number. In 2013 Sri Lanka’s government spent only 1.7% of GDP on education. India spent 3.9%, Malaysia 5.9%, South Korea 4.6%. There are countries, some rich and others poor, that spend considerably more than 6% of GDP on state education.

The percentage partly depends on the split between private spending and state spending on education. In Sri Lanka it appears that in the last three to four decades the government has gradually shifted the responsibility of financing education to the private sector, that in practice means individuals and families. The tremendous growth of private tuition, international schools and private university education is prima facie evidence of this trend. Government Household Expenditure Survey data also support this observation. In 2006/7 average household spending on education accounted for 2.8%, in 2009/10 4.2%, and in 2012/13 3.5%.


The household expenditure date also show that urban households spend the highest share (4.7% in 2012/13), rural second highest (3.2%) and estate the lowest (1.8%). This difference could be because of income differences. In 2012/13 the mean monthly income for an urban household was about Rs 70,000. For a rural household it was Rs 41,500 (59% of the urban) and for an estate household Rs 30,000 (43%). The inequity in private spending on education is even worse than what the above figures reveal. First, the average urban household spent about Rs 2,775 per month on education, rural Rs 1,215 and estate Rs 525. The rural and the estate children are at a clear disadvantage. Second, although we do not have reliable quantitative data, it is reasonable to suggest that urban state schools are the best endowed in terms of teachers and facilities, followed by rural schools and then estate schools. In short our "free" education is freer and more privileged for some and less free and less privileged for others.

Social Benefits

The research literature on the economics of education carry plenty of evidence that the highest social benefits from government spending on education come from primary education, next from secondary education and so on. For example, mothers with a primary education who can read and understand simple instructions on how to administer oral rehydration therapy can help reduce infant mortality. Farmers who can read and understand instruction in the use of agro-chemicals are better farmers. Thus state spending on primary education has substantial social benefits. At the other end state spending on university education while yielding some social benefits also bring relatively significant direct private benefits to those who get a university degree. Thus in a situation where tax rupees are scarce, there is less justification for heavily subsidizing university education in general.

Rational Policy

In 2014 the government collected a little over Rs 1,050 billion in taxes. Of this amount only about Rs 198 billion (less than 20%) came from income taxes. The balance mainly came from VAT, excise taxes and import duties. These are regressive taxes in the sense that the poor pay a higher percentage of their income/expenditure in such taxes. Thus it is unfair to expect the poor to finance the education of the relatively rich in society.

A rational policy should generously subsidize students entering universities from relatively poor families. The ideal scheme, if practicable, is to ask those who are better off to bear at least a part of the cost of university education. Note that children from better off families who fail to gain admission to medical, engineering and other "desirable" courses in local state universities literally spend millions of rupees to enter private/foreign universities.


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