The government plans to increase the 2 per cent education cess in the coming Budget, but it is not going to mean more money for education.

The reason is that the education cess collected in the current financial year merely acted as a substitute for government allocation to education rather than supplementing it.

A total of Rs 8,746 crore (Rs 87.46 billion) was the amount transferred to the human resource development ministry as the money collected as education cess in the financial year 2006-07. The money was transferred to the Prathmik Shiksha Kosh and divided between Sarva Siksha Abhiyan and Mid-day Meal Scheme.

While Rs 2,915 crore (Rs 29.15 billion) was allocated for the Mid-day Meal Scheme from the Prathmik Shiksha Kosh, Rs 5,831 crore (Rs 58.31 billion) was handed over to Sarva Shiksha Abhiyan from the Kosh. In addition to the cess money, the government allocation to the Mid-day Meal Scheme was a mere Rs 2,433 crore (Rs 24.33 billion), while for SSA it was Rs 5,169 crore (Rs 51.69 billion).

This means a drastic cut in allocation from the previous year's budgetary allocation of Rs 7,156 crore (Rs 71.56 billion) in the case of SSA.

The 2005-06 allocation for the Mid-day Meal Scheme was Rs 3,010 crore (Rs 30.10 billion). This also came down to 2,433 crore.

Finance Minister P Chidambaram, however, in his budget speech last year announced the allocation for both SSA and Mid-day Meal Scheme as if there had been a dramatic increase in the government expenditure. "I propose to increase the outlay for SSA from Rs 7,156 crore to Rs 10,041 crore (Rs 100.41 billion) in 2006-07 . . . the allocation for Mid-day Meal Scheme from Rs 3,010 crore to Rs 4,813 crore (Rs 48.13 billion)," he said.

What it actually translated into was that the government would pay less for both the schemes in future and the bills would be partly met by the education cess. He was silent on the fact that the money collected from the cess was not in addition to the increased amount announced for education.

He merely said, "In 2006-07, we shall transfer Rs 8,746 crore (Rs 87.46 billion) to the Prathmik Shiksha Kosh from the revenues raised through the education cess."

Union human resources ministry officials, already reeling under reports from the Planning Commission of reduction in allocation for education programmes like language education and appointment of Sanskrit teachers in the coming Budget, however defend the cutting of expenses in SSA and the Mid-day meal Scheme.

"The states should also be able to absorb the money. What is the point in increasing the allocation?" asked a senior official.

The officials said that many small schemes were being abandoned or reworked to consolidate the work of the ministry. The ministry might absorb many of these small independent schemes in its larger schemes, they added.

• Run-up to the Budget 2007-08: Coverage