In a country like India, the primary education plays an important role in shaping the citizens and society. The Government of India has spent crores of rupees every year for developing the educational infrastructure in the country. But the real question is, whether the money is going in to the right hand and the expenditures are funded in a productive way. This article analyzes the status of fund allocation to education system in India in the light of union budget 2004-05.

Just a decade back, in India, in the villages of Northern India, primary schools were found to be in ramshackle. Most of the landlords were using the school buildings as their own property and a majority of the teachers were found to be abstaining from duty. This is despite the fact, that the Union Government spends crores of money on education year after year. The reason for this pathetic condition of education in the Indian economy is due to the fact that the money prearranged for the education sector is sucked into gigantic fissure of ineptitude and deception.

In 1986 and 1992, the National Policy on Education and the Policy of Action respectively guaranteed free and compulsory education to all children up to the age of 14 years before the beginning of the 21st century. In December 1993, India hosted the "Education for All" summit, where in nine countries, Bangladesh, Brazil, Pakistan, Nigeria, Mexico, Indonesia, Egypt, China and India participated. It was during this meeting that the Delhi declaration was adopted which laid emphasis on education for all children. In the summit, it was announced that India would spend 6% of its Gross National Product (GNP) on education. The major objectives of the pronouncement were to endow universal admittance to education by opening new schools in unreserved habitations and superior school milieu.