Data from the NIRF Rankings indicates one common feature across different types of educational institutions: the operational expenditure accounts for a large chunk of the total expenditure. On average, this share is almost greater than 80%.
In the first part of the series on the National Institutional Ranking Framework (NIRF), we looked at the genesis and the methodology behind the rankings. In the second part, the focus was on the comparison between the top 100 institutions vis-à-vis the rest. In this third part, we look at another crucial aspect of institutions – financial resources such as expenditures – both capital and revenue and look at its impact on the overall ranking of institutions.
Operational expenditure across institutions account for more than 80% of total expenditure.
Expenditures of educational institutions can be classified into capital expenditure and operational expenditure. Capital expenditure includes expenditures on libraries, equipment and software, workshops, and expenditure on the creation of capital assets. Operational expenditure includes expenditure on maintenance of academic infrastructure/consumables and salaries for teaching and non-teaching staff.
Analysing the data on expenditures, one common feature emerged across different types of educational institutions: operational expenditure accounts for a large chunk of the total expenditure. On an average, this share is almost greater than 80%.
3/5th of the operational expenditure is for salaries for teaching and non-teaching staff.
As mentioned earlier, operational expenditure includes salaries as well as maintenance of infrastructure and consumables. It is observed that salaries account for almost 60% of the total operational expenditure incurred by institutions. Among the different categories of institutions, colleges spend more than 85% of their operational expenditure on salaries, while management institutions spend between 40-50% of their operational expenditure on salaries. Engineering, pharmacy, and universities spend approximately 60% of their operational expenditure on salaries.
Expenditure on libraries remains the lowest among the capital expenditures.
Among the major capital expenditure heads, three major forms of expenditure incurred can be seen: Libraries, new equipment for laboratories and other expenditure on the creation of capital assets. The other minor capital expenditures include workshops, studios, and the upgradation of laboratories.
The data on the type of capital expenditure incurred shows that the bulk of the expenditure is on new equipment for laboratories and the creation of other capital assets. Expenditure on libraries remains a minute fraction of the total capital expenditure. Considering the importance that libraries play in fulfilling the objective of empowering students with the necessary skills and knowledge for academic success while also enhancing their employability prospects, it becomes important to increase the expenditure on libraries.
Is there an impact of capital expenditure on the overall NIRF rankings?
From our first part of this series, it is clear that the ranking of academic institutions also takes into account the financial resources and utilizations, and research publications among others. It is commonly conceived that more expenditure on these aspects can lead to better rankings. But how far does the capital expenditure influence the NIRF rankings, considering other things remain almost constant? We look at it by looking at some examples.
Upon looking at the data, we find that there is no strong evidence to establish any correlation, whether positive or negative, between capital expenditure (only expenditure on libraries, new equipment for labs, and other expenditures for the creation of capital assets are considered) and ranking. Taking the example of IIT Kharagpur under the Engineering category, we find that the capital expenditure for the 2019 ranking year stood at Rs.113.32 Crores when it secured 4th rank. For 2020, the capital expenditure rose to Rs. 235.6 Crores, while securing 5th place. In 2021, the expenditure had been Rs. 174 Crores and in 2022, it was Rs.210 Crores while maintaining the 5th position. In 2023, the capital expenditure had been Rs.184 Crores, while fell to 6th position.
Similarly, IIT Bombay consistently secured 3rd position among engineering colleges, irrespective of its capital expenditure. For BITS-Pilani, capital expenditure for the 2019 ranking year stood at Rs.42.44 Crores, where it secured 25th rank. For 2020, the capital expenditure rose to Rs. 142.14 Crores, while declining to 30th rank.
There is no clear pattern that can be seen, assuming the remaining factors remain the same. The trend is the same across institutions and for various types of institutions.
Ultimately, rankings remain a complex phenomenon where multiple factors come into play. Consistently scoring better on all fronts looks like the only way to improve one’s respective rank.
Featured Image: NIRF Rankings
