Impact of University Expenditure On Student Performance Written by by Dr. Jyoti Siwach

International Journal of Research in Economics and Social Sciences(IJRESS)
Available online at: http://euroasiapub.org

Vol. 9 Issue 7, July - 2019
ISSN(o): 2249-7382 | Impact Factor: 6.939 |
Effect of University Expenditure on Selected Performance Indicators

(With Special Reference to C.C.S. University Meerut)
Jyoti Siwach (Assistant Professor) SD College Muzaffarnagar &
Dr. Bharat Kumar(Assistant Professor) SPC(PG) Baghpat
Abstract
This article reports the results of an empirical study of the impact of University expenditure on
student performance in C.C.S University Meerut, using panel dataset constructed from the
C.C.S University campus.For this purpose we use some statistical and econometric tools by
using the performance indicators like graduation rate and average annual marks of students. The
term ‘per pupil expenditure’ is the more specific indication of university expenditure that
indicates the provision and allocation of resource inputs into university.The result of the
multiple regression models shows that per-pupil expenditure and pupil teacher ratio have
insignificant role in producing the academic attainment in terms of average annual marks and
graduation rate of PG and M.Phil level. Theaccess of university income over its expenditure
revels that university is not able to optimally use of its financial resources.
Keywords: University expenditure, educational attainment, Average annual marks, graduation
rate, pupil-teacher ratio
1. Introduction
University education plays a vital role in national development and welfare of society. Indian
higher education system has established itself as one of the largest system in the world in terms
of the number of institutions and student enrollment. Higher education is spending more rapidly
than the other level of education. The study discusses the impact of these developments on
efficiency of university. Efficiency of university depends on educational finances and financial
management. To determine optimum allocation of resources in a particular university and the
optimal use of financial resources of university can be measured by education attainment of
campus students.
In its size and diversity, India has one of the largest higher education systems in the world.
Before independence, access of higher education was very limited and elitist, with enrolment of
less than a million students in 500 colleges and 20 universities. Since Independence, the growth
has very impressive. Now, it is recorded fact that there is an increase of 26 times in the number
International Journal of Research in Economics and Social Science (IJRESS) 162

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of Universities, 64 times increase in the number of colleges, and the student enrolment has gone
up to 81 times in the formal system of higher education as compares to the figure of
independent Year of India. India presently has 611 universities, comprising 298 state
universities, 130 deemed Universities, 5 institutions established under the state legislations
(Annual Report MHRD 2011-12).According to the report of the Higher Education in India,
issues related to expansion, inclusiveness, quality and finance, the access to higher education
measured in terms of gross enrolment ratio (GER) increased from 0.7% in 1950-51 to 15% in
2012. And total allocation for higher education was only 170 million in 1950, which has gone
beyond 90,000 million in 2004-05. This impressive increase is offset to some extent by the rise
in prices and rise in the number of student entering higher education.
After the human capital theory was postulated by T.W. Shultz (1961) analysis and research on
higher education has been both extensive and intensive. The broad area of research include the
relationship between higher education and economy, modes of financing institutions of higher
education, the impact of different modes of funding on equity and quality, role of multiple
funding sources, efficiency of resources allocation and the cost effectiveness of educational
expenditure. We discuss the pattern of university income and expenditure and its effect on
student performance. According to the Mukherje, most of the studies in university finance in
India did not discuss the cause and effect relationship between the finances and educational
outcomes. There are lot of studies which are related to the finances in Indian universities such
as Chalam (1987), Panchamukhi (1975), Mathew (1991) and George K.K (1995) and so on. The
Indian Council of Social Science Research (ICSSR) and the University Grant Commission
(UGC) in early 1970’s felt the need to make elaborate studies on the financing on higher
education in India. These two organizations jointly sponsored a series of university finances and
approached selected universities for this purpose. The studies were conducted by Mathew, E.T
(kerala University), Jha, D. (Patana University) and Nigam, M.S.(Rajasthan University),
Mukharji, M. (Calcutta University) and Nanjundappa, D.M (Karnataka University).these studies
had more or less the same objectives and covered the major sources of income, income
adequacy of the income and the financial stresses which adversely affected the operational
efficiency of universities. This study investigates the financial health of university and its effect
on student performance with special reference to C.C. S University. Chaudhary Charan Singh
University was established in 1996, to cater to needs of higher education in western Uttar
Pradesh. It is one of the top leading universities in Meerut.

The present article has been planned with the following specific objective in mind:
 To analyze the relationship between university expenditure and student attainment with
the special reference to C.C.S University.
 To identify the academic attainment of arts and science students at PG and M. Phil
level.
 To identify the simple relationship (association) between the independent variable i.e.
student teacher ratio (STR), per pupil expenditure (PPE) and dependent variable
Graduation Rate and Average Annual Marks.
2. Data collection and Methodology

2.1. Data collection
In order to achieve the objective of the study the data have been collected through primary and
secondary sources of C.C.S University. Primary data regarding to the income and expenditure
of university have been collected from the Account department of C.C.S University. In addition
to this, data of enrolment was calculated by the C.C.S University Enrolment –List, compiled
from the Examination Cell of C.C.S University Meerut. Secondary data regarding to the number
of teachers have been collected through the University website (www.ccsuniversity.ac.in).
Primary data of Annual result which indicated the performance of university students have been
taken from the Computer Cell of C.C.S University Meerut.
2.2. Methodology
The following regression model has been used to analyze the impact of university input on
student performance:
Y= β0 + β1 X1 + β2 X2 + e
Where:
Y= PRIVATE FINAL CONSUMPTION EXPENDITURE (RS. CRORE)
Xi=
βi = Parameter to be estimated (i=0,1,2)
e= random error term
This study estimates the following multiple regression function with the following input and the
output variables.

3. Data Analysis
Figure 1 shows a wide gap between total income and total expenditure in year 1010-11. It
depicts the access of total income over total expenditure in year 2008-09, 2009-10, 2010-11 and
2011-12. The access of university income shows good financial health of C.C.S University. It
depicts that University has adequate finance to use. Total income and expenditure both has
increasing over the years. University income has grown with 11.63% CAGR but University
expenditure grows more rapidly than income with 13.52% CAGR.
Figure 1- Total income and Total Expenditure of C.C.SUniversity

80,00,00,000
Amount(Rs)
60,00,00,000
40,00,00,000
20,00,00,000
0
2008-09 2009-10 2010-11 2011-12 2012-13
Expenditure 34,32,14,982 41,13,59,139 39,37,22,669 54,64,12,100 57,13,96,000
Income 35,95,06,516. 48,97,73,085. 59,32,17,819. 60,76,59,000. 55,94,99,000.
Source: Calculated based on Annual account statistics, compiled from Account Department of C.C.S
University, Meerut
The annual account report reveals the wide variation in total expenditure of University.
University expenditure has increased over the years as indicated by the Figure-1 it was
increased from Rs. 343214981.9 in 2008-09 to Rs. 571396000 in 2012-13. Enrolment data of
PG, M.Phil and other diploma courses of university students have been collected through the
enrolment-list of C.C.S University which reveals the variation in total enrolment of University
campus. Given the number of enrolment has increased from 941 in 2008-09 to 1115 in 2010-11.
Per pupil expenditure has grown from Rs. 364734.31 in 2008-09 to Rs. 653771.17 in 2012-
13.Figure 2 illustrates the trends in University spending per- student over the period of time
from time from 2008-09 to 2012-13. As can be seen by the blue line, university expenditure per
student has been almost same for first three years but for last two years PPE grew rapidly. It
grew very fast for the year 2011-12 or 2012-13 due to decline in enrolment level.

Figure 2-Per pupil expenditure

800000
600000
(Rs)
400000
200000
0
2008-09 2009-10 2010-11 2011-12 2012-13
Per pupil expenditure 364734.31 345970.68 353114.5 621629.24 653771.17
Sources: Primary data collected from Computer Cell and Examination Department of C.C.S
University Campus
It is easy for a teacher to teach, evaluate and feedback if students are lesser in number in a
classroom. It is considered that lower Pupil-Teacher Ratio (PTR) gives better results than those
of higher PTR. Figure 3 and Figure 4 provides the information on pupil teacher Ratio (PTR) of
University over five years from 2008-09 to 2012-13. Pupil-teacher ratio has been computed by
divide the number of students by number of teacher per head at a specific level of education.
Number of students and number of teachers have been compiled by primary source of data.
Variation in pupil teacher ratio is presented through the Figure 3 and 4. It is clear from the
figures that pupil teacher ratio is higher at PG level than M.Phil for both Arts and Science
students. Figure 3 shows that PTR is 5.0 in 2008-09, than decline to 4.9 in 2009-10. PTR of PG
Arts students has grown since 2009-10 by about 5.9, than decline to 5.4 and 4.6 in 2011-12 and
2012-13 respectively. PTR for PG science student has continuously grown since 2008-09(3.9)
and reach to 4.9 in 2011-12, than decline to 4.2 in 2012-13. From Figure 4 it is clear that PTR is
always higher for M.Phil Arts students than M.Phil science students. But the variation in both is
almost the same direction in 2008-09 PTR is 3.5 and 2.5 for M.Phil arts and science students
respectively. PTR for Science students has decline to 2.3 in 2009-10, than increase to 2.7 in
2010-11. Since 2011-12 PTR has grown for both M.Phil arts and science students.

Figure 3 - PTR (PG) Figure 4 - PTR (M.Phil)

Pupil Teacher Ratio (PG) Arts Pupil Teacher Ratio (M.Phil) Arts
Pupil Teacher Ratio (PG) Science Pupil Teacher Ratio (M.Phil) Science
5.9 4.6
5.4 3.9 3.9
5 4.9 4.9 3.5 3.6 3.6
4.5 4.6
3.9 4.1 4.2
2.5 2.7
2.3 2.3
2008-09 2009-10 2010-11 2011-12 2012-13 2008-09 2009-10 2010-11 2011-12 2012-13
Source: Calculate based on primary and secondary data compiled from Computer Cell and Website
www.ccsuniversity.ac.in
The cohort – Graduation rate (GR) is the usual measure of the degree completion in the
literature. From the figure 5 that about 5.2 GR for PG arts students was 65.71% in 2008-09
since than it was decline to 44.11% in 2009-10. Than we show an increase in GR, it was
increased to 60.49% in 2010-11 than decline to 36.84% in 2011-12. In 2012-13 GR was 53.12
% for PG arts students. For PG science Students GR was 64.47% in 2008-09, it was decline to
49.38%, 47.19% and 37.75% for year 2009-10, 2010-11 and 2011-12 respectively. In 2012-13
GR for PG arts students reach to 68.60%.
Figure 5-Graduation Rate (PG)

80
70
60
GR (%)
50
40
30
20
10
0
2008-09 2009-10 2010-11 2011-12 2012-13
GR(%) Science 64.47 49.38 47.19 37.75 68.6
GR(%) Arts 65.71 44.11 60.49 36.84 53.12
Source: Calculated based on selected educational statistics, compiled from Computer Cell of C.C.S University Campus

Figure 6 Shows that about 85.71 % for M.Phil arts courses and 84.00% for M.Phl science
courses are completed their degree in 2008 -09. Than we calculate about 5% growth in GR for
M.Phil arets students and 2% growth in M.Phil science students. Than we show continuously
decline in graduation rate for M.Phil art students, it reach to 74.51% in 2012-13. GR for M.phil
science students has also decline since 2008-09. But it is increased to 89.36% in 2012-13.
Figure 6 -Graduation Rate (M.Phil)

100
80
GR (%)
60
40
20
0
2008-09 2009-10 2010-11 2011-12 2012-13
Arts GR(%) 85.71 90.2 76.36 76 74.51
Science GR(%) 84 86.36 70.91 75.56 89.36
Source: Calculated based on selected educational statistics, compiled from Computer Cell of C.C.S
University Campus
4. Result and Findings

Table 1, Table 2, Table 3 and Table 4 present the magnitude of the differential impact of Per
Pupil Expenditure and Student Teacher Ratio on student achievement as measured by the
multiple regression analysis coefficients. From the Table 1 t-value is insignificant for both
science and arts students at PG level. It shows that PPE and PTR has not significant role in
producing student achievement in terms of average annual marks as a dependent variable.As
shown in Table 2 the dependent variable is Graduation Rate at PG level of University education.
The coefficient of explanatory variable RATIO and EXPEND shows that there is negative
relationship between the variable. From the negative sign of coefficient RATIO and EXPEND,
it is derived that funds and resource inputs are not being used at the optimal level as Hanushek
(1996a) pointed out that resource inputs were used effectively when coefficient were positive
and significant.

Table 1: The Differential Impact of PPE and PTR on Average Annual Marks (PG)
Explanatory Coefficient Std.Error t-statistic P-value
Variable Science Arts Science Arts Science Arts Science Arts
Constant 106.32 84.94 23.32 19.9 4.55 4.26 0.04 0.05
RATIO -16.4 -4.75 6.17 3.45 -2.65 -1.37 0.11 0.3
EXPEND 3.39 -2.43 1.6 1.04 2.05 -2.35 0.17 0.14
Note: Dependent variable is average annual marks, level of significance is 0.05

Table 2: The Differential Impact of PPE and PTR on Graduation Rate (PG)
Constant 168 86.04 80.06 93.78 2.1 0.91 0.16 0.45
RATIO -21.04 -3.01 13.9 16.29 -1.51 -0.18 0.26 0.87
EXPEND -1.5 -3.95 4.17 4.8 -0.36 -0.8 0.75 0.5
Note: Dependent variable is Graduation Rate, level of significance is 0.05

Table 3 displays the result for testing the effect of student teacher ratio and per-pupil
expenditure on average annual marks of M.Phil students. From the value of coefficient and t-
value we found positive but insignificant result for both arts and science students. Furthermore
the impact of PPE and STR both are insignificant and negative for M.Phil arts students. There is
insignificant but positive effect of STR on Graduation Rate of M.Phil arts students. However,
the impact of PPE on student achievement is some positive but insignificant.
Table 3: The Differential Impact of PPE and PTR on Average Annual Marks (M.Phil)
Constant 49.1230 55.84 12.3362 7.36 3.9820 7.57 0.0576 0.01
RATIO 2.7123 1.1 5.0709 2.25 0.5348 0.49 0.6462 0.668
EXPEND 2.48 -2.5 2.24 6.53 0.1107 -0.38 0.9219 0.737
Note: Dependent variable is average annual marks, level of significance is 0.05

Table 4: The Differential Impact of PPE and PTR on Graduation Rate (M.Phil)
Constant 69.9372 110.67 21.3432 28.9116 3.2767 3.8279 0.0818 0.0619
RATIO 4.2516 -5.0303 8.7732 8.8441 0.4846 -0.5687 0.6758 0.0619
EXPEND -7.5 -2.3 3.88 2.56 -0.0192 -0.9015 0.9868 0.4624
Note: Dependent variable is Graduation Rate, level of significance is 0.05

Overall, the study finds mixed effects. As tables show negative effect of PPE and PTR on
student achievement. It means that university funds have no effect on student performance.
5. Conclusions and Policy Implications

Graduation Rates and Average annual marks are the most frequently applied measures of
university performance and continue to draw the attention of both academic and policy makers.
This paper has sought in the first place to analyze financial health of C.C.S University and
secondly to determine whether per pupil expenditure(PPE) and pupil teacher ratio (PTR)
influence university performance in terms of graduation rate (GR) and average annual marks of
students. The results of multiple regression models show that an increased in pupil teacher ratio
(PTR) tends to decrease in students performance at PG level of education. The relationship and
differential impact of student teacher ratio (STR) is statistically insignificant and negative on
academic attainment of both arts and science students at PG level. Furthermore, the impact of
student teacher ratio (STR) is insignificant but positive for the academic attainment of M.Phil
students. However the impact of STR is insignificant and negative on the average annual marks
of M.Phil arts students. It is derived from the regression result that per pupil expenditure (PPE)
has positive but insignificant role in producing the academic attainment in terms of average
annual marks of science students at PG or M.Phil level. But the impact is in negative direction
for arts students. The study found that an increase in per pupil expenditure tends to decrease the
percentage of graduation rate for both PG and M.Phil courses. It is clear that C.C.S University
has adequate finance to use. Income and Expenditure both has been increasing. But it should be
ensured that funds or resource inputs are being used at their optimal level. It is the policy
implication of the study that PPE and other inputs may have positive and significant effect if
PPE and other inputs are properly allocated or equalized and effectively utilized at the optimal
level of their usages. Then academic achievement in higher education may be improved to a
large extent.

References
Aristovnik, A., & Obadic A. (2011); ‘The funding and efficiency of higher education in Croatia
and Slovenia: A non-parametric comparison with EU and OECD countries’, William Davidson
Institute Working Paper No-1007
Chandrasiri, S (2003); ‘Financing of University Education in Sri Lanka’ Higher Education, Vol.
45, No. 1, pp.91-108
Estevez, J.G., & Brown, N.D. (2012); ‘Student Graduation: To what extent doe university
expenditure matter?’
Johnes, J.(2012); ‘Measuring efficiency and input substitutability: Evidence from English
Higher Education Sector over a Period of Expansion’, department of Economics, Lancaster
University
Lindsay, A.W. (1982); ‘Institutional Performance in Higher Education: The Efficiency
Dimension’ review of Educational Research, Vol.52, No.2, pp. 175-199
Ryan,J.F. (2004); ‘The Relationship Between Institutional Expenditures and Degree Attainment
at Baccalaureate Colleges’, Research in Higher Education, Vol.45, No.2.
University Grants Commission (UGC), Annual Report
Website of C.C.S University Meerut www.ccsuniversity.ac.in


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International Journal of Research in Economics and Social Sciences(IJRESS)

Available online at: http://euroasiapub.org

Effect of University Expenditure on Selected Performance Indicators

International Journal of Research in Economics and Social Science (IJRESS) 162

International Journal of Research in Economics and Social Science (IJRESS) 163

2. Data collection and Methodology

International Journal of Research in Economics and Social Science (IJRESS) 164

Figure 1- Total income and Total Expenditure of C.C.SUniversity

International Journal of Research in Economics and Social Science (IJRESS) 165

Figure 2-Per pupil expenditure

International Journal of Research in Economics and Social Science (IJRESS) 166

Figure 3 - PTR (PG) Figure 4 - PTR (M.Phil)

Figure 5-Graduation Rate (PG)

International Journal of Research in Economics and Social Science (IJRESS) 167

Figure 6 -Graduation Rate (M.Phil)

4. Result and Findings

International Journal of Research in Economics and Social Science (IJRESS) 168

Variable Science Arts Science Arts Science Arts Science Arts

Constant 106.32 84.94 23.32 19.9 4.55 4.26 0.04 0.05

RATIO -16.4 -4.75 6.17 3.45 -2.65 -1.37 0.11 0.3

EXPEND 3.39 -2.43 1.6 1.04 2.05 -2.35 0.17 0.14

Note: Dependent variable is average annual marks, level of significance is 0.05

Variable Science Arts Science Arts Science Arts Science Arts

Constant 168 86.04 80.06 93.78 2.1 0.91 0.16 0.45

RATIO -21.04 -3.01 13.9 16.29 -1.51 -0.18 0.26 0.87

EXPEND -1.5 -3.95 4.17 4.8 -0.36 -0.8 0.75 0.5

Note: Dependent variable is Graduation Rate, level of significance is 0.05

Variable Science Arts Science Arts Science Arts Science Arts

Constant 49.1230 55.84 12.3362 7.36 3.9820 7.57 0.0576 0.01

RATIO 2.7123 1.1 5.0709 2.25 0.5348 0.49 0.6462 0.668

EXPEND 2.48 -2.5 2.24 6.53 0.1107 -0.38 0.9219 0.737

Note: Dependent variable is average annual marks, level of significance is 0.05

International Journal of Research in Economics and Social Science (IJRESS) 169

Variable Science Arts Science Arts Science Arts Science Arts

Constant 69.9372 110.67 21.3432 28.9116 3.2767 3.8279 0.0818 0.0619

RATIO 4.2516 -5.0303 8.7732 8.8441 0.4846 -0.5687 0.6758 0.0619

EXPEND -7.5 -2.3 3.88 2.56 -0.0192 -0.9015 0.9868 0.4624

Note: Dependent variable is Graduation Rate, level of significance is 0.05

5. Conclusions and Policy Implications

International Journal of Research in Economics and Social Science (IJRESS) 170

International Journal of Research in Economics and Social Science (IJRESS) 171

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