The Union cabinet has decided that instead of the Centre and states equally sharing the expenditure of SSA as announced earlier, the Centre will fund 65% of the flagship scheme. The north-eastern states-the Seven Sisters and Sikkim-will receive a whopping 90% of SSA funds from the Union government.

The Centre funds the SSA from a 3% education cess on personal income tax, corporate tax and service tax. The tax, which was 2% in 2006-07, yielded Rs11,000 crore, which funded the SSA and the midday meal programme in schools. The increase in cess levied this year is expected to yield an additional Rs5,000 crore and will fund a mixture of government initiatives, including secondary education and creating extra seats for members of other backward classes in higher education (pending a Supreme Court decision on reserving more seats for the backward classes).

A spokesman for the ministry for human resource development, which oversees education, says that apart from the cess, money required to fund all this will also come from other government funds.

This year, Bihar unveiled an ambitious programme for universal education that cost Rs3,339 crore.

After the revised formula, the Centre will put up Rs2,170 crore for Bihar. The rest, Rs1,168 crore, will have to come from the state.

Uttar Pradesh is another big spender on SSA with a plan to spend Rs3,442 crore on this. Of this, the Centre will now contribute Rs2,237 crore.