This paper attempts to analyse the trends and growth of public expenditure on education to ensure high quality education and vibrant knowledge society in the country. It is found in the study that the public expenditure on education is increasing at increasing rate continuously. There are many states that are spending more on education of its GSDP than national GDP of central government. Among the major Indian states Manipur is spending highest on education and Gujarat spending the lowest. It is also found that the central government still spending less than 4 percent of GDP. The trends of growth rate of public expenditure on education positively increasing. Education being in the concurrent lists state government expenditure on education is more than that of the central government. The trends of proportionate share of state governments spending on education is decreasing, on the other hand central government share is increasing. Total plan and non-plan expenditure is increasing but non-plan i.e., maintenance expenditure is increasing more than that of the plan expenditure. In spite of increasing trends of government expenditure on education, the need of the hour is to increase more expenditure. Therefore, private sector investment in education should be encouraged particularly in higher education and government investment must be increased for primary and secondary level of education.

Keywords: Public Expenditure, Quality Education, Knowledge Society, Private Sector Investment.