[ This is Essay # 24 in our Spotlight Series. Click here for the archives.]
On Indian Education
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These are some commonly agreed upon facts related to education. First, it is an investment and the benefits arise much after the costs have been paid. It therefore requires foresight and will, and also disposable resources. Second, it is a process which takes time. The time taken can be somewhat shortened if sufficient resources are available but it cannot be arbitrarily speeded up. Third, the level of education determines the future capacity to produce and be productive. Fourth, an appropriate education provides more benefits than it costs. Fifth, in our contemporary world of dynamism and rapid change, education is indispensable.
Those facts and many others like them hold both at the individual level and the collective level. An economy cannot prosper without an educated population in just the same way that an uneducated person cannot. One good predictor of the success of an economy – which generally means that it is able to meet the requirements of its population in terms of producing goods and services – is the level of education. By that measure, India’s historical and contemporary poor economic performance is understandable given that its educational system is extremely poor.
Why India has a flawed education system can be explained at least in part by recognizing that it was an instrument created by and for the benefit of its colonial rulers. By restricting education to only a select minority, they were able to control the economy more effectively. The colonial objective was to exploit the economy for extractive purposes and it was never development oriented, as is natural for a colonial government. But even after political independence, the objective of the government did not change. The institutions and processes established by the British served the narrow interests of the post-colonial rulers just fine and so the education system continued to be controlled by the state. It remains so today and unsurprisingly the system is dysfunctional at its core.
Universal primary education is guaranteed by the constitution of India but the system fails to deliver. The literacy rate is around 60 percent. India has the largest number of illiterates, around 400 million, in the world. That is, India has more illiterates than the combined population of the US and Mexico. Secondary school enrollment is around 25 percent and higher education only 8 percent of the relevant population. Furthermore, tertiary education is poor as only about one of four college graduates is employable.
Very few receive any vocational education. China has 500,000 vocational schools which train 60 million a year; India has only 12,000 vocational schools and graduates only 3 million students.
Hundreds of thousands of Indian students study abroad at an annual estimated cost of around US$ 1 billion. There are very few foreign students in India. India has around 27,000 foreign students. Compare that to tiny Singapore (population 5 million) which has 100,000 and Australia (population 22 million) which has 400,000 foreign students.
The public expenditure by the center and state governments is of the order of Rs 100,000 crores which is around 3.5 percent of GDP. What explains the dismal failure of the education system? One possible explanation is the license permit quota control raj.
Briefly, the government bureaucracy has a monopolistic hold on the Indian educational system. Monopolies maximize profits by restricting quantities so that the prices people are forced to pay are much higher than the costs. The established rules and regulations do not allow the supply of educational services (through schools and colleges) to expand to meet the demand. The excess profits are siphoned off by the politically connected. The presence of these excess profits acts as a powerful deterrent against the liberalization of the education system.
Aside from the profit motive, there is another very powerful reason why the supply is kept limited. Where there are shortages, political fortunes can be made by rationing out the limited supply to groups in exchange for their patronage. This is what reservations based on caste and religious lines achieve.
The general solution to much of India’s educational problem is to liberalize the sector so that the market is free to adjust its supply to meet the demand. The government must be fully out of the education business; its role must be restricted to regulating the sector. As in all other markets, the educational market will also have its share of market failures. Correcting for these market failures will be the job of the regulator. The regulator must be independent of the government.
The foreseeable market failures can be dealt with simply and cheaply. First consider primary education. Very poor people cannot afford to pay market prices for primary education. They need financial support. This can be delivered via vouchers that allow them to choose among various supplier of primary education. Once universal primary education has been ensured, the same method can be used for secondary education. And as for tertiary education, it should be entirely merit based. That is, if everyone has had an equal opportunity to be educated to the secondary level, they can compete for entry into tertiary education.
Tertiary education should be priced at full cost. Those who are eligible for tertiary education but are credit constrained, the role of the government would be to create the credit market for such students to be able to borrow what is required. This not only helps those who need the help but also does not subsidize those who can afford to pay. In the current system, the rich benefit more. They are able to afford a good education up to the secondary level and then are able to compete for the limited seats in tertiary education and often are the only ones who enjoy the subsidies in tertiary education.
When a way of doing something for decades does not work, it is reasonable to consider alternatives. The market and for profit entities have been barred from participating in the education sector. This needs to change. We do know that markets deliver a wide range of goods and services quite efficiently. There is no reason to believe that education as a service cannot be as effectively and efficiently delivered by the market. And where there are obvious market failures, the solutions are well known and can be implemented without difficulty. It is time for a different way of approaching the problem.
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The government must be fully out of the education business; its role must be restricted to regulating the sector.
and
The regulator must be independent of the government.
Sorry. I didn’t get how you reconcile these apparently contradictory statements.
Also, could you explain how the voucher system you propose for the poor in primary (and secondary) education would work?
Space bar:
The apparent contradiction you point can be resolved if you distinguish between “the business” and “the sector.”
An analogy may emphasize that distinction. Automobile companies are businesses in the automobile sector. The government has a role in regulating the sector; the government should not be in the automobile business.
Regulators are a necessary institution. To avoid conflict of interest, the regulator has to be independent of the government. Governance includes empowering regulators and not messing with their charter.
I am afraid that the subject of regulatory independence is broader than what can be reasonably addressed in the comment to a brief post.
The same goes for explaining how a voucher system would work. But let me see if I can in a few sentences convey the essence. Most likely you, just like me, did have the means (through our parents) to pay to go to a school of our choice. The poor lack that choice. If we give them financial support, they too can exercise the choice we had. That removes what is called “the credit constraint” and helps those who need it the most.
Interestingly, I wrote an article on public Education in the same series a couple of months back. To summarize what I wrote,
a. Education is neither a commodity, nor an investment. It is a human right, and the state must secure the right of its citizens. That comes from definition.
b. The reason for poor standard in Indian education has nothing to do with monopoly practices and market economics. The reason behind it is poor investment by the government. In our federal setup, despite the central government allocating most resources and taxes to itself, the role of education was delegated to the state governments. Devoid of cash, the education setup deteriorated in most states.
c. What mattered most was the dedication and focus of respective state governments. The progressive nature of Kerala and Mizoram governments ensured that these two states achieved the level of education for its population that is comparable to the best in the world.
d. There is a huge class differential in the access to education in India at present. That means that both quality and quantity of education decreases exponentially as we move down the class ladder. The voucher system will only accentuate the problem by creating different schools for different social strata. Even now there is a legislation that makes private schools in Delhi to admit a certain percentage of students from economically poor sections in return for concessional land rates. Hardly any school is following the rule.
e. Give me one example in the world, where the country has improved the education without huge public spending in both running and maintaining the school system. We need the same. The share of education must go up to 10% of the GDP.
I agree with Anoop. Treating Education like a business is a simplistic solution especially in a country as diverse and complex as India.
While vouchers have been implemented successfully in Singapore and other countries, they are no where as complex as India. This very system can be misused to deny poor people education. Paper schools will be able to purchase these vouchers for half their price, denying people education while making a profit at the same time.
If profit is indeed the motive of every business, does this proposition not make sense?
Anoop is also right about huge public investment in every country that has done well educationally. For instance, Japan started its educational reform in the 1850s and these investments paid off during the early part of the 20th century when Japan started industrializing.
If we look at education from a business perspective, why would I want to invest in some parts of Assam for instance where profits are zero and threats of militancy loom?
If the government absolves itself of the responsibility of delivering education, how will it protect the rights of people? Education could have been a fundamental right for Indians if Gandhiji had had his way. At any rate, it is at least a Directive principle.
That said, perhaps the private sector has a part to play in higher and vocational education – organizations such as NIIT and ICFAI and even the Indian School of Business are definitely contributing to enrichment of our talent pool.
At the same time, we cannot forget that businesses have exploited the educational system by running universities out of basements in some Indian state.
From a Gurcharan Das column at the Times of India asking why Indian students are not creative.
“The answer, of course, is our education system, which stifles all creativity through rote learning. It was modelled on the British system, but the British have moved on and reformed theirs, partly under American inspiration. But our kids are still stuck in a world of cramming and coaching classes. The disease lies in the lack of autonomy. The ministry of HRD and its children, University Grants Commission (UGC) and All India Council for Technical Education (AICTE) have a stranglehold. A college cannot decide what courses to teach, what fees to charge and what salaries to pay its professors. How could creativity emerge from this servitude? Creating new universities, as the PM proposes, is not the answer unless you give them autonomy.
“Forget creativity, Indian companies are frightened by the shortage of basic skills which is currently driving up salaries unhealthily. Of the 400,000 new engineers that graduate each year, roughly 100,000 have the skills to enter the job market. It is tragic that over 400,000 students strive for 6,000 IITs and IIMs seats annually. The answer, of course, is to increase the supply of good colleges. As it is, we lose 160,000 students to foreign universities and parents pay $3 billion in fees and costs. Indian ‘edupreneurs’ and foreign universities have repeatedly tried to start high quality campuses but the HRD ministry’s ‘licence raj’ drives them away. AICTE even wants to close down the prestigious private Indian School of Business which offers a better education than even an IIM. The draft foreign universities bill doesn’t provide autonomy either and ensures that no decent foreign university will enter India. “
Here’s another one from Gurcharan Das from 2005. The article is at http://timesofindia.indiatimes.com/articleshow/1146322.cms
It is with anguish that I sit down to write this column. Two years ago, I met a distinguished friend in Delhi, who is the president of a prestigious American university that has produced several Nobel laureates. He loves India and he told me with some pride that India is increasingly perceived as a future knowledge capital of the world. He thought he would contribute to this future by setting up a branch campus here so that Indians could acquire his university’s degree at a fourth of the cost in America. I was delighted. Here’s a chance for a world-class education for our young, I thought.
Two years later I heard this tale of woe. His university’s application to the Association of Indian Universities (AIU) for an equivalence certificate went unanswered despite three reminders. Their meeting with the All India Council of Technical Education (AICTE) resulted in the demand for a huge bribe. Their efforts with the University Grants Commission (UGC) and the Ministry entangled them in miles of red tape. After knocking about like this for a year they concluded that their only hope was to go to Chattisgarh, which allowed private universities. Just as they were about to acquire 25 acres of land and make the Rs 2 crore mandatory deposit came the infamous Supreme Court ban on Chattisgarh universities.
. . .
Along with his letter, my friend has attached draconian new AICTE guidelines for private universities, which he says “will decide our fees, student intake, and even the size of our buildings, and prosecute us like criminals for non-compliance. Even if we get their approval, it’s only for a year, and meanwhile the courts could overturn things as they have done in Manipal’s case.” Sadly, he concludes that India is a hopeless cause and he has decided to set up a campus in China. After reading his letter I felt like weeping.
Who could be against enlightened regulation of private higher education? We all wish for a body that ensures standards. But if this is how we regulate-with corruption and red tape-isn’t it better to give universities autonomy and leave it to parents and students? A private education costs less than a car, and we don’t protect car customers via AICTE or UGC. Rather than fall into the trap of case-by-case approvals, good regulators everywhere provide lots of information-such as our magazines, who now rate colleges by polling students and faculty. These ratings are not precise but they help students make an informed choice. A free society must offer autonomy to its universities — only then will minds be able to fly.
Saurabh:
Your analysis is at the other extreme of mine. For a while now I have been writing about education in India on my blog. There are around 100 posts. I don’t expect you to read them all. But perhaps you could read a brief series of 10 posts I did, the first of which is at http://www.deeshaa.org/2007/04/30/the-indian-education-system-part-1/
The others in the series can be sequentially accessed.
Sincerely,
Atanu
Good points, Anoop. I tend to agree with you.
atanu,
‘First consider primary education. Very poor people cannot afford to pay market prices for primary education. They need financial support. This can be delivered via vouchers that allow them to choose among various supplier of primary education.’
which means different schools for different classes. and also communities, castes, sects.
‘Once universal primary education has been ensured, the same method can be used for secondary education.’
variation in quality at the primary school level will again ensure that many of the ‘poor’ students would again drop out. so, universal primary education would remain an as impossible a goal as it is now.
‘And as for tertiary education, it should be entirely merit based. That is, if *everyone has had an equal opportunity* to be educated to the secondary level, they can compete for entry into tertiary education.’
in the scenario you describe, can we really say that ‘everyone has had an *equal opportunity* to be educated to the secondary level’?
Kuffir: “which means different schools for different classes. and also communities, castes, sects.”
How do you figure that? Would you please elaborate how financially assisting someone who is unable to pay for primary education bring that about?
atanu,
i was helped in figuring that out by pro-school-choice advocates here in india and elsewhere. let me quote a few lines from the website of an american pro-school-choice advocacy group from wisconsin, u.s.a., ( http://www.schoolchoiceinfo.org/facts/index.cfm ):
“Choice is everywhere in American education. It is manifest in the residential choices made by families [and] in the housing prices found in neighborhoods [and] when families, sometimes at great financial sacrifice, decide to send their children to private schools…. [I]n all instances, these choices…are strongly shaped by the wealth, ethnicity, and social status of parents and their neighborhoods.”
school choice is being justified on the grounds that choices (along the lines of wealth, ethnicity, social status and location) are made even in the absence of a school choice program- so why block a government sponsored program that only acknowledges existing economic, social and ethnic differences? i wouldn’t even like to think about how many income-wise, religious, sectarian, casteist, regional, linguistic choices a school choice program in india would allow people to make.
parth shah of ccs ( http://www.ccsindia.org/parth_FENew1.asp ) says:
‘The government should give the freedom to all professional institutions—public and private—to set their own fee structures. By requiring public institutions to charge very low fees, the government actually subsidises professional education for the middle and upper classes. A better system would be where all institutions set fees that make them self-financing and then give merit and need-based scholarships to those who cannot afford to pay those fees.’
he’s talking about professional institutions but i don’t think his prescription for schools would be any different. let the schools set their own fees: let each income segment of the market find its own right price band. and also let each sectarian, caste, religious, regional, linguistic niche of the market also finds its own choice. that’s how it seems to work in the u.s., too where most voucher students attend religious schools.
like i said, i can’t even start to think about the choices that will be offered to the indian consumers in this government-sponsored market.
As an educationist from South India settled in North,I have experience of working in Government, Army, Private organizations, in public schools, Professional Colleges , CBSE, State Boards ,Ugc and UPTU etc in Teaching and Administration in South and North.
I personally feel that down South I had been drilled by my Teachers to be honest in my work. I was blessed to have very good teachers , sincere in teaching lessons and manners and I really feel honoured to be an educationist to follow their footpaths.
Education there is not so costly as I find in North. I find that there are loopholes in getting degrees in the Universities of North where some undeserving people getting more marks through unfair means. Such people enter into teaching and install in the minds of their students same method to polute the Education system.
Even if the Government brings out good policies, and spend a lot of money on Education, and if the corruption is not curbed out in the Educational field, there won’t be any improvement. I really feel very much for the students from poor families spending a lot of money on education gaining nothing from their Institutions. If they pay exuberant amount they get their degrees through the management of the colleges who have special links in getting good result for their colleges. These children run from pillar to post to get jobs in vain and land up in little jobs like drivers in Tempo-Autos.Those who could pay more can become teachers in colleges.Just imagine the plight of the students under them.
The mushroom growth of Techinical Colleges who earn a lot of money during admissions promise students to make them Technocrats by assuring them placement services( a type of match-fixing)
In fact such students are unfit to become technicians also.
I opine that unless and until the corruption in the Educational field is rooted out ,our Nation cannot improve.Many Indian students who are from well-to do families rush to other countries for education and jobs, thereby facing racial discrimination which is fatal to them.
Let us promise our Indian children a good and secured life in future in India.
Let us save our motherland and our children. Jai Hind and Jai Bharat. Shiva Durga
Thank you for publishing my writing,