The Indian Economy Blog

December 20, 2005

Highway to Educating India

Filed under: Business,Education — Naveen @ 1:30 am

Here is a colourful thought experiment. Colour blue every buck that leaves from the government’s pockets for the purposes of education. Yes, every single note, from the education departments; the social welfare departments; the public works departments and a plethora of others involved in education. After you track the flow of money, categorise where they end up. Amounts spent on teachers; schooling materials; mid-day meals and others.

Some of the results may be surprising. Read here.

However, this is not news. Mismanagement of government funding and low achievements of government schools are old hat.

Why spend so much money on a system that is not working well? Obviously because there does not seem to be a plausible system that can replace this entire education structure. Is that the case?

Let us turn to the purported success of the government in building the highway. There is a world of difference between the Indian government embarking single-handedly on building 15,000 miles of highway and educating 192 million children. There are issues of building and then of maintaining in either of them. And even if you are efficient in physical engineering, it doesn’t mean the same as being efficient in social engineering. However, the cinch is this. The government has employed private sector partnership in building the highway but still desists from it in educating its students. Can one learn from some of the successful principles employed in this highway building task? There were incentives for early completion and penalties for late execution. Apparently the interest shown by the private sector in the highway project was due to the three major factors of ensured revenue repayment, fair bidding and speedy execution.

What they did was to set up an environment of accountability and incentives and executed it well. Would it be possible to replicate a similar environment in education?

You could have one or more of the four kinds of accountability in education.

1. Bureaucratic accountability (the sarkar will take care through rules and regulations)
2. Professional accountability (teachers and principals are educated and they will take care)
3. Performance-based accountability (the sarkar will take care through measurements of performance in tests)
4. Market accountability (if you don’t take care, I will take to somebody who cares)

These are the factors that determine the quality of your money, the bang for your buck. It is not a surprise when you read James Tooley’s report where he finds that there is a sector of “private budget schools” that is catering to the poor, and students in these “private schools achieved at or above the levels achieved by their counterparts in government schools in both English and mathematics.” And this inspite of free access to government schools!

The education system for long has been under the strangle-hold of the first two factors which obviously haven’t worked in our country. This has hence led to a decline in quality and access. Isn’t it time to move on to the next ladders of accountability? This would involve thinking of the schooling sector as a market and not as a government sector. Which are the regulations that impinge from an explosion in the supply-side of schooling? Here is a hint, think licence!

Note: Think of it this way! The government will allow a businessman to fly you in the air and make a profit of it notwithstanding the danger involved but will not allow the same businessman to teach you at a profit.


  1. Very few people are aware of the work done by organizations such as [url=]Ekal Vidyalaya[/url], which are working hard day and night to eradicate illiteracy from India, without any fanfare or fame.

    Within last 10-15 years they have set up nearly 15,000 schools and they are educating 500,000 children. Yes, it is half a million children! They plan to expand and have 100,000 schools.

    Check out two videos of Ekal Vidyalaya work. I will upload more soon. Remember, to make a line smaller, we have an option to draw a bigger line too :)

    Video 1:
    Video 2:

    There are tons of more videos. I will upload them soon too.

    Cheers :)

    Comment by S Jain — December 20, 2005 @ 9:58 am

  2. “The government will allow ….. but will not allow the same businessman to teach you at a profit.”

    Agree with most of the things you say… but what a dumb example! You couldn’t find a better one?

    Comment by Kachru — December 21, 2005 @ 12:07 am

  3. Mr Guha,
    I think one must be very cautious when considering the private sector entering the field of education. Policy makers and educationalists in the US are already lamenting the privatisation of higher education in American private colleges and universities – a system that treats students as consumers who need to be catered to and given what they demand at a price, and not as young minds that need to moulded and taught what they need to know to be socially conscious citizens. I believe it’s important to find a way in which citizens of the country can have a stake in their children’s education, and are given the means to take responsibility for this, rather than the private sector. This is especially true for primary education.

    Comment by Manu Murthy — December 21, 2005 @ 7:38 am

  4. Manu says

    I believe it’s important to find a way in which citizens of the country can have a stake in their children’s education, and are given the means to take responsibility for this, rather than the private sector.

    Isn’t the private sector the means by which citizens get a stake in their children’s education? Or am I missing something in your logic…?

    Comment by Prashant Kothari — December 21, 2005 @ 5:36 pm

  5. I would second Prashant and add that with private sector, parents can have better stake/control over their children’s education. With private schools, parents can move their kids to schools that provide better quality education. In contrast with public schools run by unaccountable government bureaucrats/teachers, there is no way parents can have any stake in their kid’s education.

    Comment by sv — December 21, 2005 @ 7:20 pm

  6. Mr Manu Murthy writes:

    Policy makers and educationalists in the US are already lamenting the privatisation of higher education in American private colleges and universities – a system that treats students as consumers who need to be catered to and given what they demand at a price, and not as young minds that need to moulded and taught what they need to know to be socially conscious citizens.

    Do you have any reference for this alleged lament going on in the US? Or is this a “manufactured” lament? Historically, higher education in the US was always private — check the establishment dates of places like MIT, Harvard, Yale etc. State involvement in higher education through establishment of public universities was a later phenomenon; here too, only the individual states are involved; the federal government is not involved.

    As for the second point, what evidence do you have that US undergraduates are less “socially conscious” than their Indian counterparts? And if the US system is so bad, why is it that students all over the world still want to attend US universities. (A part of this may be a ploy to enter the US with a view to settling there; but the quality differential between US/non-US universities is too large to be ignored.)

    You are welcome to take a stand against private involvement in higher education. But please make cogent arguments; not ridiculous ones.

    Comment by moon — December 22, 2005 @ 1:17 am

  7. Thank you for pointing out the incoherence of my argument.
    My point was that, inviting private participation in the social sector might eventually do more harm than good, for the following reasons:

    1. The primary aim of a private corporation is to maximize profits, not to maximize social benefit. These two aims don’t always coincide, and in some cases, may actually conflict.

    2. A private corporation is accountable only to its shareholders, not to the general public. I believe that any organization that has large-scale involvement in a sector of social development like education must be thoroughly accountable to the people that the sector serves.

    3. I have worked in the corporate sector in the US long enough to understand that the concept of private sector efficiency is definitely not axiomatic. In certain situations, private firms can be as inefficient, corrupt and bureaucratically tangled as the worst government departments. Why do you think the US needs Sarbanes-Oxley?

    Let me also point out that while higher education in the US involves private participation, the running of both primary and high school education remains almost exclusively the domain of the local governments and school boards. Since the local residents are the primary stakeholders in the education process, they are allowed to actively participate in appointing school administrators and shaping curricula. Perhaps this is a better model for the Indian education system?

    Broadly speaking, I feel people in India today are bitterly disillusioned by government ineptitude. In trying to look for alternatives to perform the same duties as state run services, they assume that the privatization of any service that is state run (education, public transport, healthcare) will ultimately benefit the people. For reasons 1. and 2. stated above, I don’t believe this assumption is necessarily true in all cases.
    If the publicly elected government is not functioning as the public wants it to, the solution is to get the government to perform, not to abdicate responsibilty to the private sector.

    Comment by Manu Murthy — January 6, 2006 @ 8:48 am

  8. It might be useful to focus back on the purpose of Education – Why do we need to bother with educating a set of peoples ?

    A society experiments with a set of values in an attempt to rise up, say as indicated by Maslow’s Pyramid (although that is primarily focussed on the Individual). An individual needs to be able to critically analyse the pros and cons of his/her current environment, learn to accept/reject ideas and deal with differences of opinion. This ability is a support and not a substitute, in the fight to survive. A set of values provides basis for more subtle questions like: what are the best set of values based on which ideas may be accepted or rejected, or is tolerance of a difference of opinion necessarily a good thing ? I believe that the purpose of education is to aggrandize an individual’s critical faculties. Education makes a person sharply aware of his environment by enhancing his/her observation, cogitative modeling and inference skills. We believe that such individuals contribute statistically to growth.

    Keeping Education focussed on it’s basic purpose while driving the activity – privately or otherwise – may be referred to as it’s quality. A quality education enables a person to better fight for survival – it does not substitute the battle. That, I believe, is the reason where policies that help ‘substitute the battle’ (e.g. midday meals) are in error.

    The current focus is on quantity and not quality, and the disillusionment that is widespread may primarily be due to realisation of it’s inadequacy in providing the support to actually conduct the business of living. If the basic purpose of the activity is lost, it probably hardly matters if it is the private sector or the government sector that has committed the mistake. The individual who seeks education will not be as worried about which sector is providing the service, as long as the quality is available. Further the choice will be exercised, as indicated by the attempt to seek US education. Finally, if the purpose loses focus, then no measure will suffice towards success unless the focus is brought back. A major part of the rupee will end up in being spent on supporting essentially empty schools.

    The present generation of parents is a result of incorrectly guided policies and the fear is that the effects of empowering them with choice may not necessarily be wise over the short term. The inculcated short sightedness is likely to create a ‘demand based’ education – something that goes contrary to the basic spirit of education as developing self supporting abilities – one would end up always following the current demand, a moving target in itself. This creates too specialised individuals who are inadequately prepared in adapting to a change in current demands. In other words, a ‘demand based’ education is unlikely to create critical awareness abilities required in the long term. In the long term, the lessons of experience will anyway prevail. However, the issue is then to explore ways of reducing this period, and thus the corresponding social cost. It seems to me that we need to try out different policies, including ‘demand based’ education and learn for our ownselves. A State that supports policy implementation, but avoids policy conception might be more useful to document and spread the lessons. Afterall there is a certain wisdom in having parents stop parenting after a certin point in the development of their children.

    A small aside: As I see it, our Indian society is spread across the Maslow Pyramid. More people still exist at the bottom, and gradually reduce in number to the top. Education is one means by which we can strive to raise up those who are tied down in the Pyramid. I am using this idea to place the specific comments and examples in a perspective.

    Thanks for your patience.

    Comment by Abhi — February 2, 2006 @ 12:55 pm

  9. Manu Murthy, your argument lacks cohesion, logic, and rests on an assumption other than a solidly founded premise.

    Comment by Walter Vetrivel — November 13, 2007 @ 12:00 am

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