The Indian Economy Blog

July 22, 2007

Don’t Blame The Export Of Tuitions

This week’s Economist carries a letter from a certain Murali Reddy of Lake Hiawatha, New Jersey.

SIR – So, Krishnan Ganesh, one of the proud products of India’s higher-education system, is busy developing tools to help improve the quality of primary education in America by outsourcing teaching over the internet (Face value, June 23rd). Meanwhile, precious little is done to remedy the neglect of primary education in Mr Ganesh’s home country. The commitment of India’s elite towards primary education, especially in rural areas, is bordering on scandalous neglect; funding goes towards supporting tertiary education at the expense of millions of poor children. [The Economist/Unedited Version]

It is understandable that people like Mr Reddy should express simplistic opinions. However, it is rather surprising that the editors of The Economist considered it worthy of print.

Here’s something for Mr Reddys of the world. India exports software engineers, while large parts of its government have primitive (or non-existent) computer systems. India exports doctors and nurses, that, given the dismal state of its public healthcare system should be very troubling. India exports workers who build roads and highways in other countries, while its own roads are pathetic. India exports cars, yet so many of its people walk, take the bus or ride relatively risky two-wheelers. India exports pharmaceutical drugs, while so many of its citizens suffer due to their inability to access them. India exports food products, while so many of its citizens go hungry every day.

It turns out that ‘scandalous neglect’ extends to everything from software engineers to road workers, from cars to essential drugs. But why does India export doctors, nurses, teachers and road workers despite their obvious need back home? Well, because they fetch a better price abroad. The harsh reality of globalisation—and you would expect The Economist to know this—is that unless India offers comparative wages and living conditions, those who can export themselves will do so. [See Becker & Posner on the international market for talent]

In a free country, neither the government nor the civil society elite which Mr Reddy blames can correct their ‘scandalous neglect’ of public services by stopping people from leaving. So what are they to do? Well, increases their wages until the marginal emigrant decides to stay. That leads us to the next question—how will Indian society find the money for this? Among other things, by selling goods and services for the best price. Which means, well, exporting software, cars, drugs—and yes, tuitions. Globalisation offers India an opportunity to pay for the modernisation of its public services. [See an interesting article by Mukul Asher and Amarendu Nandy in the In-Depth section of the June issue of Pragati. They argue that communities with a lot of out-migration must use remittance incomes wisely.]

So providing tuition or healthcare to global markets per se can’t be held responsible for the scandalous neglect of primary education. But there is, however, a scandalous neglect of primary education on the part of the government. The wealthy and the middle class don’t care as they can afford private schooling. The political class buys the poor off with promises of quotas in higher education and in jobs. Atanu Dey frequently writes of ways how these might be addressed. But blaming outsourcing is not one of them.


  1. Actually, primary (rural) education is not neglected by govts.
    Billions of rupees are poured for primary education with excellent
    salaries and perks for the teachers (much above the market rates) ;
    but in vain. socialistic decades have destroyed the work ethcis and
    sincereirty of most govt staff (incl. these teachers) ; on any day
    approximately 30 % of govt teachers are absent across India. and many
    areas, only salaries are collected promptly. (esp in Bihar area, i heard).

    hence it is more a question of work ethics and implementation than about the total amount spent for education, etc.

    Comment by K.R.Athiyaman — July 23, 2007 @ 8:51 pm

  2. I guess Economist can not resist using another stick to beat India with. Because of their ‘India bashing’ propensity, I am careful to give as few clicks to Economist website as possible(which by the way is few clicks per year). Of course, I never subscribed to the print edition.

    I don’t know whether it is jealousy or something, I decided to pay little attention to their articles. Better to get good quality, up to date contents from Indian business publications.

    Comment by Sri — July 24, 2007 @ 12:28 am

  3. “But there is, however, a scandalous neglect of primary education on the part of the government. The wealthy and the middle class don’t care as they can afford private schooling.”

    Nitin, I think that’s exactly what Murali is saying in Economist. If the wealthy and middle class don’t care, no country works. I guess India, being a apparent democracy with little civic participation, is exhibit A to prove it.

    Comment by Chandra — July 24, 2007 @ 1:18 am

  4. Chandra,

    Sure. But what’s that got to do with outsourcing tuitions?

    Comment by Nitin — July 24, 2007 @ 6:21 am

  5. [...] Read the rest here [...]

    Pingback by The role of Indian Business « Cubically Challenged — July 24, 2007 @ 8:19 am

  6. Also, amidst all this talk of ‘Scanadalous Negelct’ shouldn’t we ask for some sort of analysis on what % of GOI and states money comes from the pocket of this ‘Neglecting class’.

    Something on these lines.

    Once we have this, we can have a debate on whether what the government is doing is good enough or effective enough and the next course of action..

    Other wise we will keep having this non sequitur debates whether the rich care for the poor. Why long as they pay their taxes…

    Comment by Rishav — July 24, 2007 @ 4:27 pm

  7. Nitin, while I won’t make the connection, Murali, apparently, is. He’s expressing his displeasure at entrepreneurs working to solve problem in a foreign school system while ignoring problems at home. I personally don’t want to tell what entrepreneurs can to do – if they find a market demand, go fill the demand even if the demand is on Mars. And there are plenty of entrepreneurs trying to solve market demand for schools at home, including the current illustrious president – in her own corrupt ways.

    Rishav, there is more to civil life than paying taxes. Participation in local institutions, such as schools, is just as important. It’s not about rich taking care of poor. It’s rich (but mainly the middle class) using local institutions, and in the process making them work, for themselves. Obviously, with various political and social forces acting everywhere, it’s easier said than done.

    Comment by Chandra — July 25, 2007 @ 12:06 am

  8. Chandra,

    As Atanu’s writings make clear, the problem is not a lack of entrepreneurs who want to provide education services, but rather a government that actively blocks them from doing so.

    Comment by Nitin — July 25, 2007 @ 6:56 am

  9. @ Chandra -
    Suppose, I am participating in running of a local school, wont i be accused of neglecting the rural poor, eating their produce from the supermarket while doing nothing for them…

    ultimately, the question is, who should decide, how fruitful and in what line of business i spend my time…

    One of the problems i see in these is linking each and every economic activity to a social issue…

    Comment by Rishav — July 25, 2007 @ 10:39 am

  10. Nitin, couldn’t agree more. One just has to look at the policy making contours of allowing foreign universities to form institutions locally.

    Rishav, I am not saying one should do something to please, the usually un-pleaseable, junta. But a society where middle class participate – not everyone in every activity, but in those activities that they have a stake in – is a better society. That, I think, is the secret of western societies success – not incorruptible politicians, not noble prizes, not multinationals, not well trained armies. And why India despite being a liberal democracy, for almost three generations, hasn’t done so well as a society (in solving it’s own problems). Again, its easier said then done.

    Comment by Chandra — July 25, 2007 @ 9:45 pm

  11. my two cents:
    1. Govt school techers get more salries than thier private counterpart and are usually more qualified ( They get through competitive exmas) except the costly public schools. So clearly issue is one of willingess.
    2. Now who can make these teachers work ? either parents or administraiton.
    Now these parents are able to extract better output from middle rung private schools but not from govt schools becuase these parents are poor. Some 40 yrs back govt schools were used by almost all sections of society .This insured parental pressure .Now rich and middle class people no longer use govt school ,even in villages so the problem.
    3. Administration – has one ever wondered why Kendriya vidyalaya which is also a govt institute works so well but not state govt schools . Becuase central govt officers use kendriya vidyalaya so they have a stake in its good condition but no state employee has stake in state govt schools. One option could be to handover these schools to local municipalites .Reuslts of pressure by locla people will reform these schools which is not possible when they are controlled form state capital.

    Comment by Anshul — July 25, 2007 @ 11:14 pm

  12. “And why India despite being a liberal democracy, for almost three generations, hasn’t done so well as a society (in solving it’s own problems). Again, its easier said then done.”

    we are off topic here ..anyway..

    Liberal – I don’t think so, Plus a lot of institutions were corroded in the 70s. consequently lower gains from democracy. Build institutional mechanisms..thats my answer… and coming back to the topic..the guy is participating in the civil society, by doing what he thinks will give him the best shot to contribute. Why should he go for the suboptimal solution (for him) work in some other sector in India..that way we are neither advocating free markets while not even going for a central plan..

    also..the concept of ‘participating in civic society’ needs to be fleshed out…I feel these kind of concepts tend to mislead..Its alright if you differentiate between Investment (eg building capacity) and or consumption..even there the theory is not very clear cos they form a cycle (sort of) why berate any kind of economic activity..

    Comment by Rishav — July 26, 2007 @ 1:47 am

  13. Anshul,

    the govt schools were under local bodies until 60s and functioned well. my school, Muncipal Higher Secondary School, Karur is 150 years old and had excellent standards until 60s. Due to over centralisation
    by bureacrats, the schools were brought under the Dist.Education officers and state govt. and lack of accountablity and local control,
    plus socialism (with job security) has eroded the standards. Hire and fire will only work to make these teachers teach sincerely..

    Comment by K.R.Athiyaman — July 29, 2007 @ 6:33 am

  14. Outsourcing is clearly not to blame. While more $$ needs to be spent, it is clear that “ROI” on the current $ being spent on education (student graduation rates etc) is lower than one would expect. Perhaps a part of this is related to the expectations post that you have on your blog. Teachers are expected to have a high rate of truancy (see Kaushik Basu’s paper on the subject at, school boards and education bureaucrats are expected to be corrupt…etc. This less than expected ROI in education makes it harder to justify more investment and the downward spiral reinforces itself.

    Comment by SM — July 30, 2007 @ 5:56 am

  15. the downward spiral reinforces itself- a very accurate description of
    public school education in India.

    So what is the reason for this downward spiral?

    Political interference?, Teacher selection criteria? lower salaries?
    Parental indifference?

    Also, I think we have a more diverse student population today than 50 years ago that makes teaching even more challenging

    Comment by Revathi — July 30, 2007 @ 1:56 pm

  16. Everyone seems to be missing the point.

    YES – the analogy Nitin tries to make seems plausible, but its specious at best. The difference is very fundamental.

    Primary education is a FUNDAMENTAL RIGHT.

    Owning a car or a two wheeler is not a fundamental right
    Automating ‘babudom’ is not a fundamental right.

    Universal Health Care is Basic Human Right…probably on the verge of being a Fundamental Right. But Education & most importantly Primary education IS. So, the displeasure expressed by M.Reddy is completely understandable. Championing capitalism is one thing – but being a capitalistic mercenary is another. Pick your choice.

    I can certainly understand the rationale – why The Economist decided on considered it worthy of print.

    Comment by Suraj — August 1, 2007 @ 5:28 am

  17. Primary education is needed especially in the rural areas . I have visited village in tamil nadu . Some parts of the village have no school .Even today childerns are carrying pots in their head bringing water which are miles away . We are talking about literacy growth . Childern sometimes drop out from the school may be due to some psychological reason . Education is must for the children .It is the duty of the education department to educate the childern and first of all parents .

    Comment by lakshmi — August 21, 2007 @ 8:18 pm

  18. Dear Suraj,

    Why is primary education and healthcare a fundamental right? Because you say so?

    Comment by Nitin — August 22, 2007 @ 7:44 am

  19. Please read

    “Begin removing bribes from Indian Education”


    Comment by Dayashankar Mohanlal Joshi — April 13, 2008 @ 7:10 pm

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