Ashwin Pethi
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Promise and Peril: Private Education in India

The debate over the role and efficacy of the state in the Indian educational sector stretches back decades. First, some context. Over 260 million students are enrolled across the country, which is set to grow to the largest number in the world by 2025. Literacy is at 74%, and is improving for younger generations. Despite this, the gross enrollment ratio (the percentage of children enrolled, of the total eligible per age group) stands at a robust 108.6% at a primary level, but drops off to a stark 26.8% by the tertiary bracket, far behind the developed world, and even behind the average for BRIC nations.

Change, however, has been sweeping through the system. Since the liberalization of the early 90’s, the paradigm has shifted toward pulling back on public investment on education, towards public-private partnerships. About 30% of the population is enrolled in private institutions, both aided and unaided by the state. Education, which was previously a non-enforceable right under the Constitution, is now enshrined in the 2009 Right to Education Act (RTE), which has also made education up to the age of 14 mandatory and free at the point of use.

Despite the near universalization of primary education, partly by way of the RTE, the Twelfth Five Year Plan report found that learning outcomes for children remained dismal compared to similar countries, and that there was a poor link between increasing years spent in schools and learning outcomes. Children are thus literally idling their formative years away in public schools, with rampant absenteeism of relatively (to the private sector and to GDP) well paid teachers. More and more parents, even amongst the poorest, are scraping together the fees for private schools, which are seen as a passport out of poverty. Since 2011, public school enrollment has decreased by 13 million, and that for the private sector has increased by 17 million. 50% of parents in urban areas enroll their offspring in private schools, and one would imagine those in rural areas would, given the means. It bodes poorly for the government that it is failing to give away its services, even for free.

This shrinking of the state’s role, despite its problems, has attracted hand wringing from everyone from academia to politicians, who argue that education ought to be rightly understood as a public good, a utopian uniter and ennobler, lifting all into enlightenment. What, then, constitutes a public good? According to the standard definition (Samuelson, 1954), it is a good which is both non-exclusive and non-rivalrous. This entails that no individual can be excluded from accessing it, nor can a person’s partaking in it effect the consumption of any other, in the sense that it’s production can be made available from the second person onward at no additional cost.

This economic conception of a public good maps poorly onto the paradigm of education. Education is indeed excludable, as well as rivalrous in its distribution, given limited classroom capacity.  This hasn’t prevented advocates of public education from championing it in a more nebulous sense, as the price of a civilized society. The sad truth is that the government seems to be unable to foot the bill.

Data from Thailand, the Philippines, the Dominican Republic, Colombia and Tanzania have shown the superior quality and efficiency of private schools in a development context. Several studies from India show that the private sector provides a superior product in terms of classroom infrastructure, cost and educational attainment, although outliers have suggested about even performance.

Poor policy from the top is another facet of the problem. Education is a shared responsibility of the states and central government, leaving no one holding the buck. Bizarrely, children are automatically promoted to the next grade under ‘no detention’ policies, disincentivizing schools from actually educating them to the required level. The government has stepped back from this measure, scrapping it for grades five to eight, which is at the cusp of the mandatory age of 14. Public school teachers, highly paid relative to GDP even by OECD levels, face no accountability in their life-long guaranteed employment. The raft of regulations in the RTE Bill increases the burden on an already highly regulated private sector, leaving many schools reeling.

If critics and policy makers cannot swallow the panacea of privatization then public-private partnerships and encouragement of private unaided schools are a second-best measure. Stringent performance review and attendance commensurate pay ought to be introduced into the public teacher salary system.

Change, however, has not waited for the state. Government statistics paint a poor picture of the reality on the ground, given the informal nature of the Indian economy and the fact that many are entirely unregistered. Public demand is raring along as the middle class expands, and tens of thousands of institutions catering to the aspirational poor are opening every year, some charging as little as 2$ a month.  Where need beckoned, the market responded.

Ashwin Pethi

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