Sign Up For Our Newsletter

The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine.

-Article 21A, Constitution of India 

The Indian government, often known for its corruption, bureaucracy and socialist leanings, has not been very successful or efficient when it comes to providing the universal and free education that the constitution now guarantees as a fundamental right to all citizens.

One would imagine that Third World governments don’t spend much on education, but education in India receives substantial funding, both state and federal. From 2001 to 2005 the government spending on education approximated 4-6% of the GDP.  Clearly, the problem with education in India and the poor quality of public schools has more to do with the government regulation than lack of funding.

This poor quality of government education has given rise to a large market for private education offered by excellent institutions. Not surprisingly, the fee in a private school is often less than half of the per-pupil costs in a government-run school which has huge administrative costs. In a public school in New Delhi the average per pupil cost has been estimated approximately at Rs.10,000 ($220) per annum and the private schools in the territory of Delhi offer much better quality of education at about half the cost, a trend also witnessed in the United States. In a study by James Tooley and Pauline Dixon, the reasons for such high costs have been attributed to personnel costs and administrative costs for the upkeep of the entire education bureaucracy. The study has managed to encompass education in India: too much government spending, too much regulation, large bureaucracies, stifling of private entrepreneurship and exploitation of the common man.

The other problem is that despite the lack of quality government education, the private enterprise cannot effectively take over and rescue the current generation from public schools. Indian states have a plethora of licenses which are required for opening a private school. For example, according to a study by the Centre for Civil Society, in Delhi one must acquire fourteen licenses from four different government authorities (state and federal) for opening a private school. To legally obtain all fourteen licenses it would take 10 years on average. This period may be reduced to 3-4 years if one is prepared to set aside 20% of the investment for paying bribes. Due to this, a large number of private schools have sprung up offering excellent education, though unrecognised by higher education institutions because they do not possess the required credentials.

With a population of more than one billion, India needs as many public and private schools as it can offer at the lowest possible cost.  Many reformers have suggested two main solutions to solve the “education deficit”. The first is to introduce school choice in India through a voucher system. The second is to completely deregulate the heavy licensing requirement for opening private schools. One of the chief proponents of both these ideas is Centre for Civil Society, a free market think tank based in New Delhi.

School choice is as efficient as it is politically difficult to manoeuvre. It requires the government to provide education vouchers accepted in any school within the state/district giving parents the choice to send their students to any public or private school. This essentially implies funding the student as opposed to funding the school. The recent announcement by the Indian Planning Commission to introduce school choice as a pilot in the Eleventh Plan has not come a day too soon. However, a country that still has a planning commission can hardly use the term “voucher” easily without offending the left intelligentsia; it is surprising they even used the word “competition”. Thus the commission has eloquently said, “We need to experiment with this possibility by undertaking pilots that provide suitable education entitlements to children which are reimbursable to the school. This will create competition by allowing people to choose between public and private schools.” Meanwhile, school choice proponents like the Centre for Civil Society are trying to introduce such pilots by persuading state governments to partner with think tanks and private schools.

While school choice is the most important step towards providing better quality education, the government can hardly keep up with the growing demand for education. It is essential that the private education market be freed of the entire regulation and licensing requirement which has only two consequences: corruption and non-recognition of some excellent private institutions which are still awaiting their licences. To increase the number of private schools the government must have a single regulating authority as opposed to multiple licensing authorities. Secondly, since education is a top priority for the government, concessions should be given to private schools in densely populated urban areas where the government cannot easily start a school. Also, the government could set up SEZs–Special Education Zones–where the licensing requirement would be waived and the government invites premier institutions to set up schools.

These recommendations to improve education in India are not novel. They simply follow the age-old wisdom that the market has taught us. It is no secret that competition improves efficiency and private enterprise brings innovation. The Indian education market is no exception.

Shruti Rajagopalan, a former intern at the Alliance for School Choice, is currenly a third year law student at Faculty of Law, University of Delhi, India.