Privatization Would Help India's Huge Education System Improve in Quality


While India boasts of having the third largest higher education system in the world, the reality is that the country is facing a severe shortage of skilled people who enter the workforce. The reason for such a contrasting situation is the extremely low quality of education in India, of course, with some notable exceptions, owing mainly due to a weak schooling system. A possible way-out from this situation is privatization of the education system, which, in India, is predominantly publicly funded.

Privatization of education has the potential to improve the quality of education as well as to reduce costs. However, to ensure access to education for all, the government must design an effective transfer-payment system. The transfer-payment system will ensure a regular periodic payment from the government to the guardians of the respective students enrolled in private schools to take care of the educational costs.

Although India’s national literacy rate currently exceeds 75%, a study by Pratham finds that only 53.4% children in Standard V can read a Standard II-level text, and that nationally there has been a decline in the children's ability to do basic math. Another study by NASSCOM finds that 75% of technical graduates and more than 85% of general graduates are unemployable. The problem with the present Indian education system is that it is delivering a huge quantity of output, in the name of educated populace, with poor quality.

This alarming situation is due to the unavailability of skilled teachers, the lack of determination among the existing teachers to teach effectively, the poor physical infrastructure in the country, and a low level of parents’ involvement toward their children’s education. The deteriorating trend in the educational system continues largely because of the lethargy and mismanagement of the public schooling system which accounts for nearly 80% of all schools.

Despite many efforts from the government to revitalize the public education system, the quality of public education is dwindling. Consequently, enrollment in private schools, colleges, and universities, is on the rise. For instance, a recent study finds that in the city of Hyderabad, 73% of families in slum areas send their children to private school. A general realization is that the return on investment in the private schools/colleges is much higher as compared to the government schools and colleges, with a few exceptions.

The reason this is possible is the difference in approach between the two. The public education system is accountable only to the government machinery. So even if the teachers in public schools don't deliver a good quality education, they don't suffer themselves because their jobs are secure. However, in the case of private schools, the management and the teachers are directly accountable to the parents. If they fail to deliver an expected quality of education, the parents would react and enrollment may fall. The teachers’ performance, thus, would affect the schools' income and reputation. So a private school has to deliver a good quality education. In fact, they, in general, do it better than majority of the public schools.

Another issue is the cost of education. Most public schools are richer than their private counterparts in terms of total expenditure (on record, at least) and incur a much higher expenditure on the teaching and administrative staffs’ salary. The private schools, on the other hand, are thrifty about infrastructure and, in general, pay much lower salaries to their staffs. Thus, on average, at a fraction of the expenditure of a government school or college, a private institution can provide a better quality of education than the public institutions.

So privatization of the primary and secondary educational systems can help ameliorate the situation by improving the quality of education while reducing the cost. But considering India's poverty status (roughly 80% of the population lives below the national poverty line), only a few parents will be able to afford the cost of private education, privatization of education will adversely affect a large section of the population.

Given the present scenario, an alternative system which provides a better education, without over-burdening the poor parents, needs to be put in place. Now the question is: What this system should look like?

One realistic way, I think, is to gradually privatize the schools and maybe the colleges, too. The government should take care of the educational expenditure by disbursing to the guardians the cost of their wards’ attending schools through transfer payments rather than funding the schools and colleges directly.

This way, private agencies will run the institutions, and the parents will be able to afford the cost. Since the parents will have a control over the money, they can decide whether or not to send their wards to a certain school or college. This keeps the benefit of the public education system – affordability – intact while bringing in the efficiency – high quality and low cost – of the private system. So privatization of the education system, with the government taking care of the costs, seems a good way-out for India.

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