The Hindu Business Line : Market-oriented reforms can score in education too

The target of spreading education has been achieved. Now its quality must be enhanced. This can be done by privatising government schools and regulating them effectively. The time has come to implement market-oriented reforms in the social sector too, says BHARAT JHUNJHUNWALA.

The focus of the Budget is on expanding education. Businesses were expecting some relief in income-tax. Instead, they have been subject to an additional cess of one percentage point for secondary and higher education in addition to the present 2 per cent for primary education. The Government will collect an additional Rs 6,000 crore from this cess and use it to provide scholarships to those who have passed class VIII, and students belonging to Scheduled Castes/Tribes and minorities. The focus on education is welcome as it is the foundation for the services and knowledge-based sectors.

Poor pass-out in govt schools

The Finance Minister, Mr P. Chidambaram, has sought to expand education through the government system by appointing two lakh additional teachers. But this is unlikely to improve the educational status of those at the grassroots. The average government school pass percentage is about 40 against the private schools' 70, though government teachers most often are better paid compared to their private sector counterparts.

If despite such added attractions as the mid-day meal, students of government schools perform poorly vis-à-vis their private institution counterparts it is because the teachers of the former are charged with only completing the curriculum. It is up to the student to make the effort to "learn". This, perhaps, explains the poor results in governmentschools . The Finance Minister rightly said in his Budget speech that funds were aplenty but the problem lay in implementation. The government teachers, however, cannot be entirely blamed for this state of affairs; the parents have a role to play too. Most government school students come from low-income families; in the struggle to earn living wages, school and studies can hardly be expected to head the priority chart.

One way out could be to privatise the government schools to improve the quality of education. Simultaneously, an independent regulator should be appointed, along the lines of the Telecom Regulatory Authority of India or the Election Commission.

The financing of the schools, including teacher salaries, will be from the fees generated, as happens in private institutions now. This will mean attracting students which can happen only with quality education. .

On the demand side, families need to be empowered to pay the fee (about Rs 700 per month) of private schools. Most States use the entire receipts from sales tax to pay salaries to government teachers. With this money saved, it can instead be used to building infrastructure through public works. This will lead to more jobs and higher income for the families and enable them to buy quality education.

Market-based incentives

The demand can be further enhanced by providing education vouchers to school-going students.

The Finance Minister has himself shown the way. He has announced that the Government would reimburse the Provident Fund dues paid by private businesses to disabled employees for the first three years of their employment. The idea is to provide market-based incentives to alter the nature of employment. Nobel winning economist Prof Edmund Phelps had suggested that European governments provide employment subsidies instead of welfare benefits.

This idea can be applied to the education sector in India. Every child of school-going age can be provided with a voucher that can be used to pay fees to a school of his or her choice. The sum required for providing this money to 25 crore students will be about Rs 210,000 crore per year, which is probably less than the salaries being paid to government teachers by the State governments.

The policy of PSU disinvestment can be extended to the social sector. Of course, there will be dissent from the government teachers community, but the government has to convince it that there will be no significant loos of job, only the accountability factor will rise.

According to the Vice-Chancellor of a Central University, the increase in the outlay on education was still insufficient in view of the implementation of the reservation policy. This is along expected lines.

The country cannot afford a huge welfare machinery that only drains it of funds, and benefits a small section that is most often not the intended target.

Education has spread

At the time of Independence, there were few English medium schools in the country, and there was, thus, a felt need to expand education and only the government was capable of making the investment.

Indeed, an excellent set of schools did come up and from it emerged many of India's leaders in diverse fields. But that is all past, and private schools have spread to remote areas as well.

So, the target of spreading education has been achieved. But now its quality must be enhanced, especially if the country is to reap the demographic dividend. The way to go is to privatise government schools and regulate them effectively. The time has come to implement market-oriented reforms in the social sector as well.

(The author, a freelance writer, can be contacted at bharatj@sancharnet.in)