Category Archives: Education

Disinvestment in Education

I read this article by Gurucharan Das on TOI- A tale of two numbers.

India spends a respectable 4% of GDP on education and even in this 2007 budget, spending on education (and health and rural employment schemes) has increased 35%. The failure is the result of deeper disease. Surveys show that one out of four school teachers is absent in state primary schools, and of those present one out of two is not teaching. …

Even though these private schools pay a third of the salary that unionised government teachers get, they deliver better results. Hence, 53% of urban children (and 18% of rural children) now attend private schools. This is very high by world standards. Even Chile, which privatised education in 1981, has achieved only 46.5% share of private enrolment after 25 years.

Clearly, market forces are in action here. If parents choose to put their kids in private schools, no one can stop them. So, instead of hiring another 200000 teachers for government schools where the inherent culture will ensure that teachers can get away with not teaching, why not start a process of selling off goverment schools to private parties? It’s a rather counter intuitive form of disinvestment, but I forsee that this would clearly make schools more competitive.

In most big cities, private schools vie with each other to bag the most number of ranks, the highest pass percentages etc. These performance metrics have a direct bearing on the number of applicants these schools receive, and the profits they make. Government schools on the other hand are not measured on performance. Teachers are unionized, and have no fear of losing their jobs. Clearly what we need is some sort of free market competition for these schools to get their acts together.

If the goverment does sell off schools to private parties, there is still a threat of fees shooting up to market rates. Here, the solution would be for the goverment to actually subsidize such public-private schools so that each such entity can be profitable in the long run. After all is government in the business of education? At most the role of the government should be that of a facilitator who creates the infrastructure and environment for educational institutions to succeed.

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