the mess in education-watching

i came across an article (in business standard) by ajay shah titled 'the mess in education'. ajay shah blogs here. and he also writes here. he is a writer i admire..but i'm not sure i agree with what he says in the very beginning of the article i mentioned:
'Everyone thinks the government should do more on education. But the case for State involvement in education is not that clear. Education is actually mostly a private good and not a public good. I study, I benefit.'
i study, i benefit. i differ with that view: i study, my parents benefit, my wife benefits, my children benefit, my neighbours benefit, my employees benefit, my co-workers benefit, my employers benefit, my community benefits, my village benefits, my country benefits. and i benefit, of course. only the degree to which all those beneficiaries ..benefit differs. if one goes by the old saying- 'a wise enemy is better than a foolish friend'- not just my friends, even my enemies would benefit. rustic logic?

then what should one call the certitude that seems to envelop many people who write on education in india- a deep trust in the market as the only solution..make that the only right solution, to all problems affecting education? and on what evidence does their confidence rest? in india, on a few studies, mostly conducted in urban districts, that you'd find here and much confidence that the markets would work the same magic in the field of education that they have worked elsewhere. backed by 'knowledge' of how many countries in the west had already achieved universal education before the states over there had decided to intervene. very flimsy evidence in my view.

is there actually a market for education in india? if yes, how large is that market? the government lies, blatantly, that 93% of all children, starting from the age six, are enrolled in schools. and you'll find evidence in the government's own records, elsewhere, that more than 50% of the children drop out before they reach age 10. in fact, if we go by absolute numbers, the available evidence suggests that the number of parents who find education useless has actually gone up since 1947.

i repeat: how large is the market? we know it's large and attractive enough for the private sector to set up seemingly non-profit study tanks to lobby for deregulation. we know many other non-profit organizations find it profitably large to focus their selfless energies on it. we know a great number of succesful players who are already in the market have, at times, made supernormal profits. and we know it's large enough for bureaucrats in the government to have a vested interest in protecting the control apparatus in education. Hasn't that been a great avenue for extracting a steady, juicy share from the rent extracted by the providers in this nebulous market?

so, how does one estimate the size of this market? is it as large as the number of students now actually enrolled in private plus government run schools? if the government, let's assume for a moment, withdraws totally from this 'business' - would all the students now in government and private schools still remain buyers in this market (assuming further of course that enough private players would step in, in time, to fill the gap)? i don't think anybody seriously thinks that would happen. but let's explore this question and attempt to find out how many kids would still remain in the market. obviously, students who are already in private schools shouldn't be a cause for worry - those dependent on the subsidised/free education offered by the government definitely are. because they'd need to 'buy' education now. how many would be able to afford it? how many parents would actually send their kids to school even if they can actually afford it? the second question is important too because of the low enrollment figures in some places and high drop-out rates in many places. bad schools are possibly one of the reasons.. but they constitute only one reason. the other reasons would perhaps provide more vital clues as to why we still haven't been able to achieve a higher literacy rate in this country.

how many kids would be able to buy education? that'd depend on the 'price' per child, which'd again depend on the cost to the private provider, of course. this survey report, made available on the ccs india site, helps us figure out some costs. the survey was conducted in low income neighbourhoods in delhi - they might provide a good indicator of the situation in delhi but one can't be sure they provide a fair measure of what could be the costs across the country. the report tells you it costs the government rs.800 per month to educate each child in a government school. elsewhere, on the same site, you learn that the govt spends around 1000-1700 per month on every child in a government school. and on another page you come across the figure of rs.2008 (reportedly the cost per child to the uttar pradesh government). let's settle for the figure of rs.1400 per child (the average of the two extreme figures), per month.

but we know the private sector can be considerably more efficient than the govt in producing and delivering most goods and services so let's assume private schools can educate each child at around one fifth that amount - say, rs.280. the survey says that private schools catering to low income households in delhi charge around rs.240 per child, on an average. so the cost per child i arrived at wasn't way off the mark. i shall finally, finally settle for rs.250 as a reasonable estimate of what could be the average monthly fee private schools could possibly charge (inclusive of profit) each child, across the country. so how many households can afford to spend rs.250 per month on educating a child? or a sum of around rs.3000 plus a year?

technically, if we look at these figures, every family in india can spend that sum. but it'd mean that a family falling in the bottom quartile of india's population would be spending anything between one quarter to two-thirds of its earnings (if it has more than one-two children) and a family falling in the quartile above this category would be spending not less than one-fifth of its income. these are the people who make less than a dollar a day on an average and spend more than fifty cents of that on food. they're definitely not in the market for education.

30% of india's population earn a little more than this bottom half - less than one dollar and a half a day, on an average. the survey i mentioned earlier studies this class ('the climbers'). the survey tells you that around 86% of households in the areas studied send their children to government schools. around 45% of these families also spend on private tutions for their kids. you could say that roughly 30% of these children (that's around 10% of the total population) could be potential buyers in the hypothetical no-government-involvement-in-education scenario.and only because they live in a city, an environment that values education.

the top 20% ('the consumers' and 'the rich') of india's population would continue to spend more than 3000+ a year on each child's education.that'd mean around one third (the rich + the consumers + 30% of the climbers) of all kids in india would be potential 'consumers' in the new education scenario. this rougly matches the size, as estimated by many pundits, of the indian middle class of around 350 million. i believe they're both very optimistic estimates.

even this 'wealthier' top one-third of the indian population , directly or indirectly, are recipients of government largesse. one form of education vouchers, education as a tax deductible expense, benefits a large section of this class. grants and other forms of aid, subsidised/cheaper access to utilities and resources such as land to private schools etc., constitute other forms of public assistance to the production and delivery of these 'private' goods. so what kind of impact would complete withdrawal of government from education have on the strength of this market? it would definitely reduce the size of the market, i'm sure.

but the proponents of 'liberation/liberalization' of education are quite aware of all these facts. they know the bottomline: the education market in india can neither survive nor expand without the support of the government. isn't that the reason why the idea of vouchers, essentially government handouts, is being promoted? in my view, the campaign for parental choice, being spearheaded by ccs india, is a tacit admission that education is a 'public good' in india because it seeks continuation of state support, albeit in a different form.

that isn't the only dichotomy in the thinking of those seeking reform in the field of education in india. until now, in this post, i've focussed on primary education which i believe should be regarded as a public good, but i've noticed an ill-advised one-size-fits-all approach towards higher education and schools among 'reformers'. how can one formula address the different probems affecting education in urban and rural india and a vast variety of socio-economic classes in the country? this refusal to recognize the variety of factors involved is dangerous - it tends to underestimate the gravity of the situation.

what does ccs india want? it advocates, it says, parental choice. a large majority of parents in rural india and a section of urban india have time and again demonstrated their choice - they'd rather send their kids to work than to school. why? the answer, as i've implied earlier while commenting on low enrollment and high drop-out rates in india, is rather complex. but i've found this explanation on the faqs page of the mv foundation website rather enlightening:

"Q: If it is all so simple then why do children get to be sent to work at all? Why are all children not in schools?
A:Only some aspects of the issue are simple. Parents are willing and capable of sending their children to school. That is the simple part but there are a whole lot of complex issues as well. In the first place to poor parents, especially those belonging to the communities traditionally engaged in agricultural labour who by and large are
illiterate, the very task of sending their child to school instead of to work is in itself a major revolutionary step. For generations they have been led to believe that the best thing for them is to initiate their child into work at the earliest and education was never a part of their economic agenda. This is exactly the opposite of what a middle class urban parent believes. Just as in the latter case it never occurs to the parents that their child should be sent to work, to a parent in the rural area who is essentially an agricultural labourer and an illiterate to boot, sending a child to work is the most natural thing in the world."
seen in that light, one can understand how diificult it is for a rural parent, or even for an urban parent who falls in the bottom two income quartiles, to send a child to school - it is akin to participating in a revolution! so the choice before such parents is primarily between the natural inclination to send a child to work and the heterodox idea of sending it to school. and these parents form the overwhelming majority of parents who have children of schoolgoing age in india.
is ccs india interested in those children? i'm not sure. it seeks to promote choice, it says, because competition would improve standards. would it also improve enrollment? that doesn't seem to be the focus of ccs india. one does sense, however, a growing interest in a growing market. but the market, as i've pointed out above, is very limited. hence the campaign to 'create' one. do i have a problem with that?


gaddeswarup said...

Do you think that any thing will come out of the efforts of UN since 'universal primary education' is the secondof their Millennium Development goals (to be achieved by 2015; see for example:

Anonymous said...

The per student expenditure on CCS website are different because they pertain to different levels of schooling in different cities. There is no inconsistency.

The issue of student dropout and parents not sending children to school has also to do with excessive state intervention in the education sector. The state dictated syllabus is often does not contribute to improving the livelihood opportunities of the poor. Most poor are likely to be employer in the informal sector, and low skills task, they thus don’t see much meaning, and rightly so, in learning the design of a nuclear reactor in class XIII. If private schools are allowed the set the syllabus the dropout rates may drop substantially.

Education vouchers are in reality an admission of the fact that government schooling is failing the poor, and the best method of helping them is the support them through what they are already doing, i.e. Private schooling.

Balaji said...

This is one issue that I've been trying to ponder, offlate. Though, I'm a firm believer in market, I believe that government cannot shirk off from the field as it is really critical for national development & India is still not economically ready to take market mechanisms here.

However, government schools in most areas are far from being any instituition of learning. A lot of government teachers just run proxy guys, & the days of honest government school teachers are running out. Government doesn't seem to have a lot of experience in running the sector.

So, a solution would be to provide the vouchers, where government can provide the Rs.3000 required for a kid in a private school, and given the growth of Indian economy and the bulging revenues, this should not be too hard. So, if we were to target, say 100 million poor kids still the expenditure would be just 30,000 Crores/year ($7b) or 0.8% of GDP. The government should target to spend around 5% GDP for education and thus can find mechanisms to earn this.

This will accelarate the education process in rural areas and the government can focus more energy on regulating how the private players are running their institutions.

I believe that governments have more expertise in supervizing & regulating things than doing things.

Anonymous said...

I thought you would be happy that CCS advocates governmental role in the form of vouchers in primary education. If CCS really were ideologues, they'd be asking for the govt. to completely retreat, arguing that parents who wanted to send their kids to school could always get loans from the financial market. And if Ajay Shah thinks education is a private good, then I can tell you that Milton Friedman thought education was a public good, which is why he advocated the more moderate alternative of education vouchers. As a matter of fact I think Ajay Shah got it more or less right in his essay. At the minimum, you don't want the government to be raising the barriers to entry for people who want to sell primary education. Education is much too important to be left to the government.

What the CCS are arguing, so far as I understand, is that the govt. instead of subsidising public schools, should give that money directly to the parents. You yourself have proposed variants of this idea.

then what should one call the certitude that seems to envelop many people who write on education in india- a deep trust in the market as the only solution..make that the only right solution, to all problems affecting education?

Do we have a choice? Do you really want the government to be the sole supplier of education in India?

RameshJ said...

So what is your solution?

kuffir said...

swarup garu,

things will move only when demand builds up at the village level. by demand, i don't mean the commonly understood term in economics, but an all-round consciousness of the need for education. the mv foundation too has similar views.

kuffir said...


about the costs: did i imply that there was any inconsistency? in fact, i think they've done a great job in trying to estimate these costs and letting civil society know about them. but i'd definitely like to know how they calculated the costs.

i've not come around, in this post, to the possible reasons behind the poor performance of govt run schools ...i've only explored at a more general level, the low demand for education in india.

i think government performance (we should say governments, i think, because the states have a greater everyday, every level involvement) has been a mixed bag. performance in some states has been very good as compared with other states. this question needs to be explored more.

kuffir said...


thanks for commenting. my own views, in general, match yours. but i'm not sure the solutions on offer now are the best. this post was an attempt to 'explore'the low demand for education in india and some other ground realities, rather than support/dismiss any 'solutions'.

kuffir said...


i was hoping you'd read this post and let me know your views on the subject.

you know quite well that i am quite opposed to a role for government in a large no. of areas.. to put it more crudely but expressively - in 90% of fields of enterprise/activity. you know i am decidedly pro-reform and liberalisation. but i think you've reached certain conclusions, prematurely, on this post. some of them are rightly drawn and some maybe not. but i regard this as a half-finished post..i had to cut it short because it was growing too long. i discuss some of the issues you raised in my next post which is still being drafted.

no, i don't know how ccs sees itself but i did find a long quote of hayek's in a page devoted to describing themselves. i have also tried pointing out in this post why ccs sees a role for govt in education - because there is no large market for education, i mean primary education, in india. and only the govt has the necessary resources to fund a large market.

i know friedman regarded primary education/secondary education or k-12, as they call it, a public good. he also regarded education in such fields as the 'liberal arts' as a public good. i discuss some of his views in my next post. and i agree with your implied observation that this debate is not worth spending a lot of time on...but it is needed.

i too think ajay shah got it more or less right in his essay, especially with the policy situation as it exists in india.. and on higher education. my major difference was with the idea of education (especially primary education) being regarded as a a 'private good'.

'What the CCS are arguing, so far as I understand, is that the govt. instead of subsidising public schools, should give that money directly to the parents. You yourself have proposed variants of this idea.'

venu, if you go through their website more closely you'll find that there are a lot of things that are left unsaid, that remain unclear. for instance, we don't know whether ccs is advocating a system of vouchers for all students or just for poor students, whether they want to focus on urban india or spread across to rural india, whether they want complete deregulation or partial regulation (like with respect to syllabus etc.,) what kind of role they envisage for the govt in the adminstration of govt schools.. etc., etc., for an advocacy group they're quite secretive about what they're advocating.

yes, i do believe the govt should pay out a dole, or 'bribe' them as the mexicans call a similar programme i'd discussed in earlier posts, to parents in rural india to persuade them to send children to school. i had suggested this to meet two objectives : 1) to replace most other leakage prone subsidies/poverty alleviation programmes 2) to act as a kind of an incentive to parents with children of schoolgoing age (that is to be the only condition for receving the dole). don't you see the difference between that and the vouchers? india's major problem in education has been to attract and to retain students in school. for many parents, as i've pointed out in my post, the choice is not between 1)school a and 2)school b, but between 1)work and 2)school. school choice programs are relevant only when the second set of choices becomes irrelevant for most parents.

kuffir said...


welcome. let me tell you at the outset that i've read a few of your posts..and liked them (especially the ones on the 'knowledge commission' and on the 'ninth schedule').

in this post, i was not trying to offer any solutions.. i was only doing some exploratory groundwork on the school education situation in india and.. trying to evaluate whether cetain 'reform' ideas are based on a realistic assessment of what's needed to improve the situation. i welcome your own views on the subject.

RameshJ said...

Thanks. I think the first step of freeing education from the bureauctaric grip is straight forward (In the sense, that I do not see any other option). The second step that you are exploring ( i.e is that enough ? will it get _all_ kids to school etc ) is a question that does not have easy answers. So why not push for the first step and then work on step two ?

Also the experience so far has been that allowing for private provisioning of goods/services has taken the pressure off the government to meet the demand ( phones is probably the best example, BSNL today is way superior to what it was 10 years back.May be drinking water in railway stations is another one). This does not mean that the Governement neccessarily has to move out of provisioning. In the long run , it could do so if its objectives are met.

BTW disagree with you on education being a public good based on the logic you cited. If I use the same logic, then jobs are also public good. For if I have a job, I am better off, my family is better off, My community is better off, etc

Venu said...

Firstly, the lack of detail on CCS's part may be just due to the fact that they have started out only recently. Ideas take time to mature and concretize. I too felt that the ratio of rhetoric to policy was higher than it should ideally be. But I want to be charitable and give them the benefit of doubt.

Secondly, if, as you say, rural parents don't see any point in sending their children to school, then any bribe you'll give them will just be used for other purposes. We've gone over the issue of how to create demand for education in rural India a few times, and I guess the approach CCS people take is that parents will take education more seriously if the quality of the schools improves, and we all know a good way of improving quality - to introduce competition.

kuffir said...


'Secondly, if, as you say, rural parents don't see any point in sending their children to school, then any bribe you'll give them will just be used for other purposes.'

yes. economic reasons aren't the only ones that stop parents from sending children to school... but economic and any other possible incentives will have to be used to not just increase enrollment but also interest in schools. because i don't believbe we can afford to delay/ignore universal education at the primary level any more - it can derail progress elsewhere.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

I work for CCS and thanks Kuffir for the post. Though it is difficult to keep it brief, I will try. Hopefully send a FAQ on school choice later. Here are some of the things I keep in mind when talking about state of education and how to improve.

*) I thought I will say this at the end. But since this comment post is long, some may skip it. So here it is. All the stuff CCS and others are talking about are already happening. If you listen to budding education entrepreneurs and the movement towards mass scale budget schools for the poor. Poor are voting with their feet by moving to private schools, even in rural India. Various opportunities and pressures are pushing entrepreneurs-for profit and charity-to explore and deliver all kinds of solutions. I have come to believe that the poor are revolting, in a very silent and peaceful way, by leaving the governmental system. These are not just brave statements of a free marketer. I am actually shocked and pleasantly surprised by the scale and scope. Until now I thought CCS was cutting edge leading, but we seem to be following millions of poor and uneducated. I am not complaining.
*) CCS is not being secretive. We are just acknowledging that voucher, cash transfer, corporate and individual tax credit, tuition reimbursement (SC/ST scheme in Delhi) are just a few ways of implementing parental choice. Though the actual implementation is important and requires a lot of work, the basic principle is vital - fund students, not schools. This empowers the parents to choose. This principle should not be missed.
*) We want many pilots to be tried by all kinds of organisations, including government, to try various approach. Let there be a million experiment.
*) India is too diverse to say one size fits all. CCS is preaching the basic principles and collecting case studies from around the world. We fully expect others to come up with innovative implementations of the system. We already heard a minister talk about use of voucher to solve his problem in an area and in a manner we never thought about.
*) Even small percentage in India means big numbers in absolute terms. But we should not make public policy based on exceptions. That is, there are many children who live far away private schools. That shouldn't stop us from trying out private solutions for far more millions of poor children who do like near private schools -urban, semi-urban and rural. Or where entrepreneurs can easily start a school if the consumer can pay. You cannot sacrifice millions of these children to failed government school just because we don't have a silver bullet yet.
*) By transferring resources into the hands of the poor, via voucher, etc. you are transforming them into empowered customers who can now pay. Then we have a situation that is very different from what we have now. Then we can no longer argue that poor can't pay for education.
*) Like all technology, education technology (teaching, budget schools, accredition, testing, satellite based, etc. etc.) to become scalable to reach millions goes from urban to rural, rich to poor. So though we must care about the student in remote places, absolutely we must, we should not block all experimentation and pilots just because we don't have a universal silver bullet solution. (Substitute the words mobile phones for school. Ask the same questions about sociology, scalability, affordability,..... Few years ago mobile phones were available to rich, urban westerners. Today poor rural women in Bangladesh use them for profit. If we were to declare mobile phones a fundamental right, would we ask government to run phone manufacturing and distribution companies? Max we would hand out government vouchers.)
*) The basic premise that people, especially poor, in rural area don't value education needs to be challenged. Not in some patronising, urban-elite kind of way. This years ASER from Pratham point out the dramatic increase in the number of private schools in Punjab and Haryana, in yes, rural areas. The report only talks about rural India.
*) CCS has done some research on relation between increase in literacy and liberalisation. In the last 60 odd years, last 10 years coincides with the biggest increase in literacy. Our explanation is people, especially poor who have very limited resources and hence are going to be very cautious with their money, put money into ventures only if they see any return. For example, if I spent lakhs on computer courses in the 70s, what would I gain out of that? But in the last decade many lower middle class families and others have poured in lakhs out of their own pockets. Because they expect to recoup it. Similarly, today sending your son or daughter to school, instead of sending them to farm, has its long term monetary benefits. Hence the increase in basic literacy.
*) Quality of existing schools, read government schools, for the poor is another reason why parents would rather send their child to work or keep him at home than send him to school. PROBE other reports mention poor rural and urban parents saying (paraphrasing)- sending my child to that school will only ruin him. There is no discipline, they smoke and join gangs and get into trouble. There is no one watching over them or teaching.
*) All kinds of study, including Pratham's and Tooley's study (available on CCS site or email me (rajcherubal@gmail.com) clearly shows poor are voting with their feet. They are not waiting for us to decide. They are increasingly picking private.
*) CCS is talking about government getting out of the business of syllabus making. At the risk of repeating, India is too diverse to have a "national" syllabus. As we have seen in the past, such an act of syllabus making will be a political exercise more then educational. Equally important is that there is no one kind of Indian child. Millions of kids may need to switch to vocational after say, 8th, while other don't. This will clearly have a very positive impact on dropouts. There was a report on tribal children dropping out. The reason. Their centralised education was in Hindi. A language as alien to them as Greek or Russian. Syllabus needs to be decentralised and de-governmentalised.
*) Another fact on drop outs. Lots of drop out stats mislead. Many drop outs out of govt schools end up in private unrecognised schools. Since these children cannot take board exams if from unrecognised schools, they register in govt school but study in private schools.
*) The reason I am throwing all these fact into this post is because most people who talk about education generalise. It is heart breaking to see little kids working and begging on the street. Also we have been conditioned to be suspicious of anything private. Hence we make generalised statemetns like "private schools are sucking the blood of poor", "poor don't understand the value of education". Like Tooley's surprising finding, data tells you an entirely different story.
*) Even if you believe government has an obligation in funding education, that need not mean government should build boxes, hire teachers, buy countless aids like black board, keep up with the fast changing ideas of what education is and how to deliver education, etc. Children must get the best education money can buy. Why do you care if that happened in a government building or under a private tree?

kuffir said...


my conclusion, i think, on education being a public good is sound... and the logic is only an extension of what ajay shah uses in the article i mentioned in the beginning. jobs are not goods that are produced and delivered, education is.

i've no problems at all with any untangling of bureaucratic fetters on private enterprise in education - provided it is private enterprise. but look more closely, that isn't only thing that ccs india is interested in. it wants the govt to fund the market too - is that what the govt did in telecom and other deregulated businesses?

as a nation, we broadly look to achieve two goals in primary education -quality and reach. until raj cherubal in the above comment disabused me of it, i had entertained the idea that perhaps, ccs india was interested in at least the first goal - improving the quality of education in, at least, some geographies. i'm not sure about that any more.

Anonymous said...

Sorry, if I gave the impression that we are not interested in quality and/or reach. We are. But it won't happen over night. I see it happening in stages. I think it would be damaging to education if we take the all or nothing, right now, everywhere approach.

Quality (may be not reach) is difficult for every one to agree on. So even if every Indian is rich an can afford "good" private schools, we may not agree that quality for all has been achieved.

So,like the poor parents are doing now, let them decide what quality is. (Another huge issue, I am just beginning to learn more, is that private entrepreneurs are already starting to address is quality of low cost schools. Let us give them time. Too long a topic).

I did not get into private/public good debate since even liberals cannot agree. But one quick point. What is private/public seem to change with time. If you had asked few years ago, you would hear infrastructure very much in the public goods category. (Except very purist liberals). Today that is not so clear. Just yesterday Narayana Murthy said govt should get out of infrastructure all together. I agree. I think he is echoing what many without ideological labels believe. So we may be arguing about a shifting target. Ten years from now many will say the same about education.

Clarification on "government funding the market". If I were to stretch it, I see indirect subsidy as funding the market. Government funds fertiliser companies, builds and runs schools, etc. I am totally opposed to it.

I am saying, if at all, in case of public goods, let govt give money directly to the individual. Fund the individual. They can decide.

Theoretically, what if govt were to shut down all ministries, except defense, foreign etc. (public goods ministries). Take some money from taxes and gives cash to poor. Let the poor decide whether to buy fertiliser, rice, education, or what ever.

Since we don't have that right now, let us move towards it. let there be direct subsidies for public goods. Let govt fund poor individuals (consumers) and not providers of goods and services, in areas that many of us consider public good. Let the providers compete for the consumers' money.

Democratically, if we decide something is not a public good, govt should stop transferring taxpayers money to individual. Until then ....

Hope to meet you sometime Kuffir.

kuffir said...

raj cherubal,

i apologize for not responding to your comments earlier...i was in two minds about whether to respond here, in the comments page.. or in a fresh post. i've decided on the latter option considering the issues you've raised. please bear with me for 4-5 days..

Gaurav said...

There may not be (or may be as Raj has said) a vocal demand for schooling in rural areas right now. But isn't there a latent demand that might be unleashed if the product offered is of the right quality and price?

The success of cellphones in urban India is a supply-driven success. In the 90s, cell-phones were too expensive and were owned by too few. The masses weren't clamouring for cellphones which were seen mainly as elitist luxury goods. But a supply push which drove down the price, increased quality, competition, and also very importantly, brought network externalities into play, created demand dynamically. Because there was a latent demand for it.

Similarly, in poor areas if the nature of the good in offer is changed, demand for it could and I believe will shoot up. The rural poor are not stupid.

Look forward to your next post.

kuffir said...


you raise an interesting issue - does education engender network externalities? ajay shah doesn't think so (he says that in the article). i believe education has a lot of positive externalities/effects but i'm not sure about network externalities of education.. if it does engender network externalities we'd have noticed a far greater spread of interest in education by now in the countryside. i think there has been more clear research on the network externalities of new, high technology products...than on any other kinds of goods.

Cosmic Voices said...

The frequent quoting of the telecom revolution in India as an endorsement of market is very misleading. More misleading when it is shown as a role model for education. A user can realise the benefits of a telephone in 15 days. But the benefits of education cannot be realised for atleast 15 years.

And even for a product where the benefits are immediately visible, there companies which prefer to pay fine rather than meet the rural telephone obligations. That being the scenario how do we trust that market deliver education in rural areas?

It is widely acknowledged that the cell-phone success is supply driven. But it should be remembered that it is extremely easy to increase the supply of material goods. A mere erection of a tower or laying optical fibre cables can increase the supply by say, a 100. But can you say the same of a teacher?

Finally, irrespective of whether a school is run by the govt. or private, the manpower has to be drawn from the same milieu. The major reason for absenteeism is that a post-graduate, who would had lived the years of his youth in a town would find teaching in a remote village as a retrograde career move. He would always aspire to move to the nearest metro. This, I am afraid, is not likely to change much just because the school is run by a private organisation.

Eventually, the private school would be delivering less for the more money under the garb of increased quality.

The whole talk of "empowering" the poor with choice is deceptive since to make choice, one must be sufficiently educated. And in this regard, the private sector is very dexterous in using media to further its interest.

Btw, CCS says that "More than 3/4th of the government teachers and parents and, 82% of the private school managers and principals felt that parents must have a say in the management of government schools in order to improve the education system. This reinforces the claim for a decentralized education system where teachers and schools are accountable to parents as opposed to education officers."

Then why not govt funded community owned schools? May be because it would not direct public money to private schools.

gaddeswarup said...

Cosmic voices,
I have been getting similar doubts. I am glad that somebody closer to the situation articulated them.

Anonymous said...

CV, if education is indeed tougher to supply than "mere" cell phones, it's not apparent to me why it follows that the government can do it better than the private sector. In general, govt.s are lousy at producing anything at all, but many people deem them necessary for the production of public goods which will otherwise remain under-provided. That there are hundreds of private Engineering and Medical colleges that have opened up in the last decade, and some of which, despite their short existence, are performing on the par of many older governmental colleges, should disabuse you of the notion that education is harder to provide for private players.

The "manpower has to be drawn from the same milieu" argument also does not convince me. If there are profits to be made, private schools will figure out how to attract teachers to the countryside. I don't know how they are doing it, but they are already doing it, and the data seems to say that private education even in rural areas is of a better quality than govt. schooling. (see, for example, here )

"why not govt funded community owned schools?" This is not a bad idea. But this idea and education vouchers do not contradict each other. You could give parents education vouchers while at the same time, encouraging greater participation of parents in govt. run schools. I still don't get why you (and Kuffir) are so vigorously in opposition of vouchers. It's not as if anyone is asking that govt. schools themselves be privatised. Govt. schools will still be there, and if you still like govt. schools, then sure, redeem your vouchers at a govt. school and send your kids there.

And, btw, please do not imply that the CCS or I or anyone else who supports education vouchers have diabolical motives to transfer "public money to private schools." None of these private schools are, as yet, big corporates which can give money to policy think tanks like the CCS. It's bad form to accuse others of having ulterior agendas without enough grounds.

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gaddeswarup said...

"In general, govt.s are lousy at producing anything at all, but many people deem them necessary for the production of public goods which will otherwise remain under-provided."
These situations seem to change. In my day ( I am 65 now) most I knew studied in govt. Telugu medium schools .The standard eng. and medical schoolswere run by govt. Those called donation colleges were starting and were considered far inferior to govt. run institutions. From the comments so far, the situation seems to have changed considerably. I visited two schools last year in one village. The govt.school is definitely run down with teacher politics and some in the village started a (at the moment) non-profit school. So, the situation seems to have changed. My doubt is whether we can take such changes to be permanent. Secondly. who will monitor the quality or indoctrinations that may come with privitization. Since I am away from the scene, I cannot say more with any assurance. What I noticed in Australia some of the govt.schools (not all) are doing very well. When a school does well lot of Asians seem to move to the suburb and there is even more improvement. The universities started looking for funding from overseas students and generally went in to money making schemes and the standards are going down. In the universities I visit in USA, the situstion is again different.
From these examples, it seems to me that there are no permanent recipes and any changes have to be thought out carefully. Is there any hope of improving the govt. run schools and bringing them back at least to the standards in my day?

kuffir said...


'I still don't get why you (and Kuffir) are so vigorously in opposition of vouchers.'

i haven't as yet outlined the reasons for support/opposition to vouchers. in this post, i've tried to see whether the underlying premises of the voucher proposal- a)that an education (primary) market exists in india b) and it is the govt that's restraining the market from growing are reasonably valid. i've tried to point out that, at least, the first premise is overstated... and that available evidence doesn't suggest that there is one dominant reason behind the lack of growth of the 'market'.

as for any possible grounds for opposing vouchers... please read raj cherubal's comments more carefully.

Cosmic Voices said...

I am glad that you quoted the case of private engineering and medical colleges. Unfortunately, their example instead of disabusing, reinforces the failure of private sector. Firstly, professional colleges are more like cellphones than primary education. They offer you a promise of employment after the stipulated 4/5 year period, which is not the case with primary education. Secondly, the system has been an organised racket.In addition to the fees which around 30k, the colleges fleece money in the form of numerous deposits, lab fees, transportation costs etc. This is over and above the capitation fees. Despite this I know colleges which hire computers when there is AICTE inspection. No wonder there has been a mad rush in opening the colleges.That there has been a proliferation of pvt colleges is no certificate for their quality.

One of my apprehensions about the vouchers is that the pvt schools might find the scheme to be a easy way to make a quick buck. Presently, the pvt schools have to not just fight with other schools but also with other sources of expenditure. When it is assured that the said money will definitely go into education, it is just a matter of which thief will get the loot.

Coming to the quality, let me assure you that even the best pvt engg college is only a trifle better than the worst govt college. Be it in terms of infrastructure or brand name or placements. Having been educated in a pvt engg college, I have observed their machinations from close quarters and I am worried that the similar sham will be replicated in primary sector. Only this time it would be on a massive scale since the consumers are more gullible than the educated parents of engineering students.

And finally, the efficiency of pvt sector is always exaggerated. Be it their billing methods or their customer care, they are no good than govt. I can say this for sure with my experience with my cellphone and credit card companies. One thing is for sure with the govt companies. They may not provide the best of service, but they never never cheat you , which is quite common with pvt sector.

The statement of "transfer public money to private schools" was lifted from the ccs website. So going by your logic, probably I should call the CCS "diabolical". Btw, 10 years ago no one would have thought selling groceries would be a business big enough to fund civil societies. Can you say the same thing now?

Hari Mallepally said...

I didntfollow the full context and stuff of the post (it was bit big one and its on important and serious topic).

For me it is about making people rich enough to buy commodities like education.

I was listening to Kiran Majundar on "India poised" discussion this noon.

Reservations, subsidies etc big topics of discussions.
But she says we need to amplify the resources available.

what i believe is that, we need to concentrate on working on a solution for the root cause issue like poverty.

my own experience with poverty is that giving money alone to poor will never be an act of wisdom. poor will not use it properly if we give them just money.

There needs to be motivation about a good living. people should understand the same.

poor should understand how to come up in life on their own. they need the required support to make it.

that will actually solve problems on a large scale.

providing subsidies etc should be a temporary solution.

irrigation, infrastructure etc should be given highest importance by the govt. power sector too needs huge investment.

regaring poor empowerment, it should be public-private-not for profit organizations collective effort.

Anonymous said...

(Suggestion to Kuffir: if the comments were on a pop-up page, it would be easier for me to see the last few comments while adding a new comment, as the text box appears at the end of all comments - now I have to scroll a long way down to see what others have written. You can enable this option somewhere in the settings page.)

CV: I myself have not studied in a private engg. college, but have plenty of friends who have studied in them. I agree with you that a lot of private colleges out there suck. However,
-> There is simply no way the demand of higher education in this country can be met just through govt. colleges. Read this post, for a more detailed exposition of this view.
-> The problem with the quality of private colleges is because the govt. is doing a shoddy job of inspecting quality ratings to private colleges. But I don't think this is a problem even now - people *know* roughly how good or bad a college is before joining it. It's not hard to ask a few existing students as to how good a college is.
->Also, I believe competition is improving the quality of these colleges. You can easily see the effect of competition by comparing medical colleges and engineering colleges (in AP). There are far fewer private medical colleges in AP than there are private Engg. colleges. The capitation fees for medical colleges is exorbitant, (around 15-20 lakhs for a college which started less than 10 years ago), whereas the capitation fees for a Engineering college of comparable reputation is far lesser (less than one lakh, in fact). And it's not as if the quality of education the medical students are getting is any great. I wouldn't dare to put my life in the hands of one of these doctors. On the other hand, the skills of my friends who have studied even in Engg. colleges which have opened only a few years ago are decent - good enough to get them jobs. My diagnosis for the situation - there are far fewer medical colleges around, which means they can give as low quality a medical education they want and still get away with it, because students are grateful to get some degree at all.
-> I would say there is hardly anything to choose between university colleges and some of the better known private colleges such as CBIT, GITAM etc. I studied in REC Surathkal (govt. run, of course), and I can attest that college and faculty wise, there wasn't much in my college that wasn't in GITAM. The only reason my college continues to have a good name is because the students it admits are of a higher quality than those who get into GITAM. We learnt a lot from each other than we learnt from our teachers.
-> You only need to provide an education that is useful enough, you don't need to provide an education that is better than that given by university colleges. In this aspect, again I see private colleges as giving a useful enough education. You and I may think it is too low, but the many companies which recruit
these graduates think they have useful enough skills.

I concede that the situation is far from perfect. But I see the situation as improving, and mainly because of the effects of competition. And I would not be so quick to characterise these people as fleecing money. (You should see the fees that universities in the US charge for a college degree.) Again, the fees have rapidly gone down in the last few years because of competition (I know the capitation fees atleast have seen a sharp drop for Engineering colleges). College education *is* expensive, but we have been habituated by years of govt. subsidies that we have a right to cheap college education. I believe that the IITs and the RECs and the IIScs and the IIMs are a scam on the taxpayers, the way they use public money to subsidise college education, which is essentially a private good.

I find the statement that govt. services never ever cheat you as laughable. Every time there is a "load shedding", I have been cheated out of power. Every time there is no tap water, I have been cheated. Every time I had to pay bribes to the govt. officials, I have been cheated. Every time the phone went dead (and this used to happen a lot when I was a kid) I was cheated. I have been cheated out of the choice of multiple electricity companies, I have been cheated out of the choice of multiple railway service providers, and until some years back I was cheated out of the choice of multiple telephone providers. I could go on, but you get the point.

Anonymous said...

CV : To clarify on my govts cheat example, to me cheating is indistinguishable from bad service. Bad service becomes especially unbearable when you have no option to switch the company. And of course, just apart from bad service, I believe govt. sectors do cheat in the sense you used the term. All the people who have been displaced due to dams have been cheated out of their lands and livelihoods. But let's not get into all that now. My main reasoning is that we are not beholden to private companies the way we are beholden to the govt., and besides private companies have to constantly compete with other private players. Both these factors increase the quality of private services with time. Financial fraud (like that of Global Trust Bank) is something different, and the reasons for which are too complicated for me to go into now. For now, let me just state that the financial fraud govt.s do largely goes unnoticed - just look at the huge deficits govt.s run, effectively borrowing from future generations without their permission.

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Cosmic Voices said...


I would not agree that poor service tantamount to cheating. Cheating is when you are charged despite the non-supply of power. That never happens with the govt. Let me again reiterate that govt is still the more ethical than any pvt concern. The simple reason being absence of profit motive.

Coming to the point of pvt engg and medical colleges, the issue was as much of deceiving gullible parents as of quality. The quality is improving, but in the process numerous parents and students were and are getting duped.

If vouchers are issued, the pvt sector will have an assured income. It would just become a matter of who would be getting booty. And with the huge supply of vouchers, every pvt school will have a gala time in making a quick buck. For the efforts that might be undertaken, I don't see commensurate increase in the quality.

gaddeswarup said...

"Let me again reiterate that govt is still the more ethical than any pvt concern. The simple reason being absence of profit motive."
CV: I think that you are overstating your case. My impression is that centralization and bureaucracy have been seen as serious problems for a long time. Lack of theoretical 'profit motive' of governments does not prevent bureaucracies from inefficiency, corruption or entrenching themselves. In spite of this, there is the question whether primary education is a public good (and I think that it is, though this may change with time) and how best to accomplish it. Whether through govt. or private enterprise or a combination, who monitors the quality etc ( there are stories of some unregistered private schools and those who do not want to register with the govt.).
I may be stating the obvious, but I am just trying to learn from those who thought about these problems and know the situation in India from close quarters.

RameshJ said...


jobs are not goods that are produced and delivered, education is.

hmm... If one looks at Governments apporach to job creation, one gets a feeling that it is soemthing that needs to produced and delivered :)

BTW Wikipedia has a very differnt definition of what public good is ..

If CCS did not ask for vouchers, then all and sundry would have leapt up & said that they want education only for the rich, How can the poor afford private schools etc.

Cosmic Voices said...


I agree that there is a "profit motive" in the bureaucracy. But that is at the individual level. The system has a vigilance and accountability mechanism. Even if you say that the ministers and bureaucrats are hand in glove, you still have redressal mechanisms like parliament, courts, CVC, etc. In short, there are checks and balances to check the "profit motive".

Can you vouch the same for a pvt concern? As long as the profits are generated, the means are forgotten. It is here that I fear that the rural poor would be an easy source of profiteering.

I am not putting the govt on a high pedestal here. But what I am trying to say is that the pvt sector is not what it advertises itself to be. One of the major reasons that govt is pilloried is that it allows itself to be criticized. It gives numerous options for the citizens to highlight its failure, both internally, through its redressal mechanisms, and externally, through press.

A cursory visit to any of pvt service providers like telephone (which is often touted as role model) will reveal the their true colours. The press, whose lifeline is corporate advertising, seldom brings out scams and scandals in pvt sector. So just because we hear more about the gray areas of govt doesn't mean that they are worse. Let the pvt sector have the courage to subject itself to an independent audit like CAG and then may be it can talk about the corruption in public sector.

Till then I would still hold the govt to be more ethical, atleast on the basis of their openness to public scrutiny.

gaddeswarup said...

I a not supporting privitization. I have seen failures as well as successes of both types. For exmple railway services are cheap and have considerably improved in India since my college days. In USA there is deterioation.I travelled from Ann Arbor to Chicago a few times. The trip was supposed to take three and half hours but was often about two hours late.
If at all I would like the govt. institutions to have a go first and go for privitization only in the case of serious failures, particulartly with cases like primary education. What all I was suggesting was to look at the history and case studies of the problem in India (foreign examples may or may not be relevant, but we should study them too). These I do not know since I have been abroad most of the time since 1979. I am hoping that those with more Indian experience can tell me.
I do not have any particular ideolgy though I heard my daughter telling my grandaughter "He is a communist. Do'nt listen to him."

Cosmic Voices said...

Swarup Garu,

Point noted and agreed! Being a teacher, I think you must share with us your experiences abroad. It would definitely help us look beyond time and space confines.

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