Over the years, India has tried many approaches to improve the quality of school education. The lack of quality in state schools has created a two-tier system of school education. Those who can afford, go to private schools and those who cannot go to government ones. The children of the poor have no option but the poorly functioning state schools. This gross inequality of schooling opportunities is the result of our current approach to education.

School vouchers are a tool to change the way government finances the education of the poor. The school voucher is a coupon offered by the government that covers the cost of education at a school of student’s choice. The schools collect vouchers from students, and deposit them with their banks, which is then credited to the government. No money actually changes hand, only the voucher moves from the student, to the school, and back to the government.

In the present system, the schools are accountable to the government. The voucher system makes schools accountable directly to parents since they pay for their education through vouchers. In a voucher system, instead of funding schools, the government funds students. A voucher in the hand is a genuine empowerment of the poor. They have a degree of choice and a little more power to determine their destiny. This is the reason why the world over the voucher idea is championed and fought for by poor and maginalised communities. They rich, whether they are in Mombassa or Mumbai, always find their way.

The resultant choice and competition working together provide universal access and higher quality of education to all. The dynamics introduced in the education sector by the voucher system would push schools to utilize capital better, invest in infrastructure and teachers, and actively seek to satisfy parents overall.

The choice of the parents would be limited by the amount of the voucher. They would not be able to access the elite private schools. But those schools are inaccessible even for the people with money; there are more people in the queue than the available seats in these schools. The lack of access by the voucher parents and by the richer parents reflects the overall scarcity of good schools. This scarcity is the result of our license-permit raj in education. Vouchers do not address this problem directly.

However vouchers do offer incentives to open new better quality schools to serve the voucher students. A few thousand students with vouchers in their hands of Rs 800 per month, the amount our cities spend in government schools per child, would encourage edupreneurs to open new or upgrade existing schools to meet the demands of the voucher students. So the voucher students may not be able to attend the existing elite private schools because the voucher amount might not be sufficient to cover their fees and also that there already more demand than the supply of such schools. But generous voucher amount would help create elite schools for the poor. That is genuine empowerment through vouchers.