Over the years, India has aspired to provide education to every child in the age group of 6-14. Sadly, as some recent surveys and data show, there is a huge gap between aspirations and actual achievements. This gap can only be filled by encouraging private involvement over and above reforming government schools.

State of elementary education in India

Universal Elementary Education is constitutionally a fundamental right in India. The Union government passed the Right to Education Act (RTE) last year making this right legally binding. The Act is a great statement of intention but lacks the understanding of Indian realities and the courage to deal with them forthrightly. The fundamental flaw is the focus on inputs—school infrastructure, teacher qualifications and training, teaching aids—and none at all on the outcomes. Despite the consensus that the biggest challenge for all government schemes is the accountability for the outcomes, the Act simply ignores the issue of learning achievements of students. It guarantees schooling but not education.

As is well documented, the state of government schools in India is abysmal. It is true that the enrolment rate of close to 95 percent but it is also true that 34 percent of these children do not reach grade 5 and of those that do, 52 percent can’t read to the level of grade 2. Since a majority of children in India study in government schools improving them immediately is an imperative. Concerted efforts are necessary to improve the quality of education not only through greater transparency and accountability in schools but also through performance-based incentives and grants. The policy focus must shift from increasing inputs to improving outcomes. Parents must be empowered and given more voice in the system. School Management Committees need to be provided with greater pedagogical and operational autonomy. Given that an average of 25 percent of teachers are absent from the school at any given point and almost half of those who are present are not engaged in teaching activity, it is necessary to reform the teacher accountability and incentive structures. Instead of hiring teachers at the state level, let them be hired by local governments and schools directly, and teachers made answerable to School Management Committees.

Unfortunately many intellectuals, educationists and policy-makers believe that expanding the government system in itself, with some tinkering, is the necessary and sufficient condition for achieving universal quality education. They believe that since the government is responsible for education, schools have to be built, owned and operated by the government. They do not realise that it does not matter to parents and children where they get quality education from, as long as they do.

The rapid expansion of private schools

Tired of teacher absenteeism and lack of accountability in government schools, both the rich and the poor are increasingly rejecting free government schools and choosing to pay for education in fee-charging private schools. The Annual Status of Education Report (ASER) 2009 shows that close to 22 percent of children in rural India attend private schools. This number is much higher in urban areas. In the metros, at least half of the children are in private schools and in states like Punjab and Haryana, 70 percent are in non-state schools. More than a third of India’s children, a conservative estimate, now study in private schools and that the number is rising by the day.

So how is it that the poor can afford these private schools? Most of these children study, not in elite schools, but in budget private schools in poor neighbourhoods. These schools, some recognised and some not, charge an average monthly fee of Rs 70-150 in rural areas, and up to Rs 350 even in highly expensive metros. Budget private schools are the fastest growing segment in India’s education eco-system.

The government must recognise this silent revolution and support the choices of the poor even if that means supporting private schools. Private schools not only provide better education but they also do it in a more cost-effective manner than government schools. Also, private schools are accountable and responsive to parents: for example, they offer English-medium schooling that parents prefer.

Studies by Geeta Kingdon, James Tooley and ASER 2009 all suggest that private schools indeed provide better education. Though there is a variance in quality, it has been proven time and again that private schools provide better language and numeric skills even when adjusted for socio-economic and educational backgrounds of students and parents. In fact, according to ASER 2009 private school students have a 41 percent advantage in English than government school students.

As for the cost-effectiveness, there is hardly any debate. It has been widely established by researchers from across India—such as S M Kansal for Delhi, S C Jain for Gujarat, R Govinda and N V Varghese for Madhya Pradesh and Geeta Kingdon for Uttar Pradesh—that per-pupil expenditure in budget private schools is vastly below that of state schools specially in light of the difference in the salary of teachers. Research suggests that salaries of teachers in private unaided schools are four to seven times lower than that of government schools. Private schools provide relatively better quality education at a much cheaper cost. How should government respond to this reality?

Encouraging edupreneurs: liberalisation, decentralisation and vouchers

Recognising the potential of the private sector, the government has started making efforts to shift education discourse in favour of private involvement. The government has announced creation of 6000 model schools of which 2500 are to be built under the public-private partnership (PPP) model.

Even though PPPs in building, managing and running schools are important, it is equally, if not more important, to create an eco-system conducive to spontaneous private involvement. The current licensing and regulatory restrictions in the education sector discourage well-intentioned ‘edupreneurs’ from opening more schools. Starting a school in Delhi, for instance, is a mind-numbing, expensive and time-consuming task which requires clearances from four different departments totalling more than 30 licenses. The need for deregulation is obvious.

The legal requirement that all schools should be non-profit is anachronistic. The experience of other countries suggests that even when for-profit schools are legal, most do run on a non-profit basis. Addressing a challenge of a scale, importance and immediacy as education, India needs to attract as much capital and as many entrepreneurs as possible.

A simple change in the current system of education financing would increase accountability: Fund students, not schools. This means that the school that the parents and students choose gets the funding, whether private or government. The government fixes an amount per student that it wants to spend and transfer funds to schools in relation to the number of students enrolled in the school. Instead of current lump-sum funding, the state schools would receive their grant depending on the number of students they attract and retain.

Under this ‘Student First’ system of financing, all schools will compete for all children, rich and poor, and all schools will be accountable to all parents, rich and poor. This would enhance parental choice which would further healthy competition between schools and improve their quality.

School vouchers are a method of introducing per student system of education funding. Vouchers have been implemented in a variety of countries like Sweden, Chile, Columbia, Bangladesh, the United States and United Kingdom with varying levels of success. Like any good policy idea, it is imperative to test it by first conducting pilot projects. To test the applicability of vouchers in the context of India’s educational infrastructure, poverty, corruption and bureaucracy, voucher pilots have been conducted in Delhi, Andhra Pradesh, Uttarakhand and Madhya Pradesh by government and independent organisations. Preliminary findings indicate that vouchers are in fact a viable option for financing education delivery. (Full disclosure: The Centre for Civil Society conducts two voucher pilots in Delhi.)

With the RTE Act, the government has unwittingly announced the world’s largest voucher programme. The RTE Act reserves 25 percent of the seats in all private schools for government-sponsored students from economically and socially disadvantaged families. The government will reimburse these private schools to the extent of per-child expenditure incurred by the state, or the actual school fees, whichever is lower. This provision can enable close to 2 million poor students to access better quality private schools. The conditions for success are: a proper implementation system that allows a fair selection process, a transparent and leak-proof payment mechanism, proper monitoring and evaluation, and the smooth social integration of these students.

On the one hand, the RTE Act supports private education but on the other, it restricts it by demanding closure of private ‘unrecognised’ schools that do not adhere to regulatory norms within three years. Budget private schools for the poor cannot pay teachers at the government salary scale and those in slum areas cannot have large playgrounds and libraries. Instead of closing unrecognised schools down it will be better to adopt a ‘graded recognition system’. This will involve accrediting and recognising schools through a credible affiliation board, conducting independent performance assessments and assisting them by linking them to formal financing institutions. A new rating system could adopt three levels to assess the facilities and performance of a school. These standards can help improve quality by incentivising schools to acquire higher standards and also educate parents on the level and performance of each school.

It is beyond doubt that private involvement is essential for the achievement of quality universal elementary education in India. The time has come to embrace the possibility of a world where government and private schools co-exist, complement each other, as well as compete to attract and retain all children under an equitable and transparent regulatory system.