Monday, March 27, 2006

Public Funds for Private Schools

The SC/ST Tuition Fee Reimbursement Scheme

Delhi’s private schools have been widely documented as providing better quality education than government schools. But the cost differential between private and government schools has resulted in the majority of poor students, a large number of them belonging to the SC/ST community, going to poorly performing government schools. In 2004-2005 only 5.6% of Delhi’s SC/ST students were enrolled in private schools. The Delhi government’s SC/ST Tuition Fee Reimbursement Scheme aims to increase the enrolment of SC/ST students in private schools. But like most other government run schemes it represents a case of flawed policy design and therefore very limited success despite no shortage of available public funds.

The scheme was introduced in 2003-2004. It applies to SC and ST students of Delhi who are enrolled in recognized private schools and who have an annual family income of less than Rs. 1 lakh. It provides a 100% reimbursement of the tuition fees, sports fee, science fee, lab fee, admission fee and the co-curricular fee if the student’s annual family income falls below Rs. 48, 000 and a reimbursement of 75% if the annual family income exceeds Rs. 48, 000 but falls short of Rs. 1 lakh. In 2003-2004 the scheme had an approved outlay of Rs. 50.00 lakhs. However, only Rs. 5.93 lakhs was utilized to benefit 98 students. In 2004-2005 the total outlay was scaled down to Rs. 25 lakhs. However, only Rs. 14.37 lakhs was utilized leaving a surplus of Rs. 10.63 lakhs. The number of beneficiaries stood at 254.

These figures reflect very poorly on the outcomes of a scheme whose benefits constitute up to 85% of the total payable fees for most of Delhi’s private schools.

Given the organization of education in private schools the scheme’s design is flawed because it fails to draw those students who are not already studying in private schools into the pool of beneficiaries. Private schools admit new students in the nursery standard whereas benefits from the scheme begin to accrue only from standard 1 onwards. Thus, poor students constituting the scheme’s potential pool of beneficiaries cannot afford to seek admission in private schools when admissions are open. When the subsidy becomes available from standard 1 onwards, getting admission is very difficult owing to the limited number of vacant seats.

Article 21A of the Constitution, which declares free and compulsory education to be a fundamental right does not include children below the age of six years. The state has as much of a responsibility towards these children as towards those in the 6 to 14 years age group. They must be brought into the fold. Once this is done, the scheme ought to be remodelled by introducing benefits from the nursery class onwards. Although non-reimbursable fees like building fund, development fund etc. will continue to limit the entry of poor students to some expensive private schools, the poor parent’s choice will be widened with respect to the several less expensive private schools.

The scheme’s implementation should also be simplified. Presently, implementation entails a differentiation between the reimbursable and the non-reimbursable components of the fees. The differentiation is ambiguous and the decision is often left to the discretion of government officials. This arbitrariness in processing applications can be corrected by fixing an upper and lower limit for reimbursement. The upper limit, for instance, may be Rs.900, given that for both 2003-2004 and 2004-2005, 92% of the beneficiaries came from schools with an average monthly fee less than Rs. 1000. The lower limit may be represented by the tuition fees of the school. This standardises the application procedure while also leaving a larger sum of money with the government to benefit far many number of students.

Access to private schools will also be facilitated if the benefits accrue before the payment of the fees rather than after it. Presently, the beneficiary gets the reimbursement only after paying the fees and presenting the original fee- receipt to the concerned government department. Consequently he is often forced to wait till the last quarter of the academic year to get benefits. The point of time at which benefits accrue is an important determinant of the choice between non-free private schools and free government schools for households with meagre resources.

The tuition-fee reimbursement scheme bears the potential of improving poor people’s access to schools traditionally meant for the rich and middle classes. It promises to do this without limiting the autonomy of private schools. However, unless it is remodelled it may end up benefiting only a narrow section of SC/ST students already enrolled in private schools rather than expanding its reach to the several potential beneficiaries seeking admission in these schools.

The author is a Research Assistant with the Centre for Civil Society. The article is based on a research paper of the same title. Source:

Thursday, March 23, 2006

Who owns water??
The world water summit is currently held in Mexico. There are contradictory reports on the availability of the clean drinking water in the decades to come. During eighties and ninties, the policy was based on the privatisation of drinking water. By privatising the water resources, it was estimated that the scracity and opertaional probelems can be solved. With the dawn of a new century, there is a rethought on this issue. Many of the private companies had to withdraw from the scene due to various reasons. Even the privatisation is not a solution to the drinking water scarcity. It was found that only with the cooperative movement of local citizens, a viable solution can be found out. In India, the half of the population is still lack the sanitation facilties. But in a socilalistic country like ours, the public enterprises also failed to chnage the situation. Most of the times, the Government dictates the ground water usage. Who gave the rights to the Government to sell the ground water to Coco Cola comapany at Plachimada, Palaghat? You and me own the land, of course; but who has the right to decide on the ground water use in my land???

Saturday, March 11, 2006

The subsidy regime

One of the recent report says that if we calculate the total subsidy raj in this country, it is more than One Lakh Crores of rupees. If we look at the census data of this country, the poor accounts 27% of the total population. If we assume our population is 110 crores, the poor men population of this country staggers at 33 crores. The subsidies are meant for the poor people. So if we divide the total money budgeted under the subsidy system with the poor people of this country, what is the amount one should receive under the subsidy raj? If we forget for a moment that there is no Government buraeucracy and the money is directly given to the poor section of this country, I dare, next Forbes' list may have many more Indians!!!!!!!!!!!!!

Saturday, March 04, 2006

The Mess in Education

By Ajay Shah / Business Standard / February 28, 2006

Putting educationists in charge of education policy is much like putting the DoT in charge of telecom policy.

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. It is not like (say) national security, where the State builds an army and everyone benefits from being safer. In household surveys, the poorest quartile of Indian families spends a big chunk of their income on education for their children. This reflects the private benefits of education.

Unlike difficult industries like telecom, there are no network externalities in education. The only complexity in education is that while the student captures much benefit, a part of the benefit spills over onto society. This can justify some expenditure of public funds on education.

The choices for education policy fall into five alternative frameworks. The first is “Do Nothing”—where the State stays out of teaching. There is still a role for the State in curriculum development and running tests.

In the second framework, “Augment Purchase”, the State gives money to citizens to buy more educational services. This can be scholarships or education vouchers. Here, the private sector produces educational services. However, the State thinks that some of the benefits of an educated child spill over to society at large, so the State augments the purchase of education services by parents.

The burden of choice of educationist is then put on parents, who are well motivated to care for the interests of their children. As an example, the unique rise of coaching classes in India reflects the dissatisfaction of parents with the educational outcomes being produced through schools on the bottom line, which is test scores. Private schools are better held accountable by parents in outcomes. Hence, India has built up a big private sector in education, ranging from private schools and coaching classes to NIIT and private colleges. The children of CPI(M) leaders go to private schools and attend private coaching classes, in an endeavour to perform at tests.

The third framework is “State Production But Do No Harm”. Here, the State tries to produce educational services. But at the same time, it does not do damage to private schools. Now parents face a choice between free public schools versus unfree private schools. This is roughly the approach of the Sarva Shiksha Abhiyan (SSA), which might more accurately be termed “Sarkari Shiksha Abhiyan”. SSA does not set out to solve the problem of education; it sets out to send more money into State production of educational services.

Free schooling from a government school competing against unfree schooling from a private school is perhaps like a situation where BSNL drops rates to zero. This is not fair competition. But more importantly, this may or may not be an efficient way to achieve our goals. We have to be clear on whether we want educated children or we want to keep government schools in business. As the recent Pratham data have demonstrated, while SSA has done well on getting children into school, they don’t seem to learn much!

The fourth framework is “State Production While Damaging the Private Sector”. Here, the State is not content with unfair competition, but tries to simultaneously wreak damage on private producers. As an example, the State now wants to force private schools to take on a quota of students prescribed by politicians. This is analogous to the State forcing private telecom companies to take on customers prescribed by politicians. In many situations, the State makes it difficult for students in private schools to appear in board exams.

Finally, the fifth framework is “Ban Private Participation”. This is like the old DoT approach to telecom. In education, today, it is essentially impossible for a private party to start a university.

India faces a choice between these five frameworks on education policy: between (I) Do Nothing, (II) Augment Purchase, (III) State Production But Do No Harm, (IV) State Production While Damaging the Private Sector and (V) Ban Private Participation. We started out with a small public sector education system and were drifting into I—do nothing. Then came SSA and we took a big plunge into III—State production but do no harm. Now we seem to be deteriorating further into IV—damage the private sector. All along, we have had a slice of V—ban private participation—through steep entry barriers in higher education.

The single key idea that needs to be brought to bear on education policy is loyalty to students and not to educationists. The purpose of education is to achieve educated children. Educated children are those with functional skills: they can perform in tests. All else is a means to that end—whether it is enrolment rates or “joy of learning” or mid-day meal programmes. All questions on education policy should be judged by the extent to which they can deliver higher scores on internationally standardised tests for the average 15-year-old in India. In this case, taking the private sector seriously is inescapable.

The SSA mentality, and the recent law-making efforts of the political class, are not consistent with the interests of students. The money spent on SSA will give better results if it is rooted in sound thinking about education. Our quest should be to strengthen the purchasing power of poor parents, to strengthen the information available to them about alternative schools and to increase competition between schools. As an example, the State can collect information on the performance at tests of all students of all schools, and release newspaper advertisements with a ranking of schools on scores in international standardised tests. This would help parents choose better. The State should build public transport systems, which brings a bigger range of schools within the choice set of parents, and thus increases competition between schools.

Putting educationists in charge of education policy is much like putting the DoT in charge of telecom policy. It is not surprising that we have profound policy blunders as a consequence. Telecom obtained a breakthrough in 1999, when control of telecom policy was wrested away from the DoT. In similar fashion, the path to sound policies on education requires a radical break from the vested interests of the existing providers.