Failure of Right to Education Act: Is it time to privatise education?

This was done repeatedly without a proper assessment of the scheme’s vulnerability to corruption and challenges to implementation. For all the grand pro-poor speak of the Congress leaders right from Indira to Rahul, it remains that decades of Indian socialism under the Congress has failed to provide a properly functioning public educational system.

If the goal of the RTE is to ensure that all children in India receive a proper education, then the current act will ensure the exact opposite. Let us understand the shortsightedness of the Act.

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First, the act doesn’t address the root of the problem in India. By some estimates, private schools attendance accounts for only about 30 per cent. So, 70 per cent of the country’s school students still depend on inadequate government schools – where teacher quality is abysmal, attendance is poor, infrastructure non-existent, and corruption rampant. The RTE does nothing to address this gaping and urgent problem.

Second, the RTE punishes success. Instead of spending resources and efforts on improving the delivery of public services, the UPA Act once again punishes private enterprise and pushes the burden of execution onto non-government run schools. Consider that private schools (charity, convent, minority, and religious schools) have been delivering good quality education at reasonable prices for decades. Behind almost all Indian entrepreneurial success stories lies some form of private schooling.

Under the RTE Act, these institutions are being forced to replace 25 per cent of their fee paying students with (essentially) free students. To make up for the loss in revenue, the school must either collect the difference from the remaining 75 per cent of parents (who may not be able to afford it), or because fee hikes are restricted by law in many Indian states, cut down on their curriculum and/or their quality of teachers. A 25 per cent budget cut would devastate any school and over time, many of these schools are being forced to shut down or are seeing drastic reductions in the quality of their output.

The RTE is riddled with poorly conceived conditions. A requirement for a minimum plot size of 2000 square meters, means that it is impossible to build small, affordable schools in slums or villages. The act’s insistence that all schools be officially “recognised” means that lakhs of small schools doing good work in poor areas are now illegal. And of course, the new layer of bureaucracy created to “inspect” the schools has become another source of corruption and extortion.

Finally, like all ruinous populist entitlement programs, it is based on an excellent and very politically marketable idea – that every child should have an equal right to a good education. Nobody can (or should) argue against this truism and as a result though the program is a failure on the ground, it would be political suicide for anyone to reverse.

So, what is the solution?

Thankfully, the current government does not share the previous regime’s reflexive distrust of private enterprise. In time, I hope that Modi’s government will recognise the failings of the RTE and work towards fixing the infrastructure through which education is delivered in India, rather than distracting us with a new tag line. Here are some suggestions on where to start.

Let us first accept that the underlying idea behind the RTE is a good one – the concept of underprivileged children attending private schools – but the execution is at fault. Common sense and strong economics should help us improve the Act’s intention.

Modi’s government must start by fixing its failing public school system, attended by around 70 per cent of Indian students. Without this, the government is simply abdicating its responsibilities. Even with limited resources, this can be done by first improving the monitoring of teachers and teaching standards and second, by regulating the financial management of the state school system. The current government has run on a proven platform of better governance, therefore, this should be within their ability.

Next, as a complement to the public system, education must be privatised. As we have seen in industries such as airlines, automobiles, and hotels, the private sector, if freed, will deliver products that work for all price ranges.

Currently, private schools face heavy and regressive regulation and are therefore concentrated in the high end of the market, where risk is lower. If these burdens are removed, and a simple set of quality standards implemented (like in automobiles), private players would create and offer products for an increasingly wider range of students, covering the entire range of the market that is financially viable.

Of course, for the poorest students, it would be impossible to provide a financially viable private education. Here, a government “voucher” system could be put in place that would work as follows: All ‘below-poverty-line’ students would receive a voucher to be used in lieu of fees at any designated government school or ‘low-cost’ private school of the parents’ choosing. The institution would receive a fixed payment per voucher from the government, which would be set at a level that makes the schools financially viable. Since the parents could move with ease from one school to another, competition would ensure that schools are forced to maintain quality and standards. It is highly probable that the cost per voucher would be less than what the government would spend to run its own schools.

The 25 per cent reservation in private schools should be retained, but the government must compensate the schools for the actual revenue lost, which can be easily done through a modification to the same voucher program mentioned above. This allows the best schools to maintain their standards while achieving the goal of social inclusion.

The education of India’s next generation is far too important a priority to leave to the mercy of a poorly thought out, and hastily drafted Act. Modi’s government needs to replace the RTE with a new Act, worthy of its’ practical and pro-free market reputation.