The research combines newly created data on per-student government expenditure on children in government elementary schools across India, data on per-student expenditure by households on students attending private elementary schools, and the ASER measure of learning achievement of students in rural areas.
According to the study authors, the combination of these three sources allows them to compare the “accounting cost” difference of public and private schools, as also the “economic cost” — what it would take public schools, at their existing efficacy in producing learning, to achieve the learning results of the private sector.
The researchers estimate that the “accounting cost” per student in a government school in the median state in 2011/12 was Rs 14,615, while the median child in a private school cost Rs 5,961. Thus, according to the results of the study, in the typical Indian state, educating a student in a government school costs more than twice as much as in a private school -— a gap of Rs 7,906.
Just these accounting cost gaps, aggregated state by state, suggests an annual excess of public over private cost of children enrolled in government schools of Rs 50,000 crore — or 0.6 per cent of GDP.
But even that staggering estimate does not account for the observed learning differentials between public and private. The researchers produce a measure of inefficiency that combines both the excess accounting cost and a money metric estimate of the cost of the inefficacy of lower learning achievement. This measure is the cost at which government schools would be predicted to reach the learning levels of the private sector. Combining the calculations of accounting cost differentials plus the cost of reaching the higher levels of learning observed in the private sector state by state (as both accounting cost differences and learning differences vary widely across states) implies that the excess cost of achieving the existing private learning levels at public sector costs is Rs 2,32,000 crore (2.78 per cent of GDP).
— ADAPTED FROM ABSTRACT