This is an archive article published on October 24, 2000
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Missing the school bus

The biggest failure of the Indian State after independence has perhaps been its failure to invest in its biggest asset: Human beings. The ...

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Written by: Dhiraj Nayyar
4 min readOct 24, 2000 12:00 AM IST First published on: Oct 24, 2000 at 12:00 AM IST

The biggest failure of the Indian State after independence has perhaps been its failure to invest in its biggest asset: Human beings. The era ofeconomic reforms has done little, if anything, to correct this failure andthe results are there for all to see. Even today only a little over 60per cent of India’s population is literate, with a lot fewer being educated.

There are four problems here. First, an expenditure on education of 3 per cent of GDP is insufficient. India needs to allocate at least 6 per cent, if not more.

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The second problem is the allocation of resources between higher educationand primary education. The state spends far too much on higher education and relatively less on primary education. Though the allocation for primary education has been rising it still remains only 40 per cent of the total expenditure on education. Yet, the social rate of return to primary education is much higher than the private rate, which would necessitate public investment. On the other hand, the private rate of return is higher for higher education and hence private funding should be encouraged.

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