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The far-reaching Right To Education
Act, now in its fourth year of implementation, obliges the central
and state governments to provide eight years of free and
compulsory education to all children between 6 and 14 years of
age. But the country is a long way from achieving that goal. India
has always been a land of extreme dichotomies and the most extreme
is that while the country is aspiring to become an economic
superpower, it has an education system that is failing generations
of children.
Most worryingly, the education being delivered to those in schools
is well below global par, while the percentage of school dropouts
is conversely above global par. The government, civil society and
the private sector thus need to work together to educate Indian
youth.
Nearly 540 million Indians are under the age of 25 years. The
labour force is expected to grow by 32 percent over the next 20
years, whereas it will decline by four percent in industrialised
countries and by nearly five percent in China. India's favourable
demographic profile can add significantly to its economic-growth
potential for the next three decades, provided that its young
people are educated and trained properly.
India also has one of the largest higher-education systems in the
world and ranks second in terms of student enrolment. But while
the country has 621 universities and 33,500 colleges, only a few
are world-class institutions. The gross enrolment ratio (GER) of
18.8 per cent in 2011 is also less than the world average of 26
per cent. The need for education reform, therefore, has never been
clearer.
Global experiences indicate a positive correlation between GER and
economic growth in a country and point to the need for a minimum
of 30 percent to sustain economic growth. Still, India's spends
only 1.2 percent of its gross domestic product (GDP) on higher
education, compared to 3.1 percent in the US or 2.4 percent in
South Korea.
India's ambitions for the 21st century seem unlikely to be
fulfilled without the country taking real steps to fix the
education system in very short term. No doubt there are clear
improvements in the education system - in particular at the
elementary level, where the government's Sarva Shiksha Abhiyan
initiative has seen huge increases in primary enrolment, along
with the various mid-day meal schemes, which attract poorer
sections of the population.
But this or even overall increases in literacy are far from
sufficient to prepare young people for productive employment. A
fast-growing economy needs young people to be educated in such a
way that they can make responsible life choices, get the right
jobs and lead communities towards positive change. The fundamental
and troubling question is: How will India's millions be educated?
The government closely guards the Indian education sector while
the judiciary has given it a very loosely defined not-for-profit
tag. Accordingly, investments need to be carefully structured so
that they cannot be construed as profiteering from students.
While there is a clear recognition that private and
non-governmental funding of education is needed, there is lack of
clarity on the form that acceptable financial returns from this
sector might take.
The current legal and regulatory framework does provide
opportunities for joint ventures between foreign educational
institutes and Indian institutions in the K12 (kindergarten-12th
grade) segment, higher education institutions (HEI) and non-formal
institutions (NFI). Among them, the NFI segment is particularly
suited for foreign investment and strategic alliances. It operates
outside the regulatory constraints on foreign investment in many
cases.
Although 100 percent foreign direct investment through automatic
route is permitted in the education sector, the present legal
structure in India does not allow the grant of degrees by foreign
educational institutions, thereby restricting independent
operations by foreign players.
The government has therefore introduced several important bills in
parliament relating to accreditation, foreign universities,
educational tribunals and unfair practices to completely
restructure the legal and regulatory environment of higher
education. There is also a growing recognition within the Indian
government that the demand-supply gap in the education sector has
to be bridged through opening up participation from private,
non-governmental and international players. But political
opposition has stalled the legislative progress of some of these
measures.
While regulatory changes are long overdue, there is a lot that can
be done within the existing structure and regulation of education
in the country. Besides, the main gap is that of translating plans
into action and making projects operational.
Early stage tax and regulatory advice is a must so that such
pitfalls can be worked through in an investor-friendly manner. The
real issue is one of quality and this permeates every layer of
education from primary to higher.
India can benefit from building stronger bridges to global centres
of educational excellence. There is also a real global interest in
making a success of Indian education. The country must be one of
the leaders of the 21st century's knowledge economy.
Big businesses need to realise that government control over
education is receding. They must search for their place in a
sector that has the potential to attract $100 billion in
investment over the next five years. Businesses also will have to
keep in mind the market incentive to invest in education towards
change. In a multi-stakeholder approach, businesses can partner
with non-profit organisations for creative ideas, and with
governments for scale and experience.
The challenges are no doubt enormous. There are children from
families too poor to think about education, beyond the reach of
schooling and too malnourished to study. There are too few
schools, classrooms, teaching resources and adequately trained
teachers. Rampant illiteracy underpins other problems including
exploding populations, gender imbalances and poverty. But it is
for the government is to ensure that appropriate policies are
framed and meticulously implemented to meet the future aspirations
of India's youth.
The authors are partners at The Hearth Education
Advisors, a specialised advisory firm focussed on improving the
delivery of education. The views expressed are personal. Shashank
Vira can be reached at shashank@thehearthadvisors.com and Mark
Runacres at mark@thehearthadvisors.com
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