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Education: Government Vs The Market


With the Right to Education Act, education becomes a fundamental right in India. The Act makes education free and compulsory for all children in the age range of 6-14. The Act stipulates educational standards for private educational institutions, and threatens to shut down schools which don’t meet those regulations. The Act, in short prevents children from families of limited means from accessing quality private education.

This paper covers various aspects of education like the Government education budget, Status of education in India and Mid-Day Meal scheme. The problems of faculty shortage and drop-out rate are also highlighted. The concept of positive rights is rejected as it invalidates the only valid concept of rights-Negative rights. A case is made against national standards in curriculum, which impedes innovation and infringes the personal freedom of private schools.

It was found that private unrecognized schools in the slums of various cities in India perform much better than Government run schools in imparting education to children of the poor. The myth that leftist politics is the reason for the high literacy rate in Kerala is also demolished. The facts are quite the contrary. Kerala has the highest proportion of private management schools in India and less Government interference in many ways. The notion that private schools are elitist and cater only to the rich is also rejected. No empirical evidence was available which suggests so. On the contrary, most of the private unrecognized schools cater to the poor, and it includes even slum children, and impart better quality education than Government run schools.

This paper explains why private schools perform better than Government run schools. The reasons are various- Competition, lack of political interference and unions, harmony of interests, accountability, incentive system and free flow of information. The Government schools fail precisely for the absence of these factors. The school voucher plan too is opposed, for several reasons, the most important being that it is an income redistribution scheme and would lead to more government interference in education.

Right To Education Act (RTE)

Education became a fundamental right in India on April 1st, when Right to Education Act (RTE) came into effect. According to the act, all children from the age 6 to 14 will have a right to free and compulsory education. Children shall not be liable to pay any fee which would prevent them from accessing free elementary education. Standards for training of teachers would be enforced, which might lead to many private schools raising their fee many times. Schools won’t be allowed to charge any capitation fee or make students go through a screening procedure. If schools make use of a screening procedure, they will be charged twenty five thousand Rupees for the first contravention and fifty thousand Rupees for each subsequent contravention.  Such regulations would further strangulate the private educational institutions which provide quality primary education within their limits.

Children should be promoted compulsorily, and education can’t be denied as of a lack of age proof, violating the right of private educational institutions to discriminate. The only good part of the act is that physical punishment and mental harassment of children would be punished. However, the Act evades the fact that children from low income families are more likely to be punished in Government schools. There is no such relationship in private schools. Schools running without certificates of recognition, or after withdrawal of certificate of recognition shall be liable to a fine of 1 lakh Rupees and 10,000 rupees for each day if the contravention continues. The Act also stipulates minimum qualifications for teachers, and those lacking such qualifications are supposed to acquire them in five years. Teachers should not engage themselves in private tuitions. The curriculum for elementary education would be laid by an academic authority. Children are not required to pass any board exam till the completion of elementary education. Elementary education will be in the mother tongue, as far as possible.

A School Management Committees (SMCs) comprising local authority officials, parents, guardians and teachers should be formed. The school environment and utilization of Government grants will be monitored by the SMC’s. The 50% of the SMC’s would be women and parents of children from disadvantaged groups. There will be separate toilet facilities for girls and boys. The fact that private schools in general are more likely to electricity connections, better toilet facilities for girls and boys too is ignored. Teachers should attend classes regularly and hold parent-teacher meetings regularly. There will be specific provisions for disadvantaged groups, such as child laborers, migrant children, children with special needs.

If the Act comes into effect, lakhs of unrecognized schools would be shut down, or forced to get recognized. These schools serve the poor, and provide better education than Government schools do. The reason put forward to shut down these schools is that they are of poor quality, and doesn’t meet certain costly Government standards. If these schools meet the Government standards, they would have to raise their fee many times, which wouldn’t serve any good purpose. Private schools would be forced to admit 25% of the children from weaker sections of the society. According to Kingdon, “This scheme does not give all students an equal choice of access to private schools and it can be expected to lead to long queues at private schools by hopeful poor parents that their child will be chosen.”

The Homeschooling Alternative

The Compulsory education Act will be a heavy blow to parents who wish to home school their children.(Homeschooling is a mode of education in which children are educated at home with the help of parents or private tutors, rather than in a school, private or public.) As an economist perceptively noted, “Another powerful argument against compulsory education, one which is generally overlooked, is that, if instruction is compulsory, and the parent cannot afford to send his children to a private school or tutor, and is prevented from instructing the children himself, he must send his child to a public school. In the public school will be most of the others who would not be there were it not for the universal compulsory law. This includes subnormal, uneducable children, and various types of juvenile delinquents and hoodlums. Whereas the parent would prefer not to send the child to formal schooling, rather than to compel him to associate with these vicious types, the State forces him to do so, with incalculably evil consequences to innocent children. Removed for part of the day from the care and supervision of the parent, the child is compelled to associate with vicious companions, and might even be influenced by them to join juvenile gangs, adopt drug addiction, etc. These are not exaggerated evils, as any reader of the current press knows, but, true to the common hatred of individual superiority and distinction, the passion for leveling an enforced equality proclaims: this is good; let every child be forced to learn about “life” and be forced to associate with the lowest types of humanity.”

As Psychologist Bronfenbrenner pointed out, subjecting children to the daily routine of elementary school can result in excessive dependence on peers. John Holt puts it this way, “To return once more to compulsory school in its barest form, you will surely agree that if the government told you that on one hundred and eighty days of the year, for six or more hours a day, you had to be at a particular place, and there do whatever people told you to do, you would feel that this was a gross violation of your civil liberties.” Benjamin Franklin, Thomas Jefferson, Thomas Alva Edison, John Stuart Mill, Isabel Paterson, Rose Wilder Lane and most of the Founding fathers in America had one thing in common. They all had very little formal education, and some of them didn’t even attend school. Formalized education of this sort, according to Jack D. Douglas, “can teach the rudiments to millions, but it kills the spirit of learning–the passionately curious rage to know that is the beginning of all creative education and enterprise.”

Government Education Budget

The central government spends 65.6% of its total education budget of Rs. 438250 million on elementary education.  9.9% is spent on secondary education, 9.5% on higher education, 10.7% on technical education and the rest on adult education and other schemes. The amount spent is less than 3% of the GDP, and in total, 10% of government spending. Interestingly, private schools teach students at a fraction of the cost (per pupil) of public schools and produce superior results (Tooley and Dixon 2005, The Economist).

The National Common Minimum Programme (NCMP) of the United Progressive Alliance (UPA) government wants to “progressively increase expenditure on education to around 6 percent of GDP and to support this increase in expenditure on education, and to increase the quality of education, there would be an imposition of an education cess over all central government taxes.” There was a slight decline in the public spending on education, as a part of the GDP in the recent past. It has also declined as a proportion of the total expenditure. In the year, 2008-2009, however, there was a twenty percent hike education budget for India education development. In 2010, there was an increase of over Rs.5,600 crore from the previous fiscal year. There will be an increase of 16 percent in school education expenditure in the coming fiscal. Rs.11,000 crore was allocated for the higher education sector.

Elementary Education Rs 287500 Million (65.6%)
Secondary Education Rs 43250 Million (9.9%)
Adult Education Rs 12500 Million (2.9%)
Higher Education Rs 41765 Million (9.5%)
Technical Education Rs 47000 Million (10.7%)
Miscellaneous Schemes Rs 6235 Million (1.4%)
Total Rs 438250 Million

The Status of Education in India

India has made huge progress in education in the recent past. Much of the progress in education in India in the past few decades is due to private educational institutions. Yet, one third of Indians are illiterate and only 15% of the children who join 1st grade reach high school. Nearly 14 million children are said to be out of school, but it is very likely that these figures are exaggerated. According to ASER, 35% of children aged 7-14 could not read a simple paragraph at grade two level, and 60% of the students can’t read a simple story. The results of such tests were worse than expected in Tamilnadu and Gujarat, and higher than the expectations in Bihar and Chhattisgarh. According to Government census, “In nearly 60% of schools, there are less than two teachers to teach Classes I to V. On an average, there are less than three teachers per primary school. They have to manage classes from I to V every day. More than 50 per cent of girls fail to enroll in school; those that do are likely to drop out by the age of 12.”

This is a huge improvement, however when we consider the past. A century back, only 5% of the people were literate, which rose to 16% half a century back. In 2001, it was found that two-thirds of the population was literate, of which, three-fourths are male, and more than half females. The literacy rate has gone up by 13% in the decade after the opening up of the economy. A growth of such a rate was unprecedented in India’s history. The gender gap in the drop out rate too has come down.

There are three types of educational institutions in India-Government, Government aided and private. Among private schools, there are recognized and unrecognized schools. Data regarding school enrollment is not easily available for several reasons including that the Government statistics doesn’t take into account children studying in unrecognized private schools. Even the data on enrollment in public schools is not complete as they are made up by the authorities to prove the viability of such schools. Things are more complicated as of the unavailability of state or district level data. The enrollment in public schools is largely exaggerated and the role of private educational institutions in imparting high quality education is grossly understated.  The real intentions behind it are to exaggerate the contribution of Government to education. The private primary schooling sector is growing very fast. The private sector is the main cause of the huge improvement in educational achievements in the recent past. Private schools score high on pass rate and aggregate percentage marks.

There was also a large decline in the drop out rate not just in primary sector, but also in the secondary and higher education, after the 90’s. It is even more pronounced among the scheduled castes and tribes. There was also an increase in the number of teachers. However, there isn’t much improvement in the pupil-teacher ratio. Female participation is teaching too has improved. The participation of girls and scheduled castes and tribes in secondary education too has increased.

The Economist reported that 50% of 10-year-old rural children could not read at a basic level, over 60% were unable to do division, and half dropped out by the age 14. It was found that 59% of the schools had no drinking water and 89% had no toilets. Only 10% of the young have access to tertiary education, and it is estimated that only one-fourth of the graduates are employable. 80% of the recognized schools are either Government run or Government supported. Private schools often operate illegally, and the Government puts various stumbling blocks in front of private educational institutions.

Year Literacy
1951 18.33%
1961 28.30%
1971 34.45%
1981 43.57%
1991 52.21%
2001 64.84%
Educational Institutions Students
Primary (grades 1-5, 5 yrs.) 123,433,200
Secondary (grades 6-10, 5 yrs.) 120,347,370
Intermediate (grades 11-12, 2 yrs.) 21,086,505
Undergraduate (3 yrs.) 15,686,303
Post-graduate (2 yrs.) 18,514,980
Professional courses (4-5 yrs.) 15,686,303
Total 314,754,660

Mid-Day Meal Scheme

According to the Mid-Day Meal Scheme,(Initiated in 1995) the Indian Government provides free lunch to all school children on all working days. Alleviation of hunger, enhancing enrolment in school, retention, improving nutrition status and socialization of children were the supposed reasons behind the implementation of the Mid-Day Meal Scheme.

In 2009, 8,23,90,147 primary school children and 3,50,42,987 upper primary school children were covered in the Mid-Day Meal Scheme. The number of states providing cooked food to students in the last few years has gone up sharply. It is estimated that the figures of the students being provided cooked meals will go up to eighteen crore. It is said that the scheme will foster “social equality”, “gender equity” and would lead to psychological benefits. It is also claimed that the scheme was a huge success in attracting students to school, and in many other related ways.

Child hunger is still a problem. According to India State Hunger Index (ISHI), “India is home to the world’s largest food insecure population, with more than 200 million people who are hungry. The country’s poor performance is driven by its high levels of child under-nutrition and poor calorie count. Its rate of child malnutrition is higher than most countries in Sub-Saharan Africa.” India was ranked 66 of 88 in a report of the 2008 Global Hunger Index.

The Scheme, not surprisingly, is not without problems opening up new avenues for corruption. A scam was found by the Delhi police in 2006. Misappropriation of eight truckloads (2,760 sacks) of rice meant for primary schoolchildren was unearthed by the Police in 2005. An UP-based NGO, Bharatiya Manav Kalyan Parishad (BMKP) was found siphoning off rice. In 2006, the residents of Pembong village accused some teachers of embezzling mid-day meals. Another such embezzlement scam was exposed by Times of India in the same year.

Faculty shortage

Most institutions have a shortage of faculty, and the quality of education is abysmal. The problem of shortage of faculty is more serious in the case of higher education. The shortage is around 67% when we take the country as a whole. The introduction of quotas in higher education has exacerbated the problem. The UN Rao committee has pointed out that there is a shortage of 60, 870 teachers in Indian engineering institutions. At the Indian Institutes of Technology, at present, 29% of the teaching positions remain unfilled. The Indian Institutes of Management and other management institutions face a shortage of faculty. It is estimated that the Quotas for Other Backward Castes will result in a faculty shortage of 5000 for central universities.

The shortage of qualified teachers will be a big problem in the implementation of the Right to Education act (RTE). There is a shortage of around five hundred thousand teachers. There are about three hundred thousand untrained teachers at elementary stage. The right to education act says that there should be one teacher for every thirty students, which adds up to the problem. In the 1.29 million recognized elementary schools in the country, there are nearly seven hundred thousand teachers. Of these teachers nearly three hundred thousand teachers are not adequately trained. Schools run by the Delhi government itself have a shortage of over 200 principals and 600 vice-principals. Almost all the states face this problem, especially Bihar, Chhattisgarh, Jharkhand, Orissa, West Bengal and Uttar Pradesh and some of the North Eastern States. These states don’t have the necessary funds to implement this act and will have to seek the aid of the central Government. The state of Bihar itself needs 3.30 Lakh additional teachers and 1.80 Lakh additional classrooms. Quality teachers and infrastructure is lacking in most schools. Bihar and Arunachal Pradesh can implement the act only if the centre provides 100% funds.

Drop out rate

Nearly half of the children who join class I in India, drop out by class VIII. Only 15% of the children reach high school. Every year, 2.7 million children drop out of school. The drop out rates among the girls is 34 per cent by the time they reach class V, mostly due to the value placed to the work they do inside and outside home. In a survey done by Surveys by the National Sample Survey Organization (NSSO), 42% of the girls said that they drop out of school to do housework. 14% of girls drop out as they think education won’t do them any good. 68% of the boys drop out to become a productive member of the family.

Children from poor families are more likely to drop out of school at a young age, and most of them are girls. One reason is the distance of schools from villages, and most parents are reluctant to send girls to distant schools. The direct and indirect cost of schooling, which includes opportunity cost too, is another reason. Some households deal with income shocks by taking children out of school. Many children drop out to enter the workforce, and in the case of girls, to look after younger siblings. Child migration, in some cases limit educational chances. In fact, it is one of the main reasons of dropping out of school. Children who live in households where both parents are present are less likely to drop out. Orphan hood too prevents children from attending school. The education of parents is another factor. Children from households where parents are uneducated are more likely to drop out. Health problems, pregnancy and disabilities are other reasons. Drop out rates are higher in rural areas than in urban areas. The poor quality of Government schools and low educational achievement is yet another reason.

It is usually believed that many children are out of school, as schooling facilities are not available. But, some detailed studies prove that such children account for only 10-15% of the out of school children. In the overwhelming majority of the cases, children are out of the school only because parents are not keen on educating them. It was also found that most of the drop outs are not engaged in highly productive pursuits, though they work long hours. Most of them look after their siblings, graze cattle, or do some work which doesn’t monetarily benefit them.

Bihar tops the list of drop out rate in the case of school girls, the second one being West Bengal Meghalaya has the highest drop out rate for both the genders. Kerala has the lowest rate. The drop out rate is extremely high among Scheduled Castes and tribes, followed by Other Backward Castes and Muslims, especially in rural areas. The drop out rate has declined significantly especially after the 90’s. But, the reasons are not Government orchestrated programs, but economic freedom. If one digs deep into many of the reasons, one would find that the Government education system has failed and more and more people are realizing that it has failed.

Positive Rights Vs Negative Rights

Do people have a right to education? Yes. Do they have a right to get educated at the expense of the tax payer? No. Because, it would invalidate ones right to education. There is no such thing as a positive right. Negative rights are the right to pursue a course of action without the interference of others. The right to the pursuit of education is a negative right. Positive rights or the “doctrine of entitlements” mean that some people should be provided with goods and services at the expense of others. The right to education at the expense of the tax payer is a positive right. Positive rights make negative rights invalid. Education, as a positive right would mean that some people are to provide others with education. It would mean that the funds to educate some are taken from others at the muzzle of a gun. To quote Nathaniel Branden, “Should the government be permitted to remove children forcibly from their homes, with or without the parents’ consent, and subject the children to educational training and procedures of which the parents may or may not approve? Should citizens have their wealth expropriated to support an educational system which they may or may not sanction, and to pay for the education of children who are not their own? To anyone who understands and is consistently committed to the principle of individual rights, the answer is clearly: No.”

Positive rights destroy freedom. If some are entitled to education at the expense of others, it would mean that some people are forced to provide it collecting revenues forcefully. According to this doctrine, no one has the right to deny his services or tax money. One has to choose between positive rights and negative rights. One can’t choose both as both are mutually exclusive. The only code of rights based on human nature, and the nature of survival on earth are negative rights. Positive rights are not based on a rational concept of rights. They are based on an irrational concept of rights. To quote George Reisman, “It is a concept of rights whose literal meaning is “I want it and therefore I’m entitled to take it.””

In the words of Tibor Machan, “Positive rights are thus nothing more than mislabeled preferences, or values, that people want the government to satisfy or attain for them—by force. The alleged positive rights of the citizenry must clash constantly. To the extent one person is conscripted to serve another, he can no longer serve his own purposes, nor, indeed, even the purposes of many others, given the scarcity of the time and skills to which others are supposedly naturally entitled. There is no principle implicit in the doctrine of positive rights that can resolve the conflicts. But positive rights conflict most of all with our basic negative rights to life, liberty, and property.”

There are no standards to enforce positive rights, such a free education. It is purely arbitrary, and the planners usually decide it based on their feelings and whims. People instinctively feel that education is very important, and can’t be left to the market. Hence, they decide that it should be available free of cost of anyone. It never occurs to them that such policies have costs, and need a vast bureaucracy to maintain it, which is not accountable to the people. To quote Machan again, “The working principle [Of positive rights] is: “You have a right to whatever you can get away with,” the same consideration governing any plain criminal.”

People do not have a right to education coercively provided. They have only a right to purchase it on a free market, using his legitimately owned resources. A person’s right to education is violated only when the Government stops him from availing the service of another person. His right to education is not violated when he is unable to pay up for it, or not able to find someone willing to educate him. If a person is unable to send his child to a private school as he is taxed to fund Government education, it could be said that his right to education is violated. A person’s right to education is violated when the Government sets national standards in education, and prevents him from accessing better quality education.

More importantly, a child’s right to education is not violated when parents fail to educate him. Herbert Spencer was among the first philosophers to realize this obvious argument against compulsory education: “No cause for such state interposition can be shown until the children’s rights have been violated, and that their rights are not violated by a neglect of their education [actually, instruction]. For what we call rights are merely arbitrary subdivisions of the general liberty to exercise the faculties; and that only can be called an infringement of rights which actually diminishes this liberty–cuts off a previously existing power to pursue the objects of desire. Now the parent who is careless of a child’s education does not do this. The liberty to exercise faculties is left intact. Omitting instruction in no way takes from a child’s freedom to do whatsoever it wills in the best way it can, and this freedom is all that equity demands. Every aggression, be it remembered—every infraction of rights–is necessarily active; whilst every neglect, carelessness, omission, is as necessarily passive. Consequently, however wrong the non-performance of a parental duty may be it does not amount to a breach of the law of equal freedom and cannot therefore be taken cognizance of by the state.”

The fact that some children might be uneducated under this scheme is pointed out by statists. Such arguments were dealt with perfectly by Isabel Paterson: “But would not some children remain illiterate? They might, as some do now, and as they did in the past. The United States has had one president who did not learn to read and write until after he was not only a grown man, but married and earning his own living. The truth is that in a free country anyone who remains illiterate might as well be left so; although simple literacy is not a sufficient education in itself, but the elementary key to an indispensable part of education in civilization. But that further education in civilization cannot be obtained at all under full political control of the schools. It is possible only to a certain frame of mind in which knowledge is pursued voluntarily.”

National Standards In Curriculum

Several arguments are put forward in support of national standards in curriculum. One is the obvious one that it would set high standards for education. Another is that evaluating the performance of various schools would be easy with national standards. It is also said that multiple standards within a country makes no sense. Such arguments however don’t hold much water. To be consistent one should suggest that there should be an international curriculum which everyone should follow. But, very few make such suggestions.

Every child is unique, with different abilities are interests. So, national standards in curriculum would do harm to all children, no matter what their interests and abilities are. Harm would be done to all children-whether smart or dull. Sheldon Richman rightly points out: “A government-set curriculum also gives a false sense that the prescribed course of study is best for all children. But children differ from one another. They learn at different rates and by different methods. One size definitely does not fit all. And governments are notoriously bad at tailoring services to individual differences. The more centralized the administration, the more this deficiency is magnified. To make matters worse, no curriculum can escape being arbitrary to a large extent.” Murray Rothbard too addressed this problem in his essay ‘Education: Free and Compulsory”: “Each child has different intelligence, aptitudes, and interests. Therefore, the best choice of pace, timing, variety, and manner, and of the courses of instruction will differ widely from one child to another. One child is best suited, in interests and ability, for an intensive course in arithmetic three times a week, followed six months later by a similar course in reading; another may require a brief period of several courses; a third may need a lengthy period of instruction in reading, etc. Given the formal, systematic courses of instruction, there is an infinite variety of pace and combination which may be most suitable for each particular child.”

As Isabel Paterson observes in ‘The God of the Machine”, “Educational texts are necessarily selective, in subject matter, language, and point of view. Where teaching is conducted by private schools, there will be a considerable variation in different schools; the parents must judge what they want their children taught, by the curriculum offered. Then each must strive for objective truth. Nowhere will there be any inducement to teach the “supremacy of the state” as a compulsory philosophy. But every politically controlled educational system will inculcate the doctrine of state supremacy sooner or later, whether as the divine right of kings, or the “will of the people” in “democracy.” Once that doctrine has been accepted, it becomes an almost superhuman task to break the stranglehold of the political power over the life of the citizen. It has had his body, property, and mind in its clutches from infancy.”

It is forgotten that competition is essential for reaching objective truth in education. As McCluskey puts it,” Standards advocates mistakenly assume that high external standards produce excellence, but in fact it is the competitive pursuit of excellence that produces high standards.” Most people look at the Government schools and conclude that such schools are not run to make a profit. They, however, miss the real picture. They fail to realize that the competitive market place is a “procedure for the discovery of such facts as, without resort to it, would not be known to anyone, or least would not be utilized.”(F.A.Hayek). If there is objective truth in education, why should be it subject to competition? Why can’t it be provided by an agreed up body? The answer is: To reach the objective truth, competition is necessary in education. The markets entrepreneurial process guided by profit motive would weed out errors and lead to better standards in education. Resources get diverted to better means of educating children in two ways. Entrepreneurs employing such methods would find resources moving towards them in the form of higher profits. More investment would be made by other entrepreneurs who employ the same methods.

Competition helps us know facts which wouldn’t have otherwise known. To raise the quality of shoes produced, we don’t monopolize shoe production or ban shoes which aren’t produced according to the standards set by the Government. Doing either of it will shut off the valuable information on how to produce better quality shoes at a cheaper cost. The same is true of education. Setting national standards for curriculum would only prevent people from experimenting with better ideas to educate children. It is usually argued that national standards would save children from fraudsters and poor quality providers in education. Even if it were true, it doesn’t follow that the Government should drag everyone down to lower standards. The honest and competent shouldn’t be made accountable for the faults of the dishonest and incompetent. Parents unable to make proper decisions should rely on private rating agencies and word of mouth suggestions.

Nothing can be more absurd than the notion that Government should set standards for the market players to function properly. Andrew Coulson rightly points out: “We understand this point implicitly in every field outside of education. We didn’t progress from four-inch black-and-white cathode ray tubes to four-foot flat panels because the federal government raised television standards. Apple did not increase the capacity of its iPod from 5 to 80 gigabytes in five years because of some bureaucratic mandate. And the Soviet Union did not collapse because the targets for its five-year plans were insufficiently ambitious.” To quote Aditi Kavarana & H B Soumya “One of the stated aims of the DTB is the “evaluation and research for improvement of curricula and books.” However, till date, no evidence has been seen of any “improvement of books” undertaken by the DTB. In fact, any enhancement or innovation shown in the field of textbook printing has been by private publishers such as Orient Longman, Macmillan, and Frank Brothers.” Still, it is unfortunate that people trust the planners on issues of curriculum.

A much more serious problem associated with national standards in curriculum is bureaucracy. To quote Sheldon Richman again, “Bureaucracies move slowly. Even when errors are discovered, corrective change can take a long time. In an open-ended world, error and discovery are inevitable. Why freeze a curriculum in law when discoveries are bound to reveal mistakes?” Moreover, it would make no sense to assume that Government officials are omniscient saints with no ulterior motives. It stands to reason that people wielding power are more interested in it than those who don’t. A private businessman acquires economic power through serving his customers. A Government official acquires it through force. Obviously, ones interest in power, prestige and money would affect the curriculum designed by him. As a result, almost everything taught in the name of humanities in schools and colleges is Government propaganda. It should also be noted that to fit everyone into the same mold, the curriculum caters to the lowest common denominator.

The experience of Private Unrecognized schooling in India

A 2005 study done by James Tooley and Pauline Dixon proves that private unrecognized schools in slums of Hyderabad and Delhi do a better job in educating children than Government schools. It was found that 65% of the children in slums in Hyderabad attend private schools, of which 37% are in unrecognized schools. A large part of these private schools are not included in the official statistics as they are unrecognized. In student achievement tests, students in private unrecognized schools performed much, much better than their counterparts in public schools. These superior results were achieved at a cost much lower than in Government schools. It was found that there were several such low fee private unrecognized schools in Haryana, Rajasthan, Uttar Pradesh and West Bengal. Private schools in Uttar Pradesh spent on 41% of the expenditure in public schools per pupil, and yet achieved superior results. (Kingdon 2008). In the United States, public schools are spending 93 percent more than the estimated median private school.  The cost is cut mostly by paying low salaries to teachers. Private schools in Delhi pay as low as one-tenth of the salary of a Government school teacher. (Tooley And Dixon 2005) Government school teachers were paid an average of Rs 10071 a month when private unrecognized school teachers paid and average salary of Rs 1361. Operating at such a low cost helps private schools in meeting the needs of students in a better manner through low pupil-teacher ratio and hiring more teachers.

It was found that in half of the Government schools, no teaching activity was going on when the researchers visited without an announcement. In one third of the Government schools, the head teacher was found to be absent. Teacher absenteeism was as high as 42% in Jharkhand, even though they were highly paid that in private unrecognized private schools. There were some recent studies which suggest that teacher absenteeism is high in Kerala. No relationship was found between higher pay and low absenteeism. Older teachers who are paid more are more likely to be absent than younger teachers. Even contract teachers showed the same absence rate. The situation was not much different in private aided schools. The government aided grant to private schools doesn’t provide any incentives for them to perform well.

In a study done by Kremer, Muralidharan, Chaudhury, Hammer, Rogers it was found: “Teacher absence is more correlated with daily incentives to attend work: teachers are less likely to be absent at schools that have been inspected recently, that have better infrastructure, and that are closer to a paved road. We find little evidence that attempting to strengthen local community ties will reduce absence. Teachers from the local area have similar absence rates as teachers from outside the community. Locally controlled non-formal schools have higher absence rates than schools run by the state government. The existence of a PTA is not correlated with lower absence.” It was said that it “has become a way of life in the profession.” According to Dreze and Sen, “The most striking weakness of the schooling system is not so much the deficiency of physical infrastructure as the poor functioning of the existing facilities. The specific problem of endemic teacher absenteeism and shirking, which emerged again and again in the course of our investigation, plays a central part in that failure. This is by far the most important issue of education policy”.

Head teachers were less likely to take action against low performing teachers in Government schools. As Karthik Muralidharan observes: “We found that only one head teacher in the nearly 3000 public schools we surveyed reported ever dismissing a teacher for repeated absence.10 On the other hand, 35 head teachers in our sample of around 600 private schools reported having at some point dismissed a teacher for repeated absence and so shirking teachers in the private sector are around 175 times more likely to have disciplinary action taken against them!” The interesting fact is that more than 80% of these Government school teachers send their children to private schools. The teachers in private schools are accountable to parents as they demand quality education. Teachers who don’t perform well are sacked. Unions, employment contracts and the lack of incentive structure prevent public schools from performing better. Teachers are virtually guaranteed a job that they would hold for their life.

As a result of a study in Tamil Nadu, it was found that students in private unaided high schools performed much better than those in government schools in English and mathematics. In Math and Hindi, Private unaided school children in Madhya Pradesh outperformed children attending government schools. As Heyneman and Loxley pointed out school effects are more important to children than parental characteristics in low income countries and among children from low income families.

In Hyderabad, government schools had the highest pupil-teacher ratio at 42:1. Private aided schools had a ratio of 43:1, when the ratio at private unaided unrecognized schools was 22:1 and of Private unaided recognized schools 27:1. This shows that the pupil-teacher ratio in private unrecognized schools was half of that of Government and private aided schools. The average monthly fee in these schools were as low as 68.32 ($1.57) per month. The average year of establishment for private unaided unrecognized schools was 1996, and for private unaided recognized schools the average year of establishment was 1986 disproving the myth that these schools are run by fly-by-night operators. Most schools were run for profits, except in Hyderabad where schools were legally required to be run by charitable trusts or organizations. Majority of them (Nearly 90 percentage) didn’t receive any outside funding. Most parents in these cities don’t send their children to public schools, and for several reasons: The quality of education in Government schools is abysmal. Teacher absenteeism is high and teachers who are present don’t work. The medium of instruction in public schools is not English. Parents want their children to study in English medium schools.

Private unrecognized schools had better facilities than Government schools in general, and teaching activity was taking place in almost all schools when visited without an announcement. There were blackboards in 94% of the private unrecognized schools while it was 96% in private recognized schools and 78 percent in the government. There were functioning toilets in only 52% of the Government schools, whereas it is 97% in private schools, both recognized and unrecognized. The Right to Education act stipulates that all schools should have toilets for girls. But, it is evident that it is Government schools which lack these facilities. More than 70% of the private schools offer concessionary or free places for poor students. The reasons vary, including helping the poor, uplifting the standard of education, helping the poor, and gaining a good reputation. At present, the main problem plaguing such private unrecognized schools is that they can’t issue valid transfer certificates to students or get Government grant.

The key findings of the Tooley And Dixon study in slums in North Shahdara in Delhi was:

“1) Private unaided schools make up the majority of Schools in North Shahdara with more unrecognized than Government Schools.2) Higher Achievement in Private than in Government Schools.3) Private Unaided Schools cost significantly less than Government Schools in per pupil teacher costs.4) Teaching commitment higher in private unaided than Government Schools.5) The poorest children are given free or subsidized seats in private unaided schools.6) Pupils and teachers are more satisfied or at least as satisfied in private unaided schools than in Government Schools.7) Head teachers or School Managers more frequently observe classes in Private unaided Schools and are in more control.”

The fact that private schools perform this well even after the Government putting several obstacles in front of them should tell us something. Mayank Wadhwa points our attention to the fact that “Opening a private school is a mind-numbing task; it involves a colossal amount of paperwork. An applicant faces a four-pronged attack by the Directorate of Education (DoE), the Central Board of Secondary Education (CBSE), the Municipal Corporation of Delhi (MCD), and the Delhi Development Authority (DDA); making the procedure to open and operate a school financially expensive and time consuming.”The school should prove its non profit motive. It should also obtain an essentiality certificate proving the requirement of a school in that area. Apart from the logical fallacy involved that the Government has no objective way of deciding this, it ignores the fact that 14 Lakh children in Delhi are out of school. A letter of sponsorship from DOE is required for the land to be allotted, and the concerned authority should grant recognition. It should be affiliated to CBSE. According to the Unnikrishnan judgment, imparting education can never be a trade or business. Education should not be “commercialized”.

Private Schooling in Kerala


Kerala has the highest literacy rate and the lowest drop out rate in India. It is often attributed to leftist politics and Government intervention in the economy. However, all such notions are far from the truth. The highest proportion of private primary schools in all states in India is in Kerala (63 percentage), of which many are Government aided. The average for India is around 5 percentage. Most Indian states have made primary education compulsory by law. In Kerala, such is not the case. Only 2 percentage of the children in Kerala get free textbooks and supplies, when in many other states more than half of the children get such free goods. Poor households in Kerala spend more on primary education (36 percentage of the income) when compared to any other state. Only 2 percentage of the children in Kerala are not enrolled in school. Not surprisingly, Kerala has the highest literacy rate, followed by Meghalaya (52 percentage), which has the second highest number of private primary schools in India. Both states had the highest literacy rates,` though Mizoram came second in the recent past.

State universities in Kerala receive only 54 percentage of the budget from the Government. The rest is raised from the customers and other sources, which leads to more accountability, and responsibility in spending the funds received in that manner. The first Marxist Government in Kerala tried to take over management of schools, but their plans didn’t succeed as of widespread protests. As Parth J Shah points out, Two questions provide a clue to what needs to be done in our education system: “Which two states have the highest rate of literacy in the country? Which two states have the highest proportion of privately managed schools? Both questions have the same answer: Kerala and Meghalaya. There is a positive correlation between literacy rate and the proportion of schools under private management.”

The Problem with School Vouchers

Inspired by Milton Friedman, several public intellectuals and defenders of Individual liberty in India support the idea of school vouchers. Milton Friedman expressed his position in these words: “I want education vouchers to be available to everyone. They should contain few or no restrictions on how they can be used. We need a system in which the government says to every parent: “Here is a piece of paper you can use for the educational purposes of your child. It will cover the full cost per student at a government school. It is worth X dollars towards the cost of educational services that you purchase from parochial schools, private for-profit schools, private nonprofit schools, or other purveyors of educational services. You may add from your own funds to the voucher if you wish to and can afford to.”

However, there are several problems with this plan.

1) The voucher plan transfers income from those who send their children to private schools to those who send their children to public schools.

2) The voucher plan is biased against parents who wish to send their children to non-traditional private schools and non-traditional religious schools.

3) The state won’t pay for the education of children with no strings attached. It would lead to more Government interference in the education sector.

4) Vouchers will increase the price of education reducing incentives for educational institutions to compete on the cost of providing education

5) It would be available only for the poor, who are at present at the receiving end of the welfare schemes, and not for the long-suffering tax paying middle class.

6) The voucher plan is biased against the hard working parents who presently send their children to private schools.

7)     It tampers with economic calculation. As William Anderson noted, “Vouchers are nothing more than another rendition of Oskar Lange’s “market socialism.” They are an attempt to “play market” using socialist hardware, something that did not work in the Soviet Union and something that would ultimately fail here.”

8)     It would lead to “fly-by-night” operations in the education sector.

9)     There will be no internal privacy in private schools, as they will be answerable to the Government.

10)The schools will have to obey anti-discrimination rules, and would be subject to price controls.

11)It would work against the independence of curriculum.

12)The Government would have power over disciplinary procedures.

13)The plan would work against single sex and faith based schools.

14)The belief that the Voucher plan would lead to more competition is a myth. To quote Charley Reese, “To state that public schools can compete with private schools is like saying a bronze statue of a horse can run a race with a live horse.”

15)Any sort of Government intervention in the economy causes unintended consequences and tampers with the entrepreneurial process. Trying to get around this fact is similar to trying to square the circle.

Why the Market Performs Better

It is established beyond doubt that in general, private schools perform much better than Government schools. It happens for several reasons. Efficiency is rewarded on the market. Such is not the case in the Government system and bureaucracy, as it lacks an incentive system and profit loss signals. Lacking choice, parents who send their children to Government school don’t find it in their interest to keep track of the performance of the school. Parents, who send their children to private schools, however monitor its performance and makes decisions based on it. Hence, private schools are more accountable to parents and children. Though there is much talk about accountability in Government institutions, Government schools are accountable to the authorities, not parents.

The market meets the needs of the majority of the people. Schools on a free market can set up schools which cater to minorities and students with different interests and abilities. The government gets one signal in a few years in the form of elections. On the market, entrepreneurs get signals in the form of profits and losses continuously. The market allows consumers to decide the quality and the nature of the education they are to receive. In government run institutions, the planners, and other authorities decide the quality of education. Government schools don’t serve the ultimate consumer, but gratifies the needs of politicians and bureaucrats. The notion of Government investment in education is misleading. Government can’t invest. All Government spending in education is consumption, in the sense that it is not to serve the children and parents, but bureaucrats and politicians-As there are no reliable information available for Government officials on the needs and desires of the people they are intending to “serve.”

Corruption and possibilities of mistakes would be low in private run schools. As a private school is risking its own funds, and has a financial and moral responsibility over these resources, the chances of corruption would be low, unlike in many public schools. Parents don’t have to go through a lengthy process (In the form of elections) to change the quality of education they receive in private schools. If they are not satisfied with the performance of a particular school, all they have to do is to switch to a better school. Government schools fail for many reasons including lack of competition, ineffectual school boards, unions, political interference, conflict of interests, lack of standards and centralized control and funding.


1)     Ayn Rand-Capitalism: The Unknown Ideal

2)     Walberg And Bast-Education And Capitalism

3)     Ivan Illich-Deschooling Society

4)     Isabel Paterson-The God Of The Machine

5)     Education:Free And Compulsory-Murray N Rothbard

6)     Education:Intellectual, Moral And Physical-Herbert Spencer

7)     The Theory Of Education In The United States-Albert Jay Nock

8)     Education In America-George Charles Roche

9)     Private Education is Good for the Poor: A Study of Private Schools Serving the Poor in Low-Income Countries – James Tooley and Pauline Dixon

10)Private Schools Serving the Poor. A Study from Delhi – James Tooley – CCS View Point 8

11)The Private Sector Serving the Educational Needs of the Poor: A case study from the Philippines – Charisse Gulosino and James Tooley

12)Private Schooling in India: A New Educational Landscape – India Human Development Survey Working Paper No. 11

13)Corrupt schools, corrupt universities: What can be done?

14)Making Primary Education Work for India’s Rural Poor: A Proposal for Effective Decentralization – Lant Pritchett and Varad Pande

15)Overview of School Education in Delhi – Soumya Gupta, CCS

16)Private Education. What the Poor Can Teach Us – James Tooley

17)Public and Private Schools in Rural India – Karthik Muralidharan and Michael Kremer

18)Serving the Needs of the Poor: The Private Education Sector in Developing Countries – James Tooley

19)Teacher Absence in India: A Snapshot – Michel Kremer et. al.

20)How much does the Government spend on Education in Delhi? – Vipin P. Veetil – Centre for Civil Society

21)Does Performance Related Pay for Teachers Improve Student Performance? Some evidence from India – Geeta Kingdon

22)Licenses to Open a School: It’s All About Money – Mayank Wadhwa – CCS Working Paper No. 0001, 2001

23)The Regulation of Private Schools Serving Low-Income Families in Andhra Pradesh, India – Pauline Dixon and James Tooley

24)Trash the Textbook Bureau – Aditi Kavarana and H B Soumya – CCS Working Paper No. 0005, 2001

25)Why Central Exams at All? M. Gopinath and Hari Krishna – CCS Working Paper No. 0070, 2003

26)”They Spend WHAT? The Real Cost of Public Schools,” by Adam B. Schaeffer

27)”Behind the Curtain: Assessing the Case for National Curriculum Standards,” by Neal McCluskey

28)”Markets vs. Monopolies in Education: A Global Review of the Evidence,” by Andrew J. Coulson

29)”End It, Don’t Mend It: What to Do with No Child Left Behind,” by Neal McCluskey and Andrew J. Coulson

30)”Why We Fight: How Public Schools Cause Social Conflict,” by Neal McCluskey

31)”No Child Left Behind: The Dangers of Centralized Education Policy,” by Lawrence A. Uzzell

32)”Corruption in the Public Schools: The Market Is the Answer,” by Neal McCluskey

33)”A Lesson in Waste: Where Does All the Federal Education Money Go?,” by Neal McCluskey

34)”Our History of Educational Freedom: What It Should Mean for Families Today,” by Marie Gryphon and Emily A. Meyer

35)”Parent Power: Why National Standards Won’t Improve Education,” by Sheldon L. Richman

36)”Homeschooling: Back to the Future?,” by Isabel Lyman

37)”Public Schools: Make Them Private,” by Milton Friedman

38)”Education: Is America Spending too Much?,” by John Hood

39)”Market Solutions to the Education Crisis,” by Myron Lieberman

40)”Contradictions of Centralized Education,” by Lawrence A. Uzzell

41)Right To Free education-India Government

42)Right To education Bill 2005

43)Right To Education Bill 2009

44)Prime Ministers address to the nation

45)Vouchers: Another Income Redistribution Scheme – Laurence M. Vance

46)Vouchers: Worse Than the Status Quo

47)Who Gets Vouchers and Who Does Not

48)The Status of Education In India-National Report By UNESCO

49)India Literacy Project Midday Meal (Noon Meal) Scheme in India

50)Recommendations on Mid-day meals

51)Child Malnutrition In India

52)Dropping Out From School

53)The Perils Of Positive Rights-Tibor Machan

54)India Policy Education An Agenda

55)Private Schools: Do They Prove High Quality Education

56)Public And Private Schools In Rural India-Kremer And Muralidharan

57)Public And Private Schooling: The Indian Experience

58)Private Schooling In India

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