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Business Commentary / Bibek Debroy

Liberalisation means govt has business to be in education and health

Thanks to Professor Amartya Sen getting the Nobel prize for economics, people have begun to talk about primary education and rural health. The State has a role to play in these areas. Liberalisation does not mean an end to State intervention in primary education and rural health.

Look at the east Asian countries. They got their priorities right. Despite the currency crisis, the fact remains that their levels of human resource development and infrastructure are far better.

The United Nations International Children's and Education Fund has recently released a report titled The State of the World's Children 1999 and, as expected, the Indian figures are horrendous.

Constitutionally, all children should have had access to free and compulsory education by 1960, 10 years from the Constitution coming into force. Yet, the adult literacy rate in India is 52 per cent, compared to 57 per cent in sub-Saharan Africa and 84 per cent in east Asia. The female literacy rate in India is 38 per cent, compared to 47 per cent in sub-Saharan Africa and 76 per cent in east Asia.

About 64 per cent of primary school entrants reach Class V in India. The figure is 94 per cent for China and Malawi. In addition to gender biases, there are regional dimensions.

Apart from the traditionally poor BIMARU (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) states, the situation is particularly bad in Orissa and West Bengal.

India can obviously not afford to be competitive in the 21st century with such high levels of illiteracy. So the State needs to spend more and the problem will be solved.

Because of reforms, public expenditure on education has come down from four per cent (of national income) in 1991-92 to 3.27 per cent in 1995-96. No wonder the Left has hijacked Amartya Sen's arguments. But consider what percentage of gross national product India spends on education. The figure is roughly 3.5 per cent, while China spends 2.3 per cent and Sri Lanka spends 3.1 per cent.

How is it then that China has an adult literacy rate of 82 per cent and Sri Lanka one of 90 per cent? Therefore, the issue cannot be one of simply increasing public expenditure on education, since the efficiency of expenditure is also important.

When I was a student studying economics in an under-graduate college in Calcutta, the monthly tuition fee used to be 15 rupees a month, roughly 30 cents. My father paid the same tuition fee, so did my grandfather. If the State spends more on such subsidies, does that enhance the cause of literacy?

Will more children go to primary school if salaries of college and university teachers are increased? This is an obvious point, repeated ad nauseam.

Unlike east Asia, India has got its priorities wrong by subsidising higher education instead of primary education.

But there is more. I have seen figures for several Indian states that show that out of the expenditure on education, 98 per cent is spent on wages and salaries of school teachers.

Nothing is left for chalk, dusters, blackboards and textbooks. I am sure that some of you have noticed the news item about how the Uttar Pradesh government has used money sanctioned to it by the Centre under the "Operation Blackboard" scheme.

This has been used to buy harmoniums and drums (dholakas) for chanting Saraswati Vandana. If public expenditure on education is increased by hiking salaries of primary school teachers, how does that necessarily help the cause of literacy? Remember that most of these teachers do not even go to schools to teach. Why should they? They are not paid by local authorities or the schools, their salaries come from district headquarters.

Therefore, I can't accept the argument that the State has a role to play in primary education unless I am told what the word State means in this context. An experiment has apparently been going on in Maharashtra. Twenty-five villagers get together and petition the state government for a school and the state government sanctions Rs 10,000 for each such school.

But there is a difference, the state government does not quite run the school. The school is run by the villagers, by the local body. The teacher is appointed by them, preferably from the village, and paid by them as well. Therein lies the difference, since accountability exists.

Apparently, under this scheme, Maharashtra has added more schools in two years than it did in 50 years since Independence. However, this last statement is based on hearsay and I am not sure about its veracity.

To my mind, this difference is a fundamental one. In a poor country like India, there is a case for the State to finance primary education, as Sen argues and this proposition is unassailable. But is there a case for the State to produce educational services, as Sen also seems to be arguing?

Finance and production are distinct functions. As a friend of mine (Parth Shah) once wrote, if the State is inefficient in producing steel, how can it suddenly become efficient in producing educational services? There is a superficial impression that primary schooling is a problem because enough schools do not exist in rural areas, or because there isn't a demand or awareness about returns on primary education.

Some recent work, including that by Rukmini Banerjee of Pratham (a non-governmental organisation based in Bombay), has questioned the point about demand. There is a demand for primary education, and people are prepared to even spend private resources, provided that education is of a sufficiently good quality.

Rukmini Banerjee cites anecdotes from Bombay. Parents send children to government-type (municipal) schools to obtain free textbooks and meals. But, in addition, they personally pay for the same children to attend private schools in the evening so that there is some actual learning, using textbooks acquired from government schools.

Nor is it the case that the State needs to set up more schools in rural areas, because there are not enough schools. This is an issue for upper primary schools, but not for primary schools. Ninety-five per cent of people have access to primary schools within a kilometre of their houses.

There are enrolment and dropout problems because of quality. So instead of the State providing educational services, one needs to privatise and introduce competition, the word privatisation being interpreted in a broad sense so as to encompass non-formal and flexible school systems.

Rukmini Banerjee's anecdotes again. Municipal schools in Bombay work during the mornings. Children do not attend such schools because they have to work, but not the kind of work you imagine. The water comes for one hour in the morning and children cannot afford to be in school then.

Municipal schools will not adjust their timings to synchronise with municipal water supply, but private schools are more adaptable and flexible.

If we want to solve the problem of illiteracy, I am therefore not sure that we need more of the State. Perhaps, we need less of the State, at least in a centralised sense. The Left, which has hijacked Sen's arguments, has misdiagnosed the problem. No wonder the state of primary education in West Bengal is atrocious.

Bibek Debroy

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