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Why Strong Institutions Matter?

By Abhijit Katikaneni 

Brazil is a country with great disparity and destitution, 21.4% of Brazil’s population lies below the poverty line.[1] Brazil employs an open competitive political system but its effects have not been straightforward. Brazil’s education policy’s efficacy at times has been hampered due to its open competitive political system and the number of allies the governing party houses. Has democracy in Brazil endorsed equity-enhancing reforms in the arena of education? Brazil and its policymakers has worked towards equity enhancing reforms with the creation of institutions such as FUNDEF and has been successful to an extent but inequity in the education policy itself creates inequality and further widens the socioeconomic gap. But with the creation of institutions such as FUNDEF Brazil’s population of 21.4% under poverty line could leave the poverty cycle and embark on a prosperity cycle with the aid of education.[2]

I will be highlighting how education policy has been approached in Brazil and then will look at how political actors over a period of time have approached education policy and the challenges in framing policy they’ve faced and will illustrate why it is of utmost importance to provide quality reforms and not access reforms.

Education policy in Brazil: 
Brazilian policymakers have preferred and focused on providing an increase of services in the education sector, aiming for access reform instead of focusing on equity enhancement through a restructuring of the sector. Public schooling at the primary and secondary levels do not promise a high quality education, Brazilian governments traditionally have not held it to be a central concern. Brazil spends 5.1% of its GNP on education in the aggregate however their achievement outcomes are poor by those standards, spending per student on secondary and primary education ranks below most Latin American countries.[3]

With the help of public policy, schooling can be one platform in which one could reduce inequality and make an impact, it should be central to equity enhancing reforms. Public primary and secondary education needs to hold its own and have a strong foundation, as the beneficiaries of public schooling are the poor people as most upper class and middle class Brazilian opt for private schooling. A good education is essential to escaping the poverty cycle. A close link between education and salary levels in the Latin American nations illustrate this.[4]
Education technocrats and politicians have long tried to improve the education sector in Brazil not only to increase welfare but also to enhance and enable Brazil to compete globally.

President Cardoso’s priority was to provide better schooling. However, there has no been social movement targeted at providing high quality public schooling since democracy had been reinstalled. That might be due to low levels of civil society.[5] In other countries, the middle class stresses the importance of high quality education and presses for it whereas in Brazil the middle class has long left public schooling at primary and secondary levels, the middle class is no more a stakeholder. And whereas parents from low education background make demands about the functioning of the school, they don’t press for reform in education.[6] In any case we would expect Brazil to have improvements in outputs and results due to the fact that politicians still have to appeal to the poor. However this is not the case.

The state has increased funding to all three levels of education: primary, secondary, and tertiary by almost 30% since the late 1980’s.[7] An increase in funding can be seen at federal, state and municipal levels. Brazil’s Human development index improved in 2006 and that was largely down to increased access to education.[8] The focus is levied upon the percentage of children between the ages of 7-14 attending school but the quality of education they receive is not taken into account, which is of prime importance.[9] An issue of access reform versus quality reform, focus needs to be levied upon providing quality reform once the goal of access reform has been achieved.

Political hindrances to Policymaking:  
Apart from an increase in spending, other efforts have been made to develop the quality of basic education. The first of these started with Brazils new democratic regime as President Jose Sarney at the helm. However due to the number of political parties in Brazil, patronage oriented allies are common and each of the allies according to their respective agreements with the party control a particular ministry.[10] The Partido da Frente Liberal (PFL) an ally of Jose Sarney controlled the ministry of education; the ministry was ineffective in the mid to late 1980’s. For instance, the education ministry on the base of project proposals presented was to make transfers to states and municipalities, while suffering from low administrative capacity. But the ministry undermined the quality enhancing value of the program and focused on making political qualifications rather than the looking at the projects comprehensiveness, which was the goal. When the PMDB won 25 out of 26 state governorships in 1986,[11] transfers from the ministry to state governments were reduced considerably while transfers to municipal governments as to where Jose Sarney political allies continued to stay strong were increased by 600%. These are the kind of hindrances policymakers face in shaping policy, the goal is to develop institutions such as FUNDEF to bypass such problems. These problems will remain as they are engrained in politics and policy making but the creation of institutions that are independent will help overcome the problems.

FUNDEF under President Cardoso: 
A team of highly devoted reformers under President Cardoso overlooked some improvement with the inception of FUNDEF (Elementary Education Development and Teacher Valorization Fund). FUNDEF’s success was the chief concern they pursued in education. The program is designed to deliver technical assistance and federal funds to municipalities and poorer regions that do not reach their goal of FUNDEF – clear minimum threshold spending per student which is around three hundred reais in 2000 despite reaching their constitutionally allocated budget spending on Education. Municipalities and States that are better off and which spend above their mandated mark are required to subsidize their counter parts who are not performing well. FUNDEF is the most equity-enhancing program in Brazils education system as two-thirds of the benefits go the North and North east.[12] One important difference between reforms employed by President Sarney and President Cardoso was the ability of the ministerial teams commitment to reform and the backing provided by President Cardoso. The ministerial team moved fast and discreetly in order to keep the program on a low and before the stakeholders could estimate their costs the program was passed within a month with the help of a majority backing President Cardoso. By the time opposition formed it was too late and by the 2000’s the results of the program spoke for themselves.

Inequity in possibly Brazils most equity-enhancing sector: 
Possibly the clearest equity-enhancing reform Brazil could pursue would be to redistribute financing among the three levels of the system (Primary, Secondary and Tertiary). Brazil’s spending on higher education is close to the highest in the world, the country spends 4.7% of its GDP on education, one quarter of it is spent on higher education, which enrolls 2% of all students. [13] On a per capita basis, students in universities enjoy more than 2.5 times funding of primary school students.[14] The state having to burden itself by taking the total bill of public universities hinders equity-enhancing reform. Most public university students are middle class and pay nominal fees.[15]Entry to universities is based upon competitive examinations and students who attend public primary schools and secondary schools are underprepared for these examinations due to a lack of quality education. And that is in part due to states having to bear total bills of public universities. No funding goes towards the betterment of public primary and secondary education because the interest groups with around higher education namely university students, their professors are from the middle and upper classes. They are prepared to mobilize against change and the interest groups with low income are not. Governments fear backlash from student protests is they try to put financial burden on them or try reallocate funding from tertiary education to the other two levels which is arguably more important to get people out of the poverty cycle.
The interest groups who stand to benefit from the status quo remaining are stronger than low-income groups that would actually benefit from vital reform.

I have illustrated above that the only way to bypass or overcome the politics for personal gain or to disrupt the status quo is to build institutions such as FUNDEF that facilitate growth from the bottom to top and form human capital and enable low income groups to get out of the poverty trap and kick start a prosperity cycle to lower the percentage below the poverty line. Brazil also needs to relook its policy on the amount of funding tertiary educations gets as that is only helping the ones who do not really need it. Brazil in order to compete globally, reduce poverty and increase human capital need to invest further in public primary and secondary education via institutions.

Abhijit Katikaneni is a student from the GCPP14 batch. He is currently studying international relations at the University of Rochester.

Image source: https://en.wikipedia.org/wiki/Education_policy_in_Brazil

[1] https://www.cia.gov/library/publications/the-world-factbook/fields/2046.html#br

[2] http://www.campaignforeducation.org/docs/reports/brown/EFA%20Report_Low%20Res%20v2.pdf

[3] Draibe, Sonia. 2004. Federal leverage in decentralized system: Education Reform in Brazil

[4] Stallings, Barbara and Wilson Peres. 2000. Growth, employment, and equity: The impact of the Economic reforms in Latin America and the Carribean. Brookings institution Press.

[5] http://bresserpereira.org.br/papers/2000/97After-elite.pdf

[6] Nelson, Joan. 1999. Reforming health and education. Overseas development Council and Johns Hopkins University press.

[7] World bank. 2004. Brazil: Equitable, Competitive, sustainable: Contributions for Debate. Washington DC: world bank.

[8] http://hdr.undp.org/sites/default/files/Country-Profiles/BRA.pdf

[9] Gitahy, Ana Carolina, and Rafael Pereira. 2003. http://www.jb.com.br/capa/

[10] Cohon, Adam. 2015. International Relation 225. Lecture Feb 9th. University of Rochester.

[11] http://electionresources.org/br/index_en.html

[12] Moura Castro, Cladio de. 2000. Education: Way Behind but trying to Catch up.

[13] Moura Castro, Cladio de. 2000. Education: Way Behind but trying to Catch up.

[14] Unesco Global education digest 2007.

[15] OECD ( 2004, 2007) – socioeconomic profile of public university students in brazil

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Budget 2016-17: Are we on the right track on the education front?

by Kaushiki Sanyal (@kaushu)

The 2016-17 Union Budget has allocated Rs 72,394 crore compared to Rs 68,963 crore for last year, which is about 4.9% increase in the education budget. About 4% of the total budget and 0.5% of the GDP is allocated for education. This is a far cry from the 6% of GDP that had been recommended by the education commission set up in 1966 under the chairmanship of D.S. Kothari. We allocate less than not only developed nations such as the U.S. (5.2%), U.K. (5.8%), Japan (3.8%) and Australia (4.9%), we lag behind Brazil (6.3%), Ghana (8.1%), Indonesia (3.6%) and Pakistan (2.5%).

In the last year’s budget, Rs 42,219 crore and Rs 26,855 crore were allocated for school sector and higher education sector, respectively. In this budget, Rs 43,554 crore (approx 3 per cent increase) is allocated for school education and Rs 28,840 crore (approx 7.3 per cent increase) is allocated for higher education.

While there is slight increase in allocation in absolute terms, the budgetary allocation relative to the total budget and GDP have not changed.

Numbers are only one aspect of the budget and does not tell the whole story.

The new proposals in the Budget regarding education are as follows:

  • Focus on the quality of education: This is to be achieved by (a) increasing the share of allocation under Sarva Shiksha Abhiyan for this; and (b) 62 new Navodaya Vidyalayas will be opened in the remaining uncovered districts over the next two years.

    There is little to criticize these points given the motherhood and apple pie nature of the proposals. But the devil lies in the detail. Pratham’s ASER has been crying itself hoarse every year (since 2005) pointing out the low levels of learning outcomes without much dent in the policies. Would this government take heed and put in place measures to ensure better learning outcomes as well as a regular monitoring system for measuring learning outcomes? A key factor in enhancing quality of education is the quality of teachers. What steps does the government plan to take to provide good quality training for teachers? As suggested by the Seventh Pay Commission, would the increase in pay of teachers be linked with their performance?

  • Make higher educational institutions world class: Ten public and ten private institutions shall be given an enabling regulatory architecture to emerge as world-class teaching and research Institutions. This will enhance affordable access to high quality education for ordinary Indians. A detailed scheme will be formulated.

    The first question that comes to mind – is this too little, too late? At last count, we have 757 universities, 38,056 colleges and 11,922 institutes in the country. Why only 20 institutions should be provided with an enabling regulatory environment? Shouldn’t all educational institutions be provided that? Also, on what basis would these institutes be chosen?

    Second, given that we have the dual challenge of low Gross Enrolment Ratio (GER) in higher education (23.6%) and many graduates who are unemployable, this seems grossly inadequate as a measure. How do we address the skill-gap problem adequately?

    Third, the nature of the enabling regulatory architecture will be the key to changes in the quality of the institute. Would it allow institutes to hire world class faculty at market salaries? Would it allow institutes to set student fees? What would be the governing structure of these institutes? How would faculty be evaluated? These are key questions that need to be pondered over while framing the policy.

  • Set up a Higher Education Financing Agency (HEFA): HEFA would be set up with an initial capital base of Rs1,000 crores and it would be not-for-profit organization. It would leverage funds from the market and supplement them with donations and CSR funds. These funds will be used to finance improvement in infrastructure in India’s top institutions and will be serviced through internal accruals.

    This is a good idea but it is not clear why the focus is on improving the infrastructure in India’s top institutions. The condition of our state universities where most students attend is abysmal. Instead of focusing only on improving the quality of top universities and institutes, it would make far more overall difference in the quality of education if the government also makes an effort to enhance the infrastructure of state universities.

  • Digital Depository for Certificates: The government proposed to establish a Digital Depository for school leaving certificates, college degrees, academic awards and mark sheets, on the pattern of a Securities Depository. This will help validate their authenticity, safe storage and easy retrieval.

    The National Academic Depository Bill, 2011 was introduced in the Lok Sabha on September 5, 2011 but it had lapsed after the dissolution of the Lok Sabha. The Bill had sought to create an electronic depository to maintain database of academic records. If the Modi government can enact this law, it will be a step in the right direction since it will help in detecting fake degrees and mark sheets.

    This lapsed Bill had been referred to the standing committee on HRD which had made some interesting suggestions. At that time, the government was planning to give this task to security depositories. It had even commissioned two pilot studies to check the viability of security depositories undertaking this task. The new government should check these evaluations before taking a decision on who would create the database. The standing committee had also suggested that awards given by foreign boards and professional awards should also be included. Other recommendations pertained to recruitment and training of agents of the depository, the time-limit of the verification process and the adjudication of the offences under the Bill.

What should have included?
To my mind, the government yet again missed the boat on secondary education. This is the crucial link between elementary and higher education in India’s education system. Focused attention needs to be paid to this part of school education to ensure that students are well-equipped to tackle higher education.

Instead of regulating fees in private institutes (and for that matter government institutes), the government needs to provide for easy and low interest (or interest-free) student loans and a large number of scholarships for meritorious students. This would ensure that higher educational institutes are financially viable while ensuring there is equity.

Kaushiki Sanyal is an Independent Policy Consultant. She tweets @kaushu

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The three C’s to improve the education system

Improving competition, providing contestability and ensuring clarity of objectives can help improve the supply side of India’s education sector 

Disclaimer: The education system in India has been thoroughly reviewed and criticised numerous times. There have been various studies done by NGOs, the Ministry of Human Resource and Development and education institutions on the subject. This piece attempts to club some of the suggestions from various readings into three broad buckets.

With India struggling to reduce the large share of low skilled employment as well as its huge informal sector, it is time that some of the burden is shared with the private sector.  As per the Human Capital Index, India ranks 100 out 124 countries, indicating its inability to improve human capital formation.  Therefore, steps need to be taken that incentivise the private sector to invest in primary education institutions in the country.

As the Economist article “Learning unleashed” shows, there has been a surge in the private schools across developing countries. A large segment of the population, including the low income families, have shown a preference towards private schools over public schools. The key reason for this state of affairs is the poor standard of teacher training and, consequently, the low quality of teaching in the classroom within public schools. To add to it, the lack of competition faced by public schools removes any incentive for improvement.

Moreover, the Ministry of Human Resource and Development (MHRD) has created barriers to market entry for the private sector by imposing regulations which are uneconomical. For instance, as per the Right of Children to Free and Compulsory Education (RTE) Act, 2009, one of the basic requirements to attain the Certificate of Recognition for setting up schools is a Certificate of Land Ownership. This essentially means that the land ownership is a basic requirement for building a school that limits the entry of entrepreneurs with low capital. Hence, even if the provisions made for “free and compulsory education” under the the RTE Act have helped increase the demand for education, the supply side has been left unaltered.

In order to supplement the supply side in education sector, the MHRD needs to broadly ensure 3 C’s: competition, contestability and clarity.


One of the primary steps to improve primary schooling in India is increasing  the competition at the primary school level. An interesting way to acheive this would be by using the steps taken by the Punjab province of Pakistan as explained in the Economist article.

As per the article, the Chief Minister of the province, Shabaz Sharif has decided to not build any new schools and, instead funneled money to the private sector via an independent body, the Punjab Education Foundation (PEF). A scheme was started to help entrepreneurs set up new schools, particularly in rural areas, while another scheme gave vouchers to  incentivise parents living in slums to send children to PEF-approved institutions. These measures provided the impetus for an increase in the number of schools within the rural regions of the province.

On similar grounds, the 42,220 crore provisioned for the primary school level in the 2015 Budget can be allocated between funds for entrepreneurs setting up new schools and vouchers for low income families based on a pre-determined weightage.


As more of the infrastructure building and the supply of education is undertaken by private schools, public schools can provide contestability in order to reduce the oligopoly or monopoly of private players in the market. The private sector suffers from various problems such as low profit margins that hamper their sustainability, residual risk of poor financial management, and corruption. The MHRD can also utilise its larger resources towards regulating the private sector schools and only run schools in regions where private schools are not as profitable or prevalent.


Finally, it is important for the MHRD to set well defined objectives and outcomes. These objectives should be clear enough that each stakeholder in the education sector is given a precise and limited number of responsibilities which can be thoroughly evaluated at the end of a term. For instance, teachers at the pre-primary school level can be given targets on improving the reading skills of students. This would make them concentrate their attention on specific and attainable tasks. Also, clear goals and objectives would help the ministry avoid highly criticised and dubious polices such as the no retention policy upto eight standard in schools.

It is vital to note that one of the primary reason for the rise in private schools has been the realisation by Indians of the growing need for education in the increasingly globalised world. This increase in demand needs to be matched with a holistic growth in the supply  of education to ensure that India’s young population can be more productive in contributing to the growth of the country.

Devika Kher is a Research Associate at Takshashila Institution. Her twitter handle is @DevikaKher.

Image Source: Wikipedia

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What does it mean to be employable?

Why autonomous universities are essential to harness India’s demographic dividend

By Shobitha Cherian



India is currently in an extremely advantageous position, demographically speaking. Half of its burgeoning population of 1.27 billion people is comprised of individuals under the age of 25 and a quarter of the increase in the global working population between 2010 and 2040 is projected to come from the country. This so called ‘demographic dividend’ could be extremely beneficial to the Indian economy. According to the IMF, it could potentially result in an increase in the GDP growth rate by two percentage points each year for the next twenty years. However, in order to harness this demographic, it is necessary that this growing population also be productive and employable.

But what determines the employability of an individual? A lot of employers would say it is the extent to which a worker can utilise his attributes, skills or knowledge in order to contribute productively. So, in addition to a bare modicum of knowledge and skills, it is essential that workers are also capable of actually translating that expertise into productive labour. Unfortunately, such workers are far from being prevalent in India, and a vast amount of work is required before the majority of India’s young workforce becomes employable.

Higher Education in India: Vision 2030, a report produced by Ernst and Young for the Federation of Indian Chambers of Commerce and Industry (FICCI) states that 75 percent of graduates from Indian universities are said to be unemployable in the IT sector. This number decreases to 55 percent in manufacturing and 50 percent in the banking and insurance sectors. While graduates from the country’s top universities are much more capable, they comprise a small proportion of the national average. Overall, there is an apparent disconnect between the skills and knowledge of a majority of the Indian workforce and the needs of their respective industries. This must be rectified as soon as possible, otherwise India’s youth will age past the point of productivity without ever realising their potential.

One major problem with the current education system is that it churns out students that are theoretically proficient in their subjects but lack the ability to adapt and apply this knowledge to perform specific tasks required on the job. Theoretical know-how is relayed in isolation through prescribed text books and written examinations; this is not enough to understand practical or real world applications in their industries. The problem is particularly pronounced with science and engineering graduates; the ability to apply scientific theories to come up with practicable solutions is an absolute necessity in a job environment.

In order to ensure that students possess this ability, it is necessary that they are given expertise in the tools and practices actually used in their respective industries. In the United States, the Secretary’s Commission on Achieving Necessary Skills (SCANS) was appointed in 1990 to determine the skills needed for young people to succeed in the workplace. In its report, which is still widely used as a guideline for educational institutions in the States, it illustrates five competencies that all graduates must possess-

  • Knowledge of how to effectively allocate time, money, materials and human capital.
  • The ability to work on a team, teach, lead, negotiate, serve customers and work with people from diverse backgrounds.
  • Knowledge of how to acquire, evaluate, interpret and communicate data.
  • Knowledge of how to design and improve social, organizational, and technological systems.
  • Having the ability to effectively use technology.

It is vital that Indian universities adopt such guidelines when setting their curricula. In this regard, universities should be granted more autonomy in deciding their curriculums and with other such vital functions. The current framework empowers regulatory authorities to micromanage universities through various laws, rules and guidelines, often to poor results. This level of regulation makes it nigh impossible for progressive minded faculty to adopt more modern and practical curricula. This autonomy could be granted without detrimentally affecting educational standards by defining some basic pre-requisites for each university.

Creating a regulatory structure where universities are empowered to produce graduates that cater to industry requirements is the need of the day. Without it, the potential of the majority of India’s workforce will not be realised into actual contributions to the economy. Currently, the demographic dividend is closer to a non-performing asset about to turn into a liability.

Shobitha Cherian is an intern at the Takshashila Institution.

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Growing relations between India and Canada

Olivia Gagné

The Canadian Prime Minister Stephen Harper landed in India for his longest trip in a foreign country since his election victory of 2006. This reflects the growing interest Canada has been showing towards India over the last few years, keeping in mind its objective to diversify it’s trading partners and thus secure its future prosperity.

The current bilateral relations have great potential to be strengthened in many areas. A Comprehensive Economic Partnership Agreement (CEPA) is likely to be concluded next year between India and Canada, which would help reach the annual common fixed target of $15 billion in bilateral trade from the current $5 billion.

Canadian businesses clearly size the growing Indian market as a not-to-be-missed opportunity. In turn, India considers all that Canada has to offer with respect to the several challenges it is increasingly facing. Canada is an emerging energy superpower and could start exporting oil and liquefied natural gas to an energy-deprived India as soon as the required infrastructures to do so are installed. 99 percent of the Canadian hydrocarbons are sold to the United States of America, at a ridiculously cheap price. Canada has an obvious economic advantage selling it at higher prices, closer to the international ones and India is willing to pay this price to get Canada as a reliable supplier. Nuclear energy is also on the cards as both the countries signed a civil nuclear agreement two years ago.

Apart from the Indian conquest for energy security, the education of the current and future generations of Indians is a major challenge that could find part of the solution in better cooperation with the Canadians. Last year, 13000 Indian students went to Canada for education. Canada is seriously interested in welcoming more in the coming years for their intellectual capabilities. The Canadian post-secondary education is one of the best in the world as showed in a recent OECD report. The Canadian expertise could greatly benefit the Indian authorities on planning and managing public education. Canada also has extraordinary know-how in the environment protection field from which India has a lot to learn. In sum, the Canadian private sector is looking avidly at all the infrastructure needs in India and could help in achieving the considerable government spending of this sector.

The Canada-India relationship can also be strengthened if both countries engage together in other parts of the world for joint cooperation. For example, the aid sector in Africa offers many opportunities for this. Canada seriously needs to improve its image in this region as it failed to gain a seat in the United Nations Security Council (UNSC) in 2010 partly because it lost credit with the continent over the last few years. India is similarly seeking the African support for its bid for a UNSC permanent seat, and is obviously interested in accessing the resources of the area. The share of Canada’s development experience in Africa could help make India’s “new role” as a global donor much more effective. Together they could even plan triangular cooperation projects, which are an innovative approach to development, seen as highly effective and which would benefit each of the three committed parties.

The previous items of the bilateral possibilities might be part of the agenda on the prime minister Stephen Harper’s second official visit to India from November 3rd to 9th.

Olivia Gagné is a graduate student at the Université Laval and currently doing an internship at The Takshashila Institution.

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