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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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