Special Subject Group on
Policy Framework for Private Investment in
Education, Health and Rural Development

Report on
A Policy Framework for Reforms in Education

A POLICY FRAMEWORK FOR REFORMS IN EDUCATION

Mukesh Ambani (Convenor)

Kumarmangalam Birla (Member)

SPECIAL SUBJECT GROUP ON

POLICY FRAMEWORK FOR PRIVATE INVESTMENT IN

EDUCATION, HEALTH AND RURAL DEVELOPMENT

PRIME MINISTER’S COUNCIL ON TRADE AND INDUSTRY

GOVERNMENT OF INDIA

New Delhi

April 2000

PREFACE

We are happy to present this report titled ‘A policy framework for reforms in the education sector’ to the Prime Minister’s Council on Trade and Industry, Government of India. We are grateful to the Prime Minister for this opportunity and for the honour.

The challenge that we face in education in India is to bridge the large gap between the education have nots and the haves while, simultaneously, radically upgrading education content, delivery and processes to foster a competitive, yet co-operative, knowledge based society. Given the magnitude of the challenge and the complexities involved, this will call for a national mission unprecedented in the history of mankind.

We have to fundamentally change our mindset - from seeing education as a component of social development to realising that it is a means of creating a new information society, resplendent with knowledge, research, creativity and innovation. It is not a social expenditure but an investment in India’s future. The education opportunity before us is right, so funds have to be made available under any circumstances. Neglect of education will turn out to be India’s nemesis.

This is not the time for just reforms. It is time for a revolution – a knowledge revolution. The green revolution in agriculture ushered in high productivity and prosperity through technology, education of farmers and field extension activities. Likewise, a revolution in education that embraces information technology, fosters freedom and innovation and induces a market oriented competitive environment is vital for our future. The need of the hour is for bold steps, not incremental and tentative ones.

With this perspective, we commend the recommendations in this report.

We thank officials in the Prime Minister’s office for their support and acknowledge the insights provided by a number of educationists, social scientists, policy planners and the Business Intelligence Unit, Chennai in the preparation of this report.

New Delhi Mukesh Ambani

April 24, 2000 Kumarmangalam Birla

ACKNOWLEDGEMENTS

CONTENTS

LIST OF TABLES

LIST OF EXHIBITS

LIST OF ABBREVIATIONS

EXECUTIVE SUMMARY

Education imparts knowledge and skills and shapes values and attitudes. Education is vital for progress of a civil society. Education is universally recognised as an important investment in building human capital. Human capital affects growth in two ways. First, human capital levels act as a driver of technological innovation. Second, human capital stocks determine the speed of absorption of technology. It is now widely accepted that human capital, and not physical capital, holds the key to persistent high growth in per capita income.

Education is becoming even more vital in the new world of information. Knowledge is rapidly replacing raw materials and labour as the most critical input for survival and success. Knowledge has become the new asset. More than half of GDP in the major OECD countries is now knowledge based. About two thirds of the future growth of world GDP is expected to come from knowledge led businesses.

A study of the education systems in Sweden, Singapore, South Korea, Thailand and China offers a number of insights for shaping India’s education development. The emphasis from the government has to be on primary education. It is important that primary education be made universal, compulsory and free. The other important lesson is that there should be a mix of government and private initiatives, with direct participation from both.

A study of the current education system in India shows that India’s education system is highly skewed. Our literacy rates are not only low, but also highly skewed on gender, state wise spread and urban-rural spread. Programmes and schemes launched by Government of India and State Governments to improve the education system and literacy rates, have had varying degrees of success. India has excellent examples of institutions at all levels of education to demonstrate its capability. But below this elite crust there is not much to speak of and the road ahead is challenging.

While the larger world embraces the information age, the world of education in India encompasses different ‘worlds’ that live side by side. One world includes only a fortunate few with access to modern institutions, computers, Internet access and expensive overseas education. A second world wants to maintain status quo – teachers, administrators, textbook publishers, students – all have reasons to prefer things to remain as they are or change only gradually. The third world struggles with fundamental issues such as no books, wrong books, teachers desperately in need of training, teachers’ with poor commitment, rote learning of irrelevant material, classrooms with hundred students, dirty floors and no toilets. India cannot hope to succeed in the information age on the back of such three disparate worlds.

As the developed world moves to forging an information society founded on education, India cannot remain behind as a non-competitive labour oriented society. India has to envision to being a competitive knowledge economy. India has to create an environment that does not produce industrial workers and labourers but one that fosters knowledge resources. Such resources must be at the cutting edge of knowledge, be competitive and innovative. Education development has a major role to play in shaping knowledge resources and, in turn, placing India in the vanguard in the information age.

The imperative for India is to raise standards of the vast majority with poor education, break the education sector free from its inertia and forge a society that places knowledge as the cornerstone of its development. At the same time, It is difficult to envisage the Indian society, with its ethos centred on family values and caring, being in a purely competitive mould. The tradition of co-operation and coexistence in India, among diverse communities, religions and languages and regions, has to be sustained.

Therefore, a vision for education in India has to inspire creation of a knowledge-based society, induce competitiveness, yet foster a sense of co-operation. Thus, the vision for education in India would be " TO CREATE A COMPETITVE, YET CO-OPERATIVE, KNOWLEDGE BASED SOCIETY. "

Several strategic objectives would have to be pursued in order to realise this vision.

Provide quality primary education facilities to every citizen of India, preferably within a distance of one kilometre from his residence.

Provide and support the private sector in the establishment of high quality, secondary education facilities in every taluka.

Encourage the establishment of world class higher education facilities at every district head quarters.

Encourage the creation of state-of-the-art professional research based education institutions in all disciplines.

Encourage institutes of education for physical education and education for the challenged.

Integrate education with information and communication technologies to:

create smart schools,

network and deliver education and training,

institutionalise distance education,

Create and maintain data bases, and

continuously analyse trends.

Develop human resources required for the education process.

Continuously upgrade educational content in multiple media.

Create institutional linkages to other sectors of social development such as health and rural development.

Motivate non-resident Indians to participate in India’s education programmes on a voluntary or sabbatical basis.

Market India as a destination for affordable, high quality education.

The following guiding principles must permeate the pursuit of the above strategic objectives:

Provide universal, compulsory and free primary education

Foster a healthy mix of state supported education with private initiatives.

Costs of education must be affordable to the under privileged sections of society.

Quality of education must be continuously monitored and upgraded to ensure high standards.

User pays principle to be enforced strictly for higher education supported by loan schemes as well as financial grants for economically and socially backward sections of society.

To achieve the above vision, the existing system needs to be reformed. The recommendations for reforms are presented in the next section titled, ‘Summary of Recommendations’.

Looking into the future, the recurring expenditure on education in the year 2015 would be Rs 1,80,000 crores. The capital expenditure would be Rs 88,900 crores spread over the next 15 years. This is based on population projections to the year 2015 and working on the basis that the goals of an education policy would be to universalise education in the age group 5-14, achieve a 75 % enrolment rate in higher secondary (age group 15–19) and a 20 % enrolment in colleges and professional education (age group 20-24).

The projected expenditure on education to meet the above goals works out to three times the current expenditure. The Government’s share would amount to Rs.117, 099 crores. At a projected growth rate of 8 % GDP, the total education expenditure would be 3.15 % of the GNP in 2015. The public spend would account for 1.98 % of the GNP. The total population that would have achieved tertiary education will between 5.6 % and 9.8 % depending on a GDP growth rate of 6% or 10% per year respectively. The total number of teachers in all sectors would have to more than double from the existing 49.25 lakhs to a range of 93.47 lakhs to 119.15 lakhs.

The additional expenditure may appear large. However we have not given the requisite importance to education. For example, the average annual plan expenditure on education (1992-97 plan) was Rs.3,920 crores and the annual losses of all state electricity boards (1997-98) was Rs.10,684 crores which is 2.72 times the average annual plan expenditure on education.

Funding the huge expenditure demand should be by both an increase in quantum of public spending as well as increase in efficiency of public spending on education. Government has to reallocate public spending to education from other publicly funded activities such as defence and inefficient public sector enterprises. Private financing should be encouraged either to fund private institutions or to supplement the income of publicly funded institutions.

There are basically three mutually reinforcing methods that could overcome some of the problems in financing education. The first method is to recover the public cost of higher education and reallocate government spending on education towards the level with the highest social returns, i.e. in primary education. The second method is to develop a credit market for education, together with selective scholarships, especially in higher education. The third method is to decentralise the management of public education and encourage the expansion of private and community-supported schools.

India currently faces two major challenges in her path to progress – income poverty and information poverty. Income poverty arises due to poor skill sets, low access to material and knowledge resources, exploitation by intermediaries and environmental degradation. There are about 400 million people in India facing income poverty. Poverty and illiteracy go hand in hand. India has to visualise education, apart from economic growth and development, as a means of liberating the poor from deprivation and poverty.

While India has a huge task of alleviating income poverty, she faces an equally formidable prospect of falling into information poverty. Almost all emerging technologies – biotechnology, communications, automation, advanced materials and so on – are information intensive. The delivery of these technologies as well as of services is also information intensive. If India does not bring about an information revolution, she will face a new dimension of information based poverty. The information age will create a new class of the knowledge poor.

India has to pursue a path of education centric development. Such a development would have to create millions of knowledge based human resources as part of a national mission. At the same time, it would have to significantly enlarge the pool of professionals demanded by a large knowledge economy. It would have to generate millions of new knowledge based jobs and add several hundreds of billions of dollars to economic output. It should use new learning technologies, in information and communication, as a powerful cost effective medium for delivery of knowledge to the smallest and remotest of villages for social and economic development.

The state has a vital role to play in bringing about an education centric development. Government must focus strongly on primary and secondary education and leave higher and professional education to the private sector. It must not only use information and communication in the delivery of education but also foster an environment conducive to the widespread use of such technologies. It must correct the serious distortion in the current system, that the best ten per cent of the educated corner sixty per cent of subsidies. There is no getting away for the Government from enforcement of the Constitutional obligation for compulsory education for children up to the age of fourteen years. Funds required for universal education must be raised against all odds and allocated.

The education sector has been largely neglected in India. This neglect can turn out to be India’s undoing and nemesis in the information age where knowledge, research, creativity and innovation will be at a premium. Education oriented to foster a knowledge-based society can place India at the vanguard of nations.

This is not the time for just reforms. It is time for a revolution – an information revolution. The green revolution in agriculture ushered in high productivity and prosperity through the use of technology. Likewise, a revolution in education that embraces information and communications technologies, fosters freedom and innovation and induces a market oriented competitive environment is vital for progress and prosperity in the information era.

The need of the hour is bold steps, not marginal and tentative ones. For fortune, they say, favours the bold.

SUMMARY OF RECOMMENDATIONS

1 Primary and Secondary education

Make primary education compulsory and free. Primary education must be on top of the education agenda. Secondary education must be compulsory as well. There is no getting away from enforcing the Constitutional commitment to compulsory education for children up to the age of fourteen years.

2 Teaching

Bring about regulations for continuous teacher training and quality upgradation.

3 Technology

Leverage our vast and growing resources in information technology to bring about smart schools that integrate computers, networks and content.

4 Sensory Learning

Migrate from teaching to ‘sensory learning’ in pre-schools and in primary education order to provoke curiosity. The accent must be on fostering creative joy and healthy psychological development.

5 Learning to Learn

Emphasise learning through practices and experiences. Transform teacher’s role to one of a facilitator.

6 Vocational Education

Introduce compulsory vocational training in an intensive manner from the secondary level onwards.

7 Distance Education

Promote distance education as an alternative system of education on par with the formal system of education.

8 Value Systems

Emphasise value education at pre-primary level and reinforce it in primary, secondary and higher education.

9 Common National Content

Introduce a common national system for educational content at the school level, after providing for regional and local variations, especially with respect to languages, history and culture.

10 Decentralisation of Management

Decentralise education management. Devolve to the Panchayat level financing and management of education at the primary and secondary level as well as literacy programmes.

11 Common Admission Tests

Institute a common system for admissions to professional courses based on national standardised tests on the lines of SAT, GRE and GMAT. Concurrently, abolish the system of migration certificates and allow students to move from one institution to another based on a system of transfer of professional credits.

12 Market Oriented Education

Encourage schools of learning to constantly upgrade content and facilities to make them more market oriented.

13 Education Infrastructure – Hardware

Fund infrastructure for government schools – buildings, telecom networks, and computers – on a priority basis. Progressively reduce the funding for universities and make them adopt the route of self-sufficiency, to achieve this.

14 Education Infrastructure – Content Development

Continuously reflect latest advances in content development. Utilise evolving tools and techniques for developing content that is contemporary.

15 Government Role

Confine the responsibility of the Government to:

funding and ensuring that primary education is compulsory and free,

funding and ensuring that secondary education is compulsory,

funding and bringing about 100% literacy,

supporting disciplines that have no market orientation,

selectively supporting and part funding centres of higher learning,

providing financial guarantees for student loans,

ensuring uniformity in content and quality, and

education development planning.

16 Government Controls

Give institutions not depending on government for funding or having low levels of funding to have operational freedom and flexibility to innovate.

17 Private Universities

Legislate a Private University Bill to encourage establishment of new private universities in the fields of science and technology, management and finance areas.

18 Rating System

Institutionalise a system for periodical rating of all educational institutions in India – schools, colleges, institutions and universities- by independent agencies analogous to a Standard and Poor’s or CRISIL in the financial sector.

19 Foreign Direct Investment

Allow foreign direct investment in education. To begin with, limit this to science and technology areas.

20 Financing

Establish an education development fund for primary and literacy education. Exempt donations to this fund from income tax. Concurrently, develop a credit market for higher education to finance the cost of education.

21 Marketing Indian Education Abroad

Encourage Indian institutions and universities to attract overseas students. Initially, establish international schools in all our existing centres of excellence, which have international reputation.

22 Politicisation

Enable all political parties come to an understanding that they will keep away from universities and educational institutions. Ban any form of political activity on campuses of universities and educational institutions.

23 Education and Economic Freedom

Keep the economy free from controls to foster new opportunities that creates a market for education.

24 Research in Education

Encourage research right from undergraduate level in all fields.

25 Physical Education/ Extra-curricular activities

Encourage sports activities by providing the necessary infrastructure from the primary school level. Encourage extra-curricular activities at the primary and secondary levels by setting aside one day per week (preferably Saturdays) for this activity.

26 Upgrade RECs/ ITI s

Upgrade the curriculum, infrastructure and facilities in the RECs and Industrial Training Institutes to meet the envisaged higher demand for skilled technical manpower. Provide higher autonomy and freedom to these institutes.

27 Trained Teachers

Make trained teachers serve for a specified period in the rural areas as part of their development.

28 Alternative Education Opportunities

Introduce a variety of programs to provide alternative education opportunities for working and underprivileged children such as flexible schedules

 

Summary of the report