Prime Minister's Council on TRADE & INDUSTRY

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

Report on
A Policy Framework for Reforms in Education



India faces two major challenges in her path to progress – income poverty and information poverty.

8.1 Income 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 40 crores people in India facing income poverty. Poverty and illiteracy go hand in hand.

At the lower level are 8 crores subsistence farmers in India, with income less than 8,000 rupees a year. They are caught in a low skill, low investment, low productivity, low income trap. This group has no marketable skills other than labour. They can be set free from the poverty trap by providing wage-employment and access to training and education.

At the higher level are 32 crores people, mostly in the rural and farm sector, with income levels between 8,000 to 12,000 rupees per year. These people have trade-related skills with limited marketability and have some access to primary education and health. They can be freed from the poverty trap by upgrading skills sets, providing access to education and by providing job employment.

India has to visualise education, apart from economic growth and development, as a means of liberating the poor from deprivation and poverty.

8.2 Information 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.

8.3 Education Centric Development

As the information age envelops the world, India has to pursue a path of education centric development. Such a development would have to create millions of knowledge farmers and knowledge workers 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.

An education centric development will generate millions of new knowledge based jobs and add several hundreds of billions of dollars to economic output. It would also 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.

8.4 Role of the State

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 and allocated against all odds.


8.5 Revolution, Not Reforms

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. 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.