Can it work?

Reservation for poor students

The Right to Education Bill has now been passed by parliament. One important provision of the bill requires that all private schools will have to provide 25 per cent reservation to poor students in admission. The government will compensate the schools for this quota of admission. What are the possible implications of this government-funded reservation initiative in private schools?

In principle, this is a laudable initiative since the poor students will have access to better quality education in private schools (which they can not afford otherwise) than is available in most government schools. Education is often the only means available for the children of poor families to break away from the poverty trap.

The government will compensate the private schools at the rates charged by government schools which are much lower. That means cross subsidisation of poor students by the remaining 75 per cent students who will have to pay higher fees to cover the shortfall. It is like imposing an additional education cess on them, on top of the education cess that they are currently paying as income tax payers.

The question is: why should the government not pay for the full cost from general tax revenues, instead of specifically taxing the parents of children going to private schools? Not all of them are rich. They would have liked to send their children to less expensive government schools, if those schools were not so bad. In a sense, they are being doubly penalised.

Next is the issue of demand and supply. The supply of good quality private schools is less than the demand for them. Further, the supply is concentrated more in cities and in certain parts of them. If students are forced to go to only the neighbourhood schools, many poor but meritorious students will be compelled to join relatively bad quality private schools available in their poor neighbourhood.

The same problem exists in the USA. The quality of inner city schools are much worse than in the suburbs. But the poor families living in ghettos in the inner city are condemned to worse quality neighbourhood schools which makes it more difficult for them to compete later with products of better quality suburban schools. The same may happen here in India, perpetuating the class divide that the initiative seeks to bridge.

There are some areas (specially in slums) where there are very few private schools.
Twenty-five per cent of seats in such schools would be totally inadequate to accommodate the huge number of poor students living in those localities. So, the provision may mean nothing to lots of poor students living in such areas. The availability of government funding to pay for the education of the poor students may attract some profit seekers to start private schools in such places. However, given that those schools would be catering only to poor slum dwellers and hence cannot be cross subsidised by rich parents, the quality of facilities provided would be correspondingly low.

Inequality rules

The integration of poor students coming from weaker economic and social backgrounds with the better-off students in private schools would be a problem area. It remains a problem even among the more mature students of IITs and IIMs. The deficiency in school education (even in reputed private schools) is often remedied by richer students by taking private tuitions in tutorial homes which the poor students would not be able to afford.

So, the initial difference in background and preparedness between the two groups of students would get further accentuated over the school years, unless special remedial programmes are compulsorily provided to the weaker students by the school authorities on a continuing basis.

The sharing of the financial burden of this new provision between the Central and state governments will be a thorny issue, perhaps to be sorted out by the already overworked Finance Commission. It cannot be fully funded by diverting money from the Sarva Siksha Abhiyan, which provides for free education till class 8 whereas the new scheme presumably covers education till class 12.

Finally, who is going to decide who qualifies as ‘poor’ or  ‘economically weaker?’ Will there be a repeat of the OBC politics? Given the vote-bank politics ruling everywhere, political parties may  start competing with one another to extend the definition of economically (or socially) weak.

Going by income statements often turns out to be a farce in India. There is no official record of income for agricultural families, self-employed or small business people who do not pay income tax. Children from such families can easily qualify as economically weak by producing whatever income statement is required to qualify as ‘poor.’ As is well known, the number of BPL cards already issued in some states is much more than the number of people below poverty line as estimated by official statistical agencies.

All these issues will have to be addressed, if the initiative has to contribute significantly to the goal of inclusive growth. Otherwise, India would continue to remain a paradox which can produce half a dozen Nobel Laureates, while 40 per cent of the population are illiterate and unemployable in any modern occupation.

(The writer is a former professor of economics at IIM, Calcutta)

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