Missing links in PPP for education

 India’s public school education is provided through a network of primary, upper primary and secondary (including higher secondary) institutions run by the Central and state governments, and rural and urban local bodies.

These institutions are owned, managed and financed through budgetary resources. Sarva Shiksha Abhiyan and mid-day meal programme are the most popular national programmes in school education. 

Public sector is most dominant at lower levels of education as it is responsible for almost 90 per cent of primary, 72 per cent of upper primary, and 42 per cent of secondary education.

Given wider and freer access with instructional and non-instructional incentives and subsidies, public sector will have to be the essential source of school education, especially for the rural poor and other vulnerable and marginalised sections of society. This underlines the needs for strengthening public school education to accomplish the objectives and targets of ‘inclusive growth’ under the on-going 11th Five Year Plan.

Most recently, the Union ministry of human resources development has come up with new national policy proposals on strengthening public school education through public-private partnership (PPP) arrangements. it has important implications for the future ownership, management and financing of public education system and deserves informed public debate by all stakeholders.

Existing model
Private education sector (comprising aided and unaided institutions) is widely appreciated for its complementary and supplementary contributions by building physical infrastructure and provisioning of services in both rural and urban areas. Aided schools are governed by grants-in-aid policy of the state governments as in Karnataka. In general, aid is limited to expenditure on salary and wages. Admission and fee structure are regulated by the government in aided schools. In fact, an aided school can be considered as a standard model of existing PPP in Indian school education.    

In essence, the new proposals are aimed at private financing of infrastructure facilities (e.g., office buildings and classrooms, water, sanitation and power), support services (e.g., ICT for teaching-learning activities, labs, transport and food), and education services (e.g. recruitment but not appointment of teachers and staff) in the existing and/or new public schools.
Financing and management of these facilities and services may be bundled or unbundled. Options are open for the government to provide land on long term lease basis. Private costs are proposed to be paid by the government on unit cost or per student basis. If a plausible model of PPP is BOOT (build, operate, own and transfer), then the government may claim the ultimate ownership of all assets created.  
The new proposals mainly aim at different methods of cost-sharing between public and private sectors. They seem to have been heavily drawn from PPP models for economic infrastructure, such as, roads and highways, bridges, power and telecommunications. They are built on cardinal principles of corporate governance in terms of resource efficiency, accountability for performance; risk sharing, quality monitoring and flexibility.

However, reality demands that social infrastructure like public school education and economic infrastructure like pubic road construction are inherently different and cannot be equated for privitisation purposes.
New proposals implicitly neglect the critical issues relating to cost recovery, except for payment of private costs by the government though budgetary resources or through cross-subsidisation by allowing private sector to charge differential fee to the management quota students. This implies that students and parents would not be burdened with any additional costs in schools under PPP. In a way, this needs to be a guarantee clause in all the new proposals. Otherwise, access, affordability and equity objectives of public school education would be questionable and cannot be ensured. 

PPP model has gained credence because of lack of adequate public resources to meet the growing needs of quality school education.  At the same time, no new proposal would free the government from financing school education. Thus, a stronger proposal is needed to justify the different methods of PPP by way of estimation of their relative public costs and benefits including cost savings. This needs financial database on private education to be newly created in India as well as in Karnataka. 

Privitisation is becoming more global in India. Higher education is being opened up for global investments and competition. GATS in education under the WTO may not include school education.
(The writer is professor of economics, ISEC, Bangalore)