The proposed law on the right to education seems close to getting parliamentary approval. The central idea behind providing quality education to all children in the 6-14 age group is that all private schools, aided and unaided, will admit 25% of entrants under a government-paid scheme. This is a quasi-education voucher scheme by another name. The government will pick up (part of) the tab for a select number of children in every private school. This is better than the government directly spending money to provide education. This is also a way to make opportunities more equalised?access to reasonably good schools is becoming India?s biggest class differentiator. That children from economically disadvantaged families are also included in the list of beneficiaries means that this quota will be more meaningful than the usual ones. But a great deal of thinking has to be done on this after the law is passed. It seems the neighbourhood criteria will apply and the local administration will select the children. This will create supply-demand mismatches?some areas with too few private schools for the 25% quota to have a meaningful impact. Will government financing of the quota students create a market demand for more private schools? That will depend on the cost of supplying good education and education entrepreneurs? freedom to set profit-making prices. Here, local regulations on school fees are relevant. They are also relevant for private schools whose cost-per-student is higher than what the government will pay. Three-quarters of the fee-paying students can cross-subsidise the quota quarter. But fees for those 75% should be flexible. If the quota students are selected by the local administration, the possibility is that another market for regulatory discretion will be created. A truly random process must be in place. There may be problems with minority institutions providing primary education?the applicability of the 25% quota may be challenged. The funding mechanism of this idea has now been made the responsibility of the Finance Commission. Unless everyone agrees to pay their share and the money is found, this will be another ineffective law.
So, there can be problems, but this is an idea worth experimenting with because the other idea?government provision of primary education?hasn?t worked. The enrolment ratio in India may be an impressive 94.9%, but the drop-out rate is over 48%. Plus, the quality of education provided even to those who finish primary schooling in the government system is suspect. If this idea works?a fairly big if?government-funded private education can be extended: basically the system of education vouchers replacing government spending on providing education directly.
