Vibhuti patel economics of eduation

Economics of Education: Crucial Concerns
Vibhuti Patel
Dr. Vibhuti Patel, Director, Post Graduate Studies and Research, Prof. &
Head, PG, dept. Dept. of Economics, SNDT Women’s University, Mumbai-
400020 is a social scientist with multi disciplinary concerns. In this paper she
discusses the issue of poverty and education that provides crucial background
for understanding and utilizing Right to Education Act, 2010.

Abstract

Discussion on economic aspects of education has acquired great significance
in education research during the new millennium earmarked as Knowledge
Economy. Education for the Knowledge Economy (EKE) refers to efforts at
production of the highly skilled and flexible human capital needed to compete
effectively in today’s dynamic global markets. Experiences of last one decade
in the IT enabled BPO sector has proved India’s ability to produce and use
knowledge as a major factor in economic development and has proved to be
critical to India’s comparative advantage. Economists have recognized
importance of EKE to develop a workforce that is well-trained and capable of
generating knowledge-driven economic growth.

Economics of Education analyzes both what determines or creates education
and what impact education has on individuals and the societies and economies
in which they live. Historically a great deal of emphasis has been placed on
determining outcomes to educational investment and the creation of human
capital. The primary mission of the economics of education group is to identify
opportunities for improved efficiency, equity, and quality of education and
promote effective education reform processes, to enhance knowledge of what
drives education outcomes and results; to better understanding how to
strengthen the links of education systems with the labour market; and to build
and support a network of education economists for education policy planning
and evolve structures and mechanisms for implementation.

Introduction

The prevalent view that public resources for education in developing countries
should be reallocated from higher to lower levels of education is backed by
massive budgetary allocation for universalisation of primary education. There

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may be a case for maintaining and even increasing spending on higher
education, as long as public funds can be directed to research and other “public
good” functions of institutions of higher education. Current measures of social
returns to primary, secondary and higher education do not reflect unmeasured
social benefits at each level; since we do not know the relative size of these
benefits across levels, we do not know the true ranking of social returns across
primary, secondary and higher education. The true social rate of return to
certain components of higher education, such as research and postgraduate
training in science and technology, and creation of other skills where social
returns probably exceed private returns (such as public administration) is
probably high, and in some settings, may now be as high or higher than the
social rate of return to primary and secondary education. Moreover, achieving
and sustaining adequate levels of quality to capture these social returns
requires minimal stability in public financing, arguing against major
reallocations away from higher education. But this does not argue for more
public spending on all higher education programs. On the contrary; within the
envelope of total public spending on higher education, reallocation away from
public spending on undergraduate training makes sense, since such training
probably has low cost compared to private returns, and can be accomplished
by greater reliance on private universities and by increasing tuition and other
fees in public universities, while ensuring equitable access through loan and
scholarship programs.

A Knowledge Economy Framework

A Knowledge Economy is one that utilises knowledge to develop and sustain
long-term economic growth, thus the Knowledge Economy framework focuses
on four pillars which it suggests are needed to support a successful knowledge
economy.

The first pillar of the framework is an economic and institutional regime that
is conducive to the creation, diffusion, and utilisation of knowledge. A regime
that provides incentives that encourage the use and allocation of existing and
new knowledge efficiently will help to foster policy change. The economic
environment must have good policies and be favourable to market transactions,
such as being open to free trade and foreign direct investment. The government
should protect property rights to encourage entrepreneurship and knowledge
investment.

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The second pillar is a well-educated and skilled population that creates,
shares, and uses knowledge efficiently. Education, especially in the scientific
and engineering fields, is necessary to achieve technological growth. A more
educated society tends to be more technologically sophisticated, generating
higher demand for knowledge.

The third pillar is a dynamic information infrastructure that facilitates the
communication, dissemination, and processing of information and technology.
The increased flow of information and knowledge worldwide reduces
transactions costs, leading to greater communication, productivity and output.

The final pillar is an efficient innovation system of firms, research centres,
universities, think tanks, consultants, and other organisations that applies and
adapts global knowledge to local needs to create new technology. The
generation of technical knowledge leads to productivity growth.

The Knowledge Economy framework suggests that to be effective knowledge
economies in which knowledge is created, disseminated and used well,
economies have to have four pillars in place. Policy advice would focus
attention on which of the pillars is in particular need, in terms of appropriate
policies, institutions, investments and coordination so that countries can
develop a knowledge economy and sustain long-term economic growth.

Education-Economy Interdependencies

The 1986 education policy had resolved to raise investment in education such
that it will reach at least 6% of GDP by the year 2000. This unfulfilled resolve
was incorporated in the UPA’s Common Minimum Programme in May 2004.
Yet, as percentage of GDP, India spent less on education in 2005-06 (less than
3.5% of GDP) than what it spent in 1985-86 when the policy was passed by the
Parliament. This is despite the fact that the Government had levied 2%
Education Cess and raised almost 35% of the resources for Sarva Shiksha
Abhiyan from international funding agencies.

What the country needed in 1991 – five years after the 1986 policy – was a
firm resolve to first rapidly fill up the cumulative gap resulting from
continued underinvestment and then maintain the elusive investment level of
6% of GDP in the following decades. Nothing short of a radical departure was
long awaited in order to energise and restructure the entire education

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system along with its curriculum. Yet, what the global market forces
persuaded the Indian State to do in the 1990s was precisely the opposite of
what was directed by the Constitution and resolved by the Parliament in the
1986 policy. The undeclared but operative strategy was to “let the vast
government education system (from schools to universities) starve of funds
and, consequently, deteriorate in quality.” As the quality would decline,
resulting in low learning levels, the parents, even the poor among them, would
begin to withdraw their children from the system. A sense of desperation and
exclusion from the socio-economic and political space in the country would
prevail. More importantly, the people’s faith in the Constitution and the
capability of the State to fulfill its obligations will be shaken up, thereby
leading to a cynical view of the nation-state. This will lay the groundwork for
appreciation of market as a means of solving people’s problems. The neo-
liberal economist and advocates have long striven for precisely this goal:
measured weakening of the State and increasing credibility and power of the
market.

Economic Analysis of Education Interventions: Equity, Equality &
Efficiency Dimensions

In mainstream economic analysis, education is seen as a production process in
which inputs (e.g., students, teachers, and textbooks) are combined to yield
desired outputs (e.g., student learning) within the education sector, and larger
societal outcomes outside the sector (e.g., increased earnings in the workplace
or greater social equality), under the prevailing educational technology
(encompassing pedagogy, curriculum, and school organization) and input
prices. A major application of economic analysis is to inform decision-making
in education in order to improve efficiency in educational production; that is,
producing more desired education outputs and outcomes given educational
resources. Analytically, educational efficiency can be distinguished as internal
efficiency and external efficiency. Internal efficiency relates educational
outputs to educational inputs, while external efficiency relates educational
outcomes to educational inputs. Analysis of educational efficiency is not
confined to economic concerns only, since educational outputs and outcomes
also pertain to social and political dimensions of national development.

The internal efficiency of education is improved when more education outputs
are produced at given education resources or fewer education resources are
used in producing the same amount of education outputs. Thus educational

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economic analysis is centrally concerned with the production of education
outputs and with education costs.

There have been different views on whether increased economic growth and
improved social equity could coexist. Using the experience of eight East Asian
economies, the World Bank concluded in a 1993 publication that growth with
equity was possible. This study made a guarded but positive assessment of the
role of education: education was only one of many contributing factors to
growth with equity but appropriate education policy did matter, especially in
terms of adequate investment in education and the focus of government policy
on lower levels of education. The financial crisis that began in 1997, however,
underscored the importance of non-education factors that could affect the
health of the economy in these nations.

Earlier efforts in promoting education for poverty reduction have been
accompanied by high hope and disillusionment. The urgent need for poverty
reduction in the developing world is reflected by the World Bank's redefining
itself as a poverty-reduction organization. There is common understanding in
the early twenty-first century that "quality basic education for all" is an
important part of the overall strategy for poverty reduction. But education
alone is not sufficient; rather a multisectoral approach involving related
interventions in agriculture, education, health (including addressing the AIDS
epidemic), credit market for small producers, and other social sectors, is
needed. Poverty reduction also requires targeted interventions. Women are one
of the most important targeted groups because they are often subject to
multiple disadvantages in the developing world. Increasing educational access
and improving quality for girls could have profound economic, social, and
political benefits for women and for society
Since mid sixties (Kothari commission), Economists have recommended
serious consideration of vocational education through imparting skills in
partnership with industry. (Pethe, 2008).
Education as consumption and as investment education as a private and
social investment

a. Human Capital Formation

Returns to investment in education based on human capital theory have been
estimated since the late 1950s. In the 40-plus year history of estimates of

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returns to investment in education, there have been several reviews of the
empirical results in attempts to establish patterns. Many more estimates from
a wide variety of countries, including over-time evidence, and estimates based
on new econometric techniques, reaffirm the importance of human capital
theory.

According to human capital theory, education is a form of human capital that
could raise the productive capacity of individuals in economic production.
Empirical studies in agriculture found a positive and significant relationship
between productivity and education. At the macro level, education was also
associated with economic growth. Spending on education can be seen as an
investment activity with both costs and benefits, and thus subject to a cost–
benefit analysis. (Kamdar, 2006). A review of rate of returns studies, such as
the 1994 study of George Psacharopoulos, found that in developing nations
education had a high rate of return and that the return was higher at lower
education levels. Paul Bennell, however, has criticized these studies, in terms
of appropriateness of method and quality of data. Some analysts, such as
Ronald Dore, point out that educational expansion in a depressed economy
could lead to unemployment of the educated or over-education. Nevertheless,
there is increasing consensus across nations that human capital, particularly in
terms of problem-solving skills, communication skills in a diverse setting, and
the ability to adapt to change, can enhance economic competitiveness in the
global economy of the twenty-first century. There is also increasing attention
to investment in preschool education and in education for sustainable
development.

b. Human Development Approach

The human development approach emphasizes that people's ability to read and
write, be knowledgeable, capable and healthy should be considered as ends in
themselves, with positive effects on labor productivity, physical environment
and reduced poverty as welcomed consequences. It further indicates that
human development sees education as a value in itself and as a means. As a
value in itself, education counts for developing human personality, self-
learning ability, objectivity, tolerance and the willingness to participate in all
aspects of human development. As a means, education is a powerful
instrument of achieving and sustaining economic growth, reducing poverty and
enhancing equity. (UNDP, 2001).

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• Education, human development and the capability approach
Developing children to be self governing adults
• Developing economic participation
• Developing human flourishing
• Developing citizens with a sense of justice and reciprocity
• Putting human beings at the centre as ends not means, enlarging
choices
c. Education as Social Infrastructure

A comprehension of infrastructure spans not only these public works facilities,
but also the operating procedures, management practices, and development
policies that interact together with societal demand. (Ghanghas, 2008). The
Social Infrastructure in India includes the education system in India, health
care, the management of the education and health services in India that form
the basic social infrastructure definition. This priority aims to improve the
infrastructure for skill-based education and lifelong learning. The activities
provide support for developing infrastructure related to formal and non-formal
education, including ICT development in schools, development of higher
education institutions, non-formal learning spaces and multi-functional
community centres.

Economics of Inequality in Education

The costs of education refer to resources utilized in the education production
process; they include not only government expenditure on education, but also
household spending on education and the foregone opportunities of schooling
(e.g., gainful employment). Education cost studies range from macro-analysis
of national educational expenditures across nations to microanalysis of
educational decision-making by individuals and households. Cross-national
studies have found that government spending on education (as a percentage of
national output) has declined in the developing nations since the 1980s, after a
rising trend in the 1960s and 1970s. Studies in a number of developing nations
have shown that private spending on education is a significant part of the total
spending on education, and that private costs are an important source of
educational inequality and inequity in these nations. In addition, household
education costs could be a heavy economic burden on poor and rural
households, resulting in negative educational consequences such as dropping
out. Financial assistance targeted at poor and rural populations should be part
of the overall strategy to improve school attendance for marginalized

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population groups. There is a need to carefully estimate the costs of
educational inclusion of marginalized groups because such costs tend to be
quite different from those for nonmarginalized groups.
There is little denying the fact that investing in human capital is one of the
most effective means of reducing poverty and encouraging sustainable
development. Yet, women in developing countries usually receive less
education than men. More so, women in general enjoy far less employment
opportunities than men the world over.
Any claims and efforts then, to remove poverty, can show results only if they
address the issue of gender inequality. In recent decades, there have been large
gains, no doubt on comparable levels, in basic rights and opportunities, in life
expectancy and enrolment ratios for women. But despite these gains, the stark
reality has not changed. There still are large gender disparities in basic human
rights, resources, and economic opportunity, and in political rights- the world
over.
The foremost factor limiting female education is poverty. Economics plays a
key role when it comes to coping with directs costs such as tuition fees, cost of
textbooks, uniforms, transportation and other expenses. Wherever, especially
in families with many children, these costs exceed the income of the family,
girls are the first to be denied schooling.
All this despite the fact that educating girls is one of the best investments a
society can make. An educated woman has the skills, the self-confidence and
the information she needs to become a better parent, worker and citizen.

Inequality in Education

The parallel streams included Alternative Schools, Education Guarantee
Scheme (EGS) centres and Multi-Grade Teaching - the so-called `innovations'
designed under the canvass of the World Bank-sponsored District Primary
Education Programme (DPEP), during the 1990s. In violation of our National
Policy on Education, 1986, upper primary education (Grades VI to VIII) was
essentially forgotten, presumably to please external aid agencies committed to
the Dakar Framework of primary education of only five years. Also, the
regular teacher was replaced by a para-teacher who is an under-qualified,
untrained and under-paid local youth appointed on the basis of a short-term
contract. (Sadgopal, 2008)

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a. Discrimination against Dalits

UN Shadow Report (2007) in response to India’s submission to the United
Nations Committee on the Elimination of Racial Discrimination (CERD),
which monitors implementation of the International Convention on the
Elimination of All Forms of Racial Discrimination (ICERD). Dalits endure
segregation in housing, schools, and access to public services. Entrenched
discrimination violates Dalits’ rights to education, health, housing, property,
freedom of religion, free choice of employment, and equal treatment before the
law (Thorat, 2009). Dalits also suffer routine violations of their right to life and
security of person through state-sponsored or -sanctioned acts of violence,
including torture (Mungekar, 2007). The government was not perturbed that its
policy stance was tantamount to institutionalising discrimination against the
poor, a majority of whom would be Dalits, the tribal people and religious or
cultural minorities, two-thirds of each segment being girls. Most of the
disabled children will also fall in this category, earmarked for discrimination

a. Marginalisation of Muslims

Sachar committee (2006) has put a lot of analysis about the Indian Muslim
with "statistical reports" based on information from government agencies,
banks, Indian Minority Commission, different state governments and its
agencies. In the field of literacy the Committee has found that the rate among
Muslims is very much below than the national average. The gap between
Muslims and the general average is greater in urban areas and women. 25 per
cent of children of Muslim parents in the 6-14 year age group have either never
attended school or have dropped out. Muslim parents are not averse to
mainstream education or to send their children to affordable Government
schools. The access to government schools for children of Muslim parents is
limited.

The Government of Bihar constituted Common School System Commission
(2007) which submitted its report recently to the Government of Bihar

Gender Bias
The foremost factor limiting women education is poverty. Economics plays a
key role when it comes to coping with directs costs such as tuition fees, cost of
textbooks, uniforms, transportation and other expenses. Wherever, especially

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in families with many children, these costs exceed the income of the family,
girls are the first to be denied schooling. (Vacha & SETU, 2005).

The Indian education system has seven million students attending institutes of
higher education, making the country second to only the United States of
America. However, when the population of India is taken into account, only a
small percentage is actually in higher education (this is to some degree not
surprising given the lack of children with a primary education). In comparison
with other countries, this is appalling, as it even falls short of the 7 per cent
average for developing nations, not to mention the 47 per cent average for
developed nations.

Education is a necessity for all and not just a luxury for those who can afford
it. Therefore, it must be a top concern for India as she ventures into the future,
since without a solid educational spine, her economy will no longer be able to
stand the test of time.

Yet as valuable as education is to a country’s development, there is much less
use to excellent schooling if health problems still afflict the population. While
there are some excellent hospitals in India, they are accessible only to a select
few, as the private healthcare system disentitles a large number of people from
effective treatment. As a result, the population still struggles with illnesses
that, given modern medicine, should no longer present a problem. This means
that individual productivity is unnecessarily reduced and consequently the
productive capacities of the whole nation are severely limited. If India is ever
to become fully developed, serious attention needs to be paid to the general
health of the entire population and not just of small segments of society.

Finance and Expenditures in Education

Educational finance is an important domain in education economics since it
deals with the mobilization and allocation of resources in the production of
education. For many nations in the developing world, especially poor ones,
external resources, in terms of bilateral or multilateral assistance, are a key
source of funding for educational development. However, international
funding is becoming more problematic over time because of a combination of
factors, including declining financial support from advanced industrialized
nations, the increasing demand and competition among receiving nations, and
the imposition of more stringent conditions for receiving aid. Economic

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reforms pushed by the International Monetary Fund in developing nations
often impose strong limits on government spending. Such a policy was
associated with negative effects on the education sector in much of the 1970s
and 1980s. Since the 1990s international development agencies have become
more vocal in calling for more spending on the social sectors, including
education. The ability of developing nations to finance educational
development has also been hampered by the need of each government to make
interest payments on international and domestic debts. Increasingly, there is a
call that debt relief for developing nations and for international development
agencies be in the form of grants instead of loans to these nations, especially in
the social sectors. As the leadership of the World Bank pointed out in 1995,
however, debt relief is only part of the solution; what is also needed is the
opening up of agricultural and other markets in advanced industrialized nations
to products from developing nations.

Public Expenditure analysis:

• How much is spent on education and what is the share of the
government's expenditure?
• How do governments finance the education sector and what do
they finance?
• Is there equitable distribution of the public resources?
• Is the public getting its money's worth?
• Is the spending adequate and sustainable?

Public-Private Partnerships in the Education Sector

The provision of schooling is largely provided and financed by governments;
however unmet demand for education coupled with shrinking government
budgets is obliging the public sector to develop innovative partnerships with
the private sector. Private education encompasses a wide range of providers
including for-profit schools (that operate as enterprises), religious schools,
non-profit schools run by NGOs, publicly funded schools operated by private
boards, and community owned schools. In other words, there is a market for
education.

The main rationale for Public-Private Partnership (PPP) programs is the
potential role of the private sector for expanding equitable access and

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improving learning outcomes. In low income countries excess demand for
schooling results in private supply when the state cannot afford schooling for
all. In high income countries, however, "differentiated" demand leads to a
demand for private schooling, as a sophisticated clientele demands different
kinds of schools. By providing demand-side financing and contracting private
organizations to provide support services, governments can provide better
choices to parents and grant them an opportunity to fully participate in their
children’s schooling. The education market highlights the importance of
effective regulatory frameworks and contractual instruments to ensure quality
and effective use of public resources.

Planning and Management of Education for Inclusive Growth
Falling education spending in states and its implications for economic
development of the region has been an important area of research in India in
the millennium focused on economic growth thro’ expansion of knowledge
economy. (Ahuja, 2008) Augmenting expenditure on education as well as
better utilisation of allocated funds is an essential component of the
developmental strategy of the state in order to fulfill its long-term priorities of
development

Education Research during 2001-2009:

In India, 83 percent of all children of primary school age (6-10 years) attend
primary school, as described in a previous article on this site. Primary school
net attendance rates (NAR) are highest in urban areas and among children from
the richest households (NFHS III, 2007).

Access to education services has been major concern of education research.
Bandopadhyay (2006) reveals that most of the children from socially and
economically deprived communities in rural and urban India are ‘working
children’ who get very little chance to acquire even a minimum level of
education. This process is called ‘hierarchy of access’ which is quantified by 1.
Identifying proportion of children from marginalized population (SC, ST,
minorities) in primary education to the total children in primary education, 2.
Gender Parity Index (GPI) to assess access of young girls to education, 3. Pupil
to teacher Ratio 4. Student-classroom ratio. (Nanda, 2009).

Fewer children continue their education at the secondary level. Data from a
nationally representative Demographic and Health Survey (called National
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Family Health Survey in India) conducted in 2005 and 2006 shows that only
54 percent of all children of secondary school age (11-17 years) attend
secondary school. In addition, there are large disparities between different
groups of children. Boys and children from urban areas are more likely to be in
secondary school than girls and children from rural areas. (Patel, 2002).

Education is one of the dominant sectors of the Indian economy in terms of
enrolment of children, employment of adults and investment of financial
resources. While school education has a broad base, higher education suffers
from a narrow base covering only about 7% of the relevant age group
population. (Tilak, 2003a). With the expansion of school education, the
pressure on the higher education system to expand is expected to continue in
India (Tilak, 2003 b). In this context, two criteria of efficiency and
mobilization of resources are put forward in justification of privatization of
higher education. When higher education is left to the market forces, it results
in ‘elitisation’ of a basic need; it puts higher education firmly out of reach of
the millions of under-privileged of India who dream of going to the university
one day (Tilak, 2003 c). It firmly makes higher education a “commercial
commodity’’ that is available only to those who can afford the price which,
going by today’s rate of a seat in a professional college, could be anywhere
between $5000 and $ 75000 (Patel, 2008). India spent 2.8 per cent of its GDP
on higher education in 2007-08 which is much less than the recommendation
of Kothari Commission that demanded 6% of GDP to be invested in GDP on
higher education. Even this meager amount is now sought to be depleted in the
name of reducing the “burden” on the government. (Joshi, 2007). Since,
educational institutions form the very soul of a society and typically create the
space for both creativity and social introspection, downplaying these important
features of education can have an adverse effect upon society. (Srikanthan &
Dalrymple, 2002)
Universalisation of Education (UE)

UE was launched in 2000 with the primary objective of achieving
Universalization of elementary education before 2010 with time bound
integrated approach in participation with the states. The project aimed at
completion of five years of primary schooling for all children by 2007 and
completion of eight years of schooling by 2010 along with reduction of gender
and social gaps. The expenditure was to be shared in the basis of 85:15 in the
ninth plan and 75:25 from the tenth plan onwards. The SSA wanted to bring
about the change in the following areas: Teacher training, improvement in
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quality of education, provision of teacher training materials, establishment of
cluster groups for support and education guarantee centers. (Kaptan &
Moorthy, 2006).

Inequality in Education

The parallel streams included Alternative Schools, Education Guarantee
Scheme (EGS) centres and Multi-Grade Teaching - the so-called `innovations'
designed under the canvass of the World Bank-sponsored District Primary
Education Programme (DPEP), during the 1990s. In violation of our National
Policy on Education, 1986, upper primary education (Grades VI to VIII) was
essentially forgotten, presumably to please external aid agencies committed to
the Dakar Framework of primary education of only five years. Also, the
regular teacher was replaced by a para-teacher who is an under-qualified,
untrained and under-paid local youth appointed on the basis of a short-term
contract. (Sadgopal, 2008).

Mehta (2006) provided analysis of Population-School Ratio of all the million
plus cities of India and shown that in almost all of them large proportion of
children were not enrolled in school. There was no secular trend either by
urbanization, population, or region, indicating the need to make efforts in all
urban areas, without prejudice and preference to any region or city to increase
enrollment of children in schools. The research report further showed that in
cities like Kolkata, Mumbai and Delhi, children from marginalized
communities (SCs/STs, who were also relatively poorer) formed a very small
proportion of students in primary education. On the other hand, in smaller
million-plus cities like Nagpur, Lucknow and Kanpur were doing better in
providing access to primary education among marginalized communities.

Gender Differential Impact

District Report Cards (Mehta, 2006) also revealed that there was no secular
trend in Gender Parity index. Cities like Ahmedabad, Delhi, Mumbai,
Banglore and Chennai had GPI below unity, while cities like Bhopal,
Lucknow, Indore and Kolkata showed a positive GPI. Male-female disparities
in terms of educational provision and utilization have attracted considerable
attention in education research. (Wazir, 2002).
Common School System and Its Relationship with Right to Education
Measures to improve school education:
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Teachers should be adequately trained in English teaching. There must be
bilingual teaching for three years until children cope with English teaching.
The objective should be making children proficient in English by the time they
leave school. Adequate class rooms should be built, and proper text books
should be made available immediately. Our education system needs at least
100,000 more teachers. This need will be even greater if English medium
sections are introduced. They have to be recruited and trained adequately
Introduction of the CBSE syllabus and affiliation with CBSE only for English
medium classes and following a different syllabus for other medium students
will result in there being two classes of students. The distinction is both
unsustainable and unacceptable. Instead, even Telugu medium classes may be
affiliated with the CBSE. They can be a common syllabus for both English
and Telugu medium students, although the textbooks are in Telugu. In the
alternative, the State syllabus can be retained in certain subjects or chapters
and an integrated common syllabus be prepared for both Telugu and English
medium students.
The Intermediate Board should be abolished and Classes XI and XII made
part of school education. Throughout the world and in most States of India,
high school education ends with Class XII. Corporatisation of Intermediate
education and treating education as a profit centre is playing havoc with
students' growth and finances of lakhs of poor families. Primary schools should
be integrated into larger, viable units with 300 children 10 teachers and
infrastructure. 2-teacher primary schools are wholly inadequate. Such schools
should be converted into pre-schools where children are taught games,
cognitive skills and spoken language and provided wholesome nutrition.

Knowledge in school curriculum and pedagogy has to be concomitant with the
struggle for improvement of school infrastructure, teacher quality, pupil-
teacher ratio, financing, management and other parameters of education of
equitable quality.
Financing Education
Analysis of educational finances assumes crucial importance in educational
policy, planning, and administration, as finances form a necessary, though not
a sufficient condition, for the success of education development plans and
programmes. Of late, issues relating to financing of education are gaining
attention, essentially because of dwindling resource base on the one hand and
increasing financial needs of the education sector on the other. Various

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alternative mechanisms of funding and mobilisation of resources are being
explored in India and in many developing countries. Presenting a rich flavour
of current issues and emerging perspectives on financing education in India,
the book by Tilak (2003) provides a detailed review of the pattern of financing
education at the centre and in different states and critically examines the pros
and cons of the changing approaches to financing education. It makes a
significant contribution to a wider discussion on several issues on financing
education, and contributes to sound and effective policy making in education
Private Education for Poor in India
Introduction of 4 bills in 2010 concerning Setting up of Educational Tribunal
in the National, Regional and State levels; the setting up of National
Accreditation Authority to Assess the Educational Institutions; the Foreign
Education Provider’s Bill and the Bill on Educational Malpractices introduced
by the Ministry of Human Resource Development, GoI have posed mind-
boggling issues. What will be the ramifications of this initiative in the context
of commercialization of higher education in the name of privatization
controlled by the politicians? For one, it will deepen the class divide between
the already fragmented societies of ours. Money becomes merit in this scheme
of things since only the rich and the better-off will be able to access higher
education. The poor will be further deprived.

Evaluation of EGS:

Education Guarantee Scheme and Alternative and Innovative Education (EGS
and AIE) are an important component of Sarva Shiksha Abhiyan (SSA) to
bring out-of-school children in the fold of Elementary Education. The scheme
envisages that child-wise planning is undertaken for each out-of-school
children. EGS addresses the inaccessible habitation where there is no formal
school within the radius of one km and at least 15-25 children of 6-14 years
age group who are not going to school are available. In exceptional cases
remote habitations in hilly areas even for 10 children an EGS school can be
opened. Alternative Education interventions for specific categories of very
deprived children e.g., child labour, street children, migrating children,
working children, children living in difficult circumstances and older children
in the 9+ age group especially adolescent girls are being supported under EGS
and AIE all over the country.

16

A sizeable number of out-of-school children are in the habitations where
schooling facility is available but these children either did not join the school
or dropped out before completing their schooling. These children may not fit
into the rigid formal system. To bring such children back to school; back to
school camp and Bridge Courses strategies have been implemented. Bridge
courses and Back to school camps can be residential or non-residential
depending upon the need of children.

Conclusion
Knowledge for Development (K4D) is based on the following framework
consisting of four pillars to help countries articulate strategies for their
transition to a knowledge economy:
• An economic and institutional regime that provides incentives for the
efficient use of existing and new knowledge and the flourishing of
entrepreneurship.
• Educated and skilled populations that can create, share, and use
knowledge well.
• A dynamic information infrastructure that can facilitate the effective
communication, dissemination, and processing of information.
• An efficient innovation system of firms, research centers, universities,
think tanks, consultants, and other organizations that can tap into the
growing stock of global knowledge, assimilate and adapt it to local
needs, and create new technology.

Making effective use of knowledge in any country requires developing
appropriate policies, institutions, investments, and coordination across the
above four functional areas.

Education has been a major influence on economic growth. Greater efficiency
in the use of resources would increase the rate of return to investment in
education. During the closing decades of the twentieth century, emphasis in
developing nations regarding educational development was placed on three
broad outcomes of education: contribution to economic growth and
competitiveness, improvement in social equity, and poverty alleviation.

While dealing with privatization of higher education, we need to address some
crucial mind-boggling issues regarding role of higher education per se. Is it to
create a concerned and informed citizenry? Or to meet the expected future

17

needs of economic and social development in the country? Or simply to meet
the labour requirements of international capitalism? Can a balance be achieved
between these aims?

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