1. Can we do better than “ The RTE Act ” ?
By Ashish Puntambekar
Ever since the 12th April Supreme Court order upholding the RTE Act, there has
been uncertainty within the school system with both school managements and
parents worried about the implications of the courts order. Schools are worried
that it will ruin their finances and parents are worried that schools across India
might cancel admissions to comply with the 25 % quota requirement.
The unstated question is “ Can we do better than the RTE Act ? “
Introducing “ The Indian Education Megaproject ”
Stakeholders in schools across India may be pleasantly surprised to learn that in
June 2010, a landmark project “ The Indian Education Megaproject “ with a capacity
to provide high quality education, totally free of cost to an additional 126 Million
children has been submitted to the Ministry of HRD & Planning Commission.
The Megaproject envisages the construction of a massive system of 30,000 New
Hub Schools under Public Private Partnership ( PPP ) , across 28 states and 7
Union Territories. Each of these Hub schools will in turn share its teachers with
14 other smaller schools within a radius of 50 Km thereby covering an additional
420,000 existing Schools nationwide.
The Megaproject has a Teacher Centric concept as against the current Sarva
Shiksha Abhiyaan ( SSA ) which is literacy centric. This essentially means that in
order to attract qualified people the Education Megaproject provides attractive
inducements to prospective teachers : Good Salaries, Excellent Housing, and
free healthcare. The central idea being that if we can motivate qualified people to
take up careers in education, Universal literacy will follow by itself.
System of 18 Million Vouchers
The Megaproject focuses on the poorest children by introducing a system of 18
Million Vouchers which are allotted by means of a simple aptitude test ( not a
knowledge test ) administered nationwide. For the same score, the voucher will
favour the disadvantaged child by using an inverse algorithm which takes into
account the child’s education history and family income. The objective is to take
in disadvantaged children at all age levels on a scale not possible under the RTI
Act. This will dramatically reduce entry barriers to allow admission into the
Megaprojects vocational school system.

2. The New Hub schools will be overstaffed with twice the number of teachers
required to enable sharing with other smaller schools in its area. Each voucher
will therefore pay for the education of 6 other children ( in addition to the winner
of the voucher ), to achieve a coverage of 126 Million Children.
The Megaprojects cost of educating each child, despite a much higher quality
level, is still competitive with the SSA. Most importantly the Megaproject creates
massive new capacity while the RTE act leaves new school construction to
individual states. In fact, the RTE Act destroys the economics of existing schools
and discourages the building of new schools by private parties.
To quantify the Megaprojects impact we compare it with expected RTE Act
outcomes on 12 key parameters.
1. Additional Capacity Creation :The Education Megaproject builds 30,000 New
schools ( each with 600 seats ) under PPP and upgrades 420,000 existing SSA
schools by sharing its qualified teachers. The RTE Act actually does the
opposite, by not fully reimbursing 25 % quota implementation costs it destroys
the finances of private schools thereby discouraging further private investment.
2. New Teachers Recruitment and Training :
The Govt. is still not clear where it will find the 1.2 Lakh teachers to implement
RTE. The Education Megaproject on the other hand will execute a massive plan
to induct and train 17.4 Lakh New Teachers. The project will deploy 10,000
search consultants backed with a Rs 800 Crore advertising budget to find
suitable people from other professions. Once the people are found they will be
trained in 500 New Teacher Training institutes.
Under RTE, Govt is not thinking beyond Class VIII. In comparison
3. Focus Area :
the Megaproject accommodates all children who are not in school. Its real focus
however is class V to class XII where there is a huge shortage of over 5.5 Lakh
secondary schools.
4. Capital Cost : Under RTE, the Central Govt. has abdicated responsibility by
leaving the job of setting up of new schools to State Governments. The
Megaproject is the exact opposite. It is a centrally sponsored scheme that will
invest Rs 6 Lakh Crores over an 8 – 10 year construction period. Capital
investment will create 2 Million new Jobs during construction and another 4
million new jobs in the operations phase.
5. Operating Cost : The RTE has an Operating cost of Rs. 2.3 Lakh Crores each
year. Over the next 30 years it will cost the Union Budget Rs 69 Lakh Crores (
without discounting ). The Education Megaproject is however engineered to
generate most of its yearly Opex of Rs. 1.93 Lakh cores within its internal
Financing structure. It will need only Rs. 16,000 Crores each year from the Union

3. Budget. Over a 30 year period, its burden on the Union budget will be Rs 4.8 Lakh
Crores. Much lesser than the current RTE plan.
6. Sources Of Finance : As opposed to the RTE Act which will get all its 2.3 Lakh
crores from the Union Budget, the Education Megaproject has 14 different and
innovative pools of Finance, including :
(1) US $ 15.6 Billion currently lying un-utilized with the World bank / ADB,
(2) Increasing FSI’s on some PSU land and auctioning it to raise US $ 40 Billion
(3) 5 % of Indian Foreign Exchange Reserves
The important thing here is that the entire Capital cost of 6 Lakh Crores will be
raised without a single paise coming from the Union Budget or the State
Government Budgets. The money is already there but it has never been used by
any government. The Megaproject simply taps into these sources in a
coordinated manner. The detailed 50 page financing document is available for
free download on the following link.
http://www.nataraja.org.in/site_includes/documents/Indian%20Education%20Meg
aproject_Financing_Structuring_And_Control_Concepts.pdf
7. Capacity of Accommodate Disadvantaged Children :The current RTE expansion
plan caters to 8 – 10 Million disadvantaged children. The Megaproject on the
other hand has been designed for an additional 126 Million Children because
Govt. planners have missed counting tens of millions of children. In addition,
there is a huge adult literacy evening scheme to include those left out over the
last 20 years.
8. System Of Selection : The RTE Act leaves the identification of poor children to
the Block Development Officer. This will create massive corruption as Poverty
Certificates will now be auctioned. The Megaproject avoids this by implementing
a system of 18 Million Vouchers , where the test system will favour the
disadvantaged child. Scope for Corruption in this system is Zero.
9. Programme Control and Monitoring : The RTE Act and the current Govt. school
system, lacks a proper system to monitor quality & compliance. The
Megaproject instead has a sophisticated Computer system which makes all
decisions totally transparent and visible. The Voucher System Algorithms will
generate systemic alerts when specific triggers are hit or when timely decisions
are not taken. System will be decentralized at state level with drill down
functionality to the village school level.
10. Annual Cost Per Child : Implementing the RTE Act will cost the Govt. Rs. 12000
per child per year. For the Education Megaproject this number is Rs 14,490.

4. Under the RTI act, some of the cost is borne by private operators as the
government does not re-imburse them fully. This does not happen under the
Megaprojects financial structure. In fact the Megaproject subsidizes even
children from higher income groups to the extent of 30 %. It therefore provides
truly affordable education.
The RTE Act will further ruin education quality as 46 % of
11. Quality of Education :
India’s 4.7 Million Teachers have not studied beyond class XII. In Bihar just 21
% of teachers have passed their class X exams. This has happened mainly due
to a Literacy centric mindset in the SSA system. In comparison, the
Megaproject’s teacher centric model will deliver very high performance by
sharing it 17.4 lakh Graduate Teachers backed by a massive IT Network to reach
remote villages.
12. Project Objective : The Megaproject has a clear objective of constructing
School Infrastructure and preparing human resources needed to support a US $
4.5 trillion economy in India by 2025. The RTE Act, though based ostensibly on
the very noble objective of social inclusion, is, in fact a populist scheme with no
clear vision.
Education Megaproject Financing & Startup Issues
Education is a state subject under the constitution. Since states do not have
adequate resources, the financing for this project will be enabled by central
legislation and through a financing structure that the Vajpayee led NDA
government first deployed to build the Golden Quadrilateral Project.
The Education Megaproject uses this same structure as Govt. of India is already
very familiar with it. The only difference is that instead of a special tax on Diesel
and Petrol that was adopted for financing the Roads system, the education
project will use 14 different financing sources which are totally new such as using
money lying un - utilized with the World Bank for example. The only thing left to
do then, to get the Education Megaproject off the ground is to get Parliament to
pass two separate Acts as follows :
1. The Indian Social Infrastructure Corporation Act
2. The Education Megaproject Fund Act
The first Act will set up an SPV to construct the project while the second act will
enable the raising of money from 14 un-conventional sources of finance. To do
this fast, the two acts can be brought in by means of an Ordinance and then
ratified by Parliament within 3 months. No Political Party will oppose an
Education Project so the entire process can be completed within 6 months.

5. It needs to be mentioned here that since Education generates massive demand
within an economy, even printing money to finance schools, is in theory at least,
non inflationary. The Education Megaproject however, is based on innovative
financing that besides creating millions of new jobs is also a huge GDP and
investment Multiplier. It is very different from the RTE Act which though good in
its intention is retrogressive and un-imaginative in its execution
Forward Path
A total of 70 Pilot projects are planned with two pilot schools including a teachers
training institute in each state / Union Territory to test various systems before
mass rollout . Simultaneously, steps will be initiated to launch the first of four
bidding rounds which by June 2014, will offer 6000 New Hub schools on PPP basis
to private parties as part of Phase I.
The supreme court was very right in upholding the RTE act as it stands for
Equality of Opportunity. But given the inertia we have within government, it may
be necessary for School Associations, Parent Groups and Civil Society to
approach the apex court once again to plead for the Education Megaproject as it
is a market friendly scheme in the public interest.
Those interested in the Education Megaproject and its ideas are invited to
download all the projects detailed plan documents, Project Presentation and
calculations from the Nataraja Foundations website.
http://www.nataraja.org.in/masseducationproject.htm
Senior Responses to the project from The Planning Commission and other
organizations is on the following link.
http://www.nataraja.org.in/site_includes/documents/Responses%20To%20Indian
%20Education%20Megaproject%20_%20Upto_March_2011.pdf
- Concluded -
About the author :
The Megaproject’s designer is a Corporate Planner and Large Project Design
Specialist with a Reliance Industries. The Education Megaproject has been
launched through a Private foundation where the author works for his 8th Class
Schoolteacher Mr. S Natarajan. Views expressed are personal.