Education in India: spending and prospects

Why should the government intervene in education and health, instead of leaving them to the market?

• Their effects are long-term and cannot easily be reversed: a child who misses school misses it for good.
• Consumers often lack information about the quality of schools or treatment.
• Private providers may exploit that lack of information, and charge too much.
• Many people simply cannot afford them.
• Basic education and health are rights.

Spending on education has grown: it reached 16.54 per cent of total government spending and 4.47 per cent of GDP in 2020. But that is still short of the 6 per cent of GDP recommended long ago by the Education Commission (1964-66).

Important steps:

• The Right to Education Act (2009) makes free education a right for all children aged 6 to 14.
• An education cess (an extra tax for education) was introduced; it is now part of a 4 per cent health and education cess.

Progress: literacy is rising, and the gap between males and females is narrowing. In 2017-18, adult literacy was about 82 per cent for men and 66 per cent for women (Table 4.2).

Problems remain:

• The number of illiterate people is still about as large as India's entire population in 1947.
• The education pyramid is steep: many children start school, but far fewer reach higher education.
• There is educated unemployment: in 2011-12, nearly 30 per cent of young rural women graduates could not find work.

So India needs more and better schooling, for everyone, with skills that lead to jobs.