State Funds, Pvt Role For Schools
The Economic Times, December 21, 2006

TWO QUESTIONS PROVIDE A CLUE TO WHAT needs to be done to improve our education system: Which two states have the highest rate of literacy in the country? Which two states have the highest proportion of privately-managed schools?

Both questions have the same answer: Kerala and Meghalaya. Both states have above 90% literacy rate, and Kerala has 63% and Meghalaya 52% of schools under private management. There is a positive correlation between literacy rate and the proportion of schools under private management. Should then citizens demand that they all have equitable access to private schools irrespective of where they reside? Such demand may seem odd to some but the reduced choice of schools impacts their freedom and capabilities to better their lives, as Amartya Sen would contend. This suggests a clear reform idea: The government should provide funding but school management should be in private hands.

The government funding is, however, very uneven across states, across urban and rural areas and even within a given urban or rural area. The average expenditure per student in government schools is said to be Rs 4,000 per annum. The Akshara Foundation calculated that in Bangalore city schools, it is Rs 20,400. The Centre for Civil Society's estimates for Delhi and Mumbai schools are in the range of Rs 10,000 to 12,000. It is obvious that the national average of Rs 4,000 hides more than it reveals.

These expenditure calculations are based on the number of students that the government claims are enrolled in government schools. It is anyone's guess how many of these 'enrolled' students are actually in school regularly. Education inspectors in Maharashtra found almost 12 lakh 'missing students' in state schools. The names included those who had never enrolled or were enrolled in private schools to those who has passed out several years ago and had their own children in school and some who had already died.

The state funding of schools is indeed very unequal. In Delhi's slum areas, a school with 700 students and another with about 1,000 students get the same annual grant. Some schools in the Chandni Chowk area of old Delhi have more teachers than students. The old schools still go on even when there are hardly any children in the area.

For anyone concerned about regional or rural-urban disparities in education, the first task should be to bring about some rationality to the state funding of government schools. These disparities are not only morally offensive but are in gross violation of the constitutional right to equal treatment of all citizens. The fundamental right to education has little meaning when the government itself treats its young citizens so unevenly. We must move to a funding system that is based on the number of students in the school. This per student funding system is in use in several countries or their provinces. It certainly cannot be a simple multiplication; it would require a complex formula that takes into account the fixed and variable costs of a school, number of special need students, cost of living differences, and so on.

If we can design a Gadgil formula to allocate Central funds to states, I am sure we can come up with a Friedman formula to allocate funds to students in government schools in an equitable manner.