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Home Editor's picks Facts, No fiction: Moving towards education vouchers for India’s public schooling system

Facts, No fiction: Moving towards education vouchers for India’s public schooling system

Our current public schooling system has become a dumping ground for public resources. It is inherently present with systemic inefficiencies that are resulting in deteriorating standards of education.

The current public schooling system in India constitutes of government schools providing the students with education at highly subsidised rates. Nobody denies the importance of affordable education. In fact, it is desired that education is made affordable as it plays a critical role in ensuring a skilled workforce that yields rich dividends in the form of greater productivity for any nation. The critical role of education not only makes it desirable for education to be affordable but also requires a decent quality of the education being provided to students.

Our current public schooling system has become a dumping ground for public resources. It is inherently present with systemic inefficiencies that are resulting in deteriorating standards of education. Since the most amount of people that attend these schools come from the poor sections of the society, by providing them substandard education we are condemning most of them to poverty for the remainder of their lives. There is an urgent need to take measures that ensure that there is a reduction in the dropout rates post 8th grade and the overall quality of education being provided to these kids is improved significantly.

A way to achieve this could be a shift to a Targeted Education Voucher Scheme for the poor in India. A voucher system is a system whereby the government provides vouchers to the eligible population and the vouchers can be redeemed by the beneficiaries towards paying their tuition fees. That is, the system shifts the distribution of the subsidy from a production subsidy to a consumption subsidy. The idea of a voucher system was first proposed by Milton Friedman for the primary and secondary public education institutions in the USA (Friedman, 1955).

The biggest advantage of this shift would be that subsidy would be provided only upon consumption of the good that is, going to school and thus, it will incentivize students to attend their respective school and will be instrumental in bringing down the current high drop-out rates in India currently observed during the transition from primary to secondary education.

A voucher system makes it possible for the poor students to finance private schooling education by redeeming the vouchers. This means that the system makes it possible for the poor students to choose a school of their choice, be it private or public or any other type of a school giving him some form of control or freedom to choose the provider of the education service. That is, in effect, it gives much greater choice to parents and students to pick the right school than what was available before. This will also have significant effects on the overall integration of society, as classrooms would become more culturally diverse and the students will become more culturally sensitive. When the value of the voucher is enough to generate a surplus over and above the costs of any entrepreneur, such a system would result in increasing competition between schools to attract students. This increasing competition would result in better services and a reduction in the costs of private schooling and this will benefit the parents, the students and even the schools.

A project based on the targeted education voucher system was undertaken by The Centre for Civil Society in Delhi. The experiment being India’s first was launched on 28th March 2007 and after the end of the first year, an independent assessment for the same was planned. They reviewed the experiment and presented the key findings in their Delhi Voucher Project First Assessment Report. As mentioned in their report, the study found that 63.1% of the voucher beneficiaries exercised freedom of choice and thus switched to private schools and more than 90% of parents of the students who switched to private schools (due to vouchers) were happy with the progress their children made, their teachers and standards of discipline in these schools.

The report adds “A high majority (94 percent) of the voucher parents mentioned that their children were happy with their present school. 61 percent of the voucher parents felt that their children had also become more regular with school work. More than 50 percent of the voucher parents noticed that their children had become more disciplined and studied more in their new school”.

It further stresses that availability of choice has a significant impact on children as almost ninety percent of voucher students and those attending the private schools perceived that being educated in their current school would provide them with opportunities for better life and future. This is in stark contrast with those who attended a government school where the figure stood at 61%. When we look at performance, the voucher students performed better than those studying in government schools in English, Mathematics and Hindi in all grades. In fact, their performance was at par with the performance of general students in private schools.

To conclude, the absence of competition among these publicly owned schools brings in inefficacies in the system- there is perennial lack of teachers and facilities, high student-teacher ratio, inability to provide basic facilities like washrooms, playground etc., and less number of such schools per district has led to a high dropout rate among the students. More than half of the students who enrol at primary level dropout by class 8th. These inefficiencies also lead to poor understanding levels in students; India ranks second last in the PISA test only beating Kyrgyzstan amongst 73 countries that took part in the test. School Vouchers are hence suggested as a viable alternative which could enhance school choice among parents. Evidence from The Delhi Voucher Project also strengthens the case for a shift from the current system to a voucher-based one where “funds follow the students rather than the schools.

The article is from a detailed paper that looks into the possibility of a targeted education voucher program for India. The paper can be accessed by clicking here

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Karan Bhasin
Karan Bhasin is a political economist by training and has diversified research interests in the field of economics. He tweets @karanbhasin95.

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