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Arvind Kejriwal should refund Rs 5,700 crore ‘extra tax’ to the exchequer

This is the story of AAP’s education revolution. Mercilessly killing private schools, therefore eliminating the choice for the public, and increasing the burden on the taxpayer in the name of improving public schools

After a brief silence following the drubbing in Lok Sabha polls, Arvind Kejriwal’s Twitter account is brimming with activity. For a change, he is not tweeting conspiracy theories(though I prefer them as they are more entertaining and less harmful). He has been busy advertising and accepting praise for forcing private schools to refund what his government deems as an extra fee. A few people posted images of messages that they had received from their respective schools notifying the refund. He regards it as a glorious achievement of his government’s honest work.

Nobody can dispute the Delhi Government’s focus on education. After all their whole Lok Sabha poll campaign was built on AAP revolutionizing education in Delhi. A minor detail, though, is whether the revolutionary focus has been on improving it or destroying it. Let this piece be a guide to answer that.

Ever since the AAP came to power in Delhi, besides glorifying their own work in government schools, the one thing they have been constantly doing is to demonize private schools. Though every government does this at some level, what stands out with the AAP is that they revel in it.

Education, as everyone knows, is an extremely regulated sector. So it is an exceptionally difficult task to set up and run a school. Now, what happens when you choke the supply but the demand continues to increases at a natural pace? The prices go up. This is what parents experience when they shell out fees for their wards. But parents don’t need to know the economics behind it, all they seek is a relief from paying huge sums. And this is the space where AAP thrives. Instead of contemplating ways to ease regulatory barriers and improve the supply, they play hero and beat private schools into submission. They arm-twist them to not hike fees, harass them in the name of audits, compliance and what not.

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The populism doesn’t end with pleasing parents; there is 2 lakh working staff in private schools to gratify. So they ordered private schools to implement 7th pay commission recommendations, which entails increasing salaries by around 23% with effect from Jan 2016. The sinister part comes now. The AAP government won’t allow schools to increase the fees. Manish Sisodia argues that schools have enough reserves to comply with 7th CPC recommendation and that they don’t need to hike school fees. Schools which feel the need to hike should undergo an audit, he says.

The recent ‘extra fee refund achievement’ was a result of one such audit.
A week before Delhi went to Lok Sabha polls, Sisodia addressed a press conference to detail about a school audit. He said that the school had illegally extorted fees of over 2 crores and that a refund was sought. In a bid to justify the act, he levelled a series of accusations against the school. One that caught the ear was the charge that the school had spent 60 lakhs in publicity. A private school spending its own money for their own growth riled them up, while in its first year, the AAP government spent Rs 29 crores of Delhi’s taxpayers’ money in advertisements *outside* Delhi. I don’t understand why CAG didn’t seek a refund. He was also miffed about the fact that the school’s housekeeping expenditure was inflated. Inflated or not it is the school’s money, but the AAP government should be the last to complain, for they spent one crore taxpayers money on chai/samosa in 18 months.

So what does all this ‘education revolution’ result in?

Delhi loses about 25% of private schools during AAP’s tenure, choking the supply even further. In the same period, the demand has increased, enrollment to private schools has gone up by 10%. One more term of AAP’s ‘education revolution’ and private schools could be completely wiped out.

Suppy of private schools over the years vs demand

Let us now talk a bit about government schools. The first thing that any AAP supporter boasts about is the fact that Delhi has continuously been investing the highest share of its budget in the education sector among all states. Nobody can deny this fact. However, let us see what it reveals if we perform an audit on the expenditure à la audits Manish Sisodia does on private schools.

For the year 2018-19, Delhi allocated around Rs 14,000 crores to education. As per their economic survey report, that figure translates to an expenditure of whooping Rs 66,000 per student per annum. What is the significance of this number? It is essentially the fee the Delhi taxpayer is paying to enrol one student in a government school. Yes, you heard it right. The Delhi Government is charging Rs 66000 in fee from you to admit one student in a government school. They intelligently conceal the fact by calling it ‘government spending’. As Frederick Bastiat says, “Everyone wants to live at the expense of the state. They forget that the state lives at the expense of everyone.”

“Per student Expenditure on Education” by Delhi Government

To understand this 66,000 number, we need to know the average private school fee in Delhi. This, for all intents and purposes, is the amount the Delhi government reimburses to private schools for enrolling one EWS student(RTE mandated). As per 2017-18 order [pdf], the amount is around Rs 28,000, which is Rs 38,000 less than what the government is charging for enrolling a student in public school.

Here, we are not even comparing the quality, facilities or outcomes between private and public schools(which is a no contest in favour of private schools), just the fee. So the Delhi government should explain why they are extorting Rs 38,000 more in fee from the exchequer. With around 15 Lakhs student enrolled in government schools, a back of the envelope calculation gives us that it amounts to Rs 5,700 crores inflated spending. Perhaps CAG should take note and demand a refund to the exchequer the ‘extra tax’ levied by the Delhi Government. Also, going forward the government should quit the business of running schools and hand them over to private management as the former is clearly inefficient.

So this is the story of AAP’s education revolution. Mercilessly killing private schools, therefore eliminating the choice for the public, and increasing the burden on the taxpayer in the name of improving public schools. It is easy to get excited reading media reports about increased spending and focus on education but it takes effort to evaluate what it means.

“If you desire better education and healthcare, vote us; if you want riots, go with the rest,” Kejriwal says in a video posted by official Aam Aadmi Party(AAP) twitter account.

In the absence of a definitive framework to measure performance, rhetoric fills in the void.

(All the numbers in the article are sourced from the Delhi Government’s economic survey report. [pdf])

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Ravi Kiran
Where people see chaos, I see order. Where people see order, I see conformity.

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