The three C’s to improve the education system

Improving competition, providing contestability and ensuring clarity of objectives can help improve the supply side of India’s education sector 

Advance warning: Education system in India has been throughly reviewed and criticised innumerous times. There have been various studies done by NGOs, Ministry of Human Resource and Development and education institutions on the subject. This piece attempts to club some of the suggestions from various readings into three broad buckets.

With India struggling to reduce the large share of low skilled employment and a huge informal sector, it is time that some of the burden is shared with the private sector.  As per the Human Capital Index, India ranks 100 out 124 countries indicating its inability to improve human capital formation.  Therefore, steps need to be taken that incentivise private sector to invest in elementary education institutions in the country.

As the Economist article “Learning unleashed” shows, there has been a surge in the private schools across developing countries. A larger population including the low income families, have shown a preference towards private schools over public schools. The key reason for the dire state being the poor standard of teacher training and low quality of teaching in the classroom within public schools. To add to it is the lack of competition faced by public schools removes any incentive for an improvement.

Moreover, Ministry of Human Resource and Development (MHRD) has created barriers to market entry for the private sector by imposing regulation which are uneconomical. For instance, as per the Right of Children to Free and Compulsory Education (RTE) Act, 2009, one of the basic requirements to attain the Certificate of Recognition for setting up schools includes Certificate of Land Ownership. This essentially means that the land ownership is a basic requirement for building a school. It, thereby, limits the entry of entrepreneurs with low capital. Hence, even if the provisions made for “free and compulsory education” under the the RTE Act have helped increase the demand for education, the supply side has been left unaltered.

In order to supplement the supply side in education sector, the MHRD needs to broadly ensure 3 C’s: competition, contestability and clarity.


One of the primary steps to improve the elementary schooling in India includes increasing  the competition at the primary school level. An interesting way to attain this would be by using the steps taken by the Punjab province of Pakistan as explained in the Economist article.

As per the article, the Chief Minister of the province, Shabaz Sharif has decided to not build any new school and, instead funnel money to private sector via an independent body, Punjab Education Foundation (PEF). To help build the private sector, a scheme has been started which helps entrepreneurs set up new schools, particularly in rural areas. Another scheme gives vouchers to  incentivise parents living in slums to send children to PEF-approved institutions. Thereby providing impetus for an increase in the number of schools within the rural regions of the province.

On similar grounds, the 42,220 crore provisioned for the elementary school level as per the 2015 Budget can be allocated primarily between entrepreneurs to set up new schools and as vouchers to low income families  based on a pre-decided weightage.


As most of the infrastructure building and the supply side is pushed towards private schools, the public schools can provide contestability in order to reduce oligopoly or monopoly of private players in the market. Private sector suffers from various problems such as, low profit margins that hamper their sustainability, residual risk of poor financial management, and corruption. The MHRD can thereby devolve larger resources in being the regulator for the private sector schools and filling up the gap only in the regions where opening private schools is not economical.


Finally, it is important for MHRD to set well defined objectives and outcomes. These objectives should be set such that each stakeholder in the education sector is given precise and limited number of responsibilities which are thoroughly evaluated in the end of a term. For instance, the teachers for pre-primary school can be asked to focus on improving the reading skills of the students. This would help them to concentrate their attention on specific and attainable tasks. Also, a clear goal and objective would help the ministry avoid highly criticised and dubious polices such as the no retention policy upto eight standard in schools.

It is vital to note that one of the primary reason for the rise in private schools has been the realisation of the growing need for education in the increasingly globalised world. This increase in demand needs to be matched with a holistic growth in the supply side of education to ensure a productive use of the young population within the country.

Devika Kher is a Research Associate at Takshashila Institution. Her twitter handle is @DevikaKher.

Image Source: Wikipedia