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Mainstream, VOL LII, No 43, October 18, 2014

Education — The Indian Experience

Monday 20 October 2014

by Abhijit Chakraborty

The word education is synonymous to the word empowerment and an empowered nation would mean a progressive nation. It has been seen that education enables a country to make progress and improve the standard of living for its citizens. Countries like Japan had made early progress in education during the Meiji resto-ration in 1868 and reaped the benefits of the same. In a modern society, where an important means of communication is through the written medium, being educated is in itself a form of freedom. (Sen 2000) Freedom sometimes mean a lot for communities or societies which are driven by the narrow end of achieving progress in the name of cringing others. So education brings in a multitude of freedoms, namely, social, economic, political which later help protect the most vulnerable in society. In this paper we try to see that in spite of such extrapolation of issues on education and development, India still believes that investment in education might not be an important component of development.

Education has always been a matter of concern and the analysis of education as an economic commodity has a long history. The seminal work of Becker (Becker 1962) and Schultz (Schultz 1961) presented a formal model of education as a good investment that augmented the stock of human capital. Within development and growth economics, the importance of education as an economic variable also has a distinguished history, beginning with Lewis (Lewis 1962). There have been some studies in recent years by Barro (1991), Barro and Sala-i-Martin (1995), Lucas (1998) and these have given a huge impetus to the formal analysis which highlights the potential role of education in economic growth.

In the Indian context, economic growth is not seen as synonymous to economic development, but once we consider the much broader pers-pectives of economic development it becomes apparent that education plays an important role for a developing country such as India. Here development perspectives, though being a part of the rhetoric for most politicians, have never quite figured in policy-making. This has also made education, a major indicator of development, to take the back stage. A study by Dreze and Murthi (Dreze and Murthi 2001) shows that a major factor determining low fertility is high female education, while general indicators of modernisation like urbanisation, poverty reduction and male literacy have no such impacts. In spite of all this, female literacy rates are quite low in India. Amartya Sen (Sen 2013) also notes the importance of education and how it can transform our economy.

Subsequently, all the governments at the Centre have always cold-shouldered invest-ment in education. The new government in its Budget has also not shown anything that should act as an encouragement on this score. India’s public spending on education was only 3.4 per cent of the GDP in 2012 which is absymally low compared to any other country at least in South Asia. (Ghosh 2014) That education has been neglected in subsequent years is apparent from the fact that out of 200 universities in Asia India does not even have one University in the top list whereas China and Singapore have two Universities each in the list. (Bardhan 2013)

There are many States where even the physical infrastructure for education is not available. Basic education is considered to be the catalyst for social change. In a country where written communication can be considered to be the medium of interaction, an illiterate person has less chances of defending himself or herself in the public sphere and thus ends up in being a subject of exploitation by others. In the Human Development Index, educational attainment is considered to be an important parameter to calculate the HDI index. This makes education a noteworthy parameter and an important tool for development or precisely human development. The importance of human capital can never be belittled, especially for underdeveloped countries, but the opposite has happened since the early years of our indepen-dence in spite of advice from various economists. (Friedman 1955) 1 The results of such a naive policy carry serious implications if we compare ourselves to the BRICS countries, one of which our Pime Minister visited recently. The statistics related to education in India show that it is the worst among the four countries under scrutiny. (Sen and Dreze 2013)

If we look into the table it is surprising to see that India is really lagging behind these countries in all indicators of education. Brazil is a country which had been lagging far behind many other countries till very recently but now it fares better than many other countries. This has happened due to persistent efforts on the part of the Brazilian Government.

Prior to 1976, education was the exclusive responsibility of the States in India. The constitu-tional amendment of 1976 included education in the Concurrent List. The state of education in the country is perilous. Probably the planners never took proper steps or initiatives to develop education at all levels. There is a great link between human development and education. Standard theories in economics point towards the improvement in human life and its standard as a result of education. Education, as pointed out earlier, is said to increase the income of a person and thus leads to empowerment. It also has a strong link to health and hygiene and thus longevity. This itself shows the importance of education in human development.

A statistics recently by the WHO pointed out that India is performing very poorly in terms of sanitation. It is being increasingly found that the number of persons practising open defecation is higher in India than Bangladesh and other South Asian countries. (Sen and Dreze 2013) This might have larger implications for a large country such as India.

It is found that the expenditure on education as a percentage of total government expenditure is quite low. It is just 11.3 per cent compared to Thailand which is 31.5 per cent. Fig 1 shows that both in terms of percentage of the GDP and expenditure on education as a percentage of the total government expenditure, India has fallen far behind on both accounts when compared to countries such as Argentina, Brazil, Mexico, South Africa and Thailand.

The Kothari Commision in the year 1966 recommended that six per cent of the national income must be invested in education. (Tilak 2007) It has been widely observed that the recommendation has mostly not been followed religiously. (Tilak 2007)

Education has been found to have a strong effect even on the health of individuals. As noted by many economists, for a progressive economy health and education play a major role. It has been found on several occasions that education too seems to bring about an improvement in the health of individuals. If the mother is educated, she utilises her awareness to bring about an improvement in the health of the child. Formal education can in fact bring about better benefits for the society at large. (Todaro and Smith 2012) It has also been found that returns from education can really be higher and the benefits from it can improve income and productivity over a lifetime. (Psacharo-poulos 1995) An educated person, through his knowledge and awarness, not only benefits himself but can also benefit the community as a whole. Education contributes towards the betterment of the individual and also makes a person politically more conscious and enhances greater understanding of the basic human rights available to individuals; and thus in a democratic set-up they can demand such rights in the form of freedom. (Sen 2000, Dreze and Sen 2013)

In spite of all these benefits, investment in education in India is still quite limited. Even today we have not been able to universalise school education and also have not been able to freeze school drop-outs. The quality of education too leaves much to be desired: this is another important issue where elementary education demands greater attention even though there are schools which seem to be doing the job quite well. The Latin American and other experiences show better school education can be linked to economic growth. (Sen and Dreze 2013) The quality of education in India is really poor and effective measures need to be taken on a war footing to bring about a complete overhaul. The private schools, which are running in the country, also need to be serious about the uniformity and quality of education. A study conducted by PISA in terms of reading, writing, and subtracting found that India was lagging behind its Asian counterparts.

The questions that naturally arise are: what are the solutions and how to improve the scenario in this regard? The first and the foremost step towards betterment of the situation is to increase the government investment on education which should be coupled with sincere implementation. There is enough legroom for the government in the Budget for accommodating six per cent of the GDP in education. This might improve the scenerio. The second most important thing is to enhance the quality of education which is something that requires serious thought. The government’s effort through Continious Compre-hensive Evaluation (CCE) in CBSE Schools till class X is being read as no evaluation in certain States. This accentuates the real danger since it would again lead to deterioration in the quality of education. Universalisation of education has to be accorded topmost priority as then alone we can take the next step. The good days (achchhe din) in education are yet to arrive. If the new BJP-led government takes enough prec-aution and improves the status of elementary education which is the base of the system, only then can it ensure real good times in action and not just in rhetoric. This will happen only when the government realises the serious drawbacks that the country faces in many avenues of development, one of them being education.


1. Ansari, M.I., and Singh, S.K. (1997), ‘Public Spending on Education and Economic Growth in India: Evidence from VAR Modelling’, Indian Journal of Applied Economics, 6 (2), pp. 43-64.

2. Barro, R.J. (1991), ‘Economic Growth in a Cross-section of Countries’, Quarterly Journal of Economics, 106 (2), pp. 407-443.

3. Barro R.J., and Sala-i-Martin, X. (1995), Economic Growth, McGraw Hill.

4. Becker, G. (1962), ‘Investment in Human Capital’, Journal of Political Economy, October, pp. 9-49.

5 Lewis, W.A. (1962), ‘Education and Economic Development’, International Social Science Journal, 14 (4), pp. 685-699.

6. Lucas (1988), ‘On the Mechanics of Economic Development’, Journal of Monetary Economics, 22 (1), pp. 3-42.

7. Sen, Amartya and Dreze, Jean (2013), An Uncertain Glory: India and its Contradictions, Penguin Allen Lane, India.

8. Tilak B.G. Jandhyala (2007), ‘The Kothari Commission and Financing of Education’, EPW, pp. 874-882.

9. Sen, Amartya (2000), Development as Freedom, Oxford University Press, New Delhi, India.

10. Dreze, Jean and Murthi, Mamta (2001), ‘Fertility, Education, and Development: Evidence from India’, Population and Development Review, Vol 27, Issue 1, March, pp. 33-63.

11. Todaro, P. Michael and Smith, C. Stephen (2012), Economic Development, Pearson, India.

12. Psacharopoulous, George (1995), ‘The Profitability of Investment in Education: Concepts and Methods’, World Bank, Washington D.C.

13. Ghosh, Jayati (2014), ‘Hollow Promises’, Frontline, Vol. 31, No. 15, July-August, pp. 13-15.

14. Scultz, Theodore (1961), ‘Investing in Human Capital’, American Economic Review, LI, March, pp. 1-17.


  • A report by the famous economist, Milton Friedman, to the Indian Government pointed to the excessive importance on physical capital and neglect of human capital but the same was ignored by the planners at that time.

The author belongs to the Department of Economics, North Bengal University, Darjeeling.