How the voucher system can improve the nation's quality of education

DNA | 25 May 2016

Nobel Prize-winning economist Milton Friedman argued that free-market competition would improve school quality, as students (and their money) would flock to good schools.

According to UNESCO, approximately 72.01% of the Indian population is literate. However, according to ASER reports, an 8th grade student in India is unable to read text for fifth standard students. These figures point to the abominable state of the quality of education in India.

The Government of India acknowledged this issue and came up with a revolutionary idea of ensuring education for its citizens through The Right of Children to Free and Compulsory Education Act 2009 (RTE). Students should not be denied entry-level schooling for lack of funds, and hence this Act ensures free and basic primary education to all through several norms for delivering quality education.

Our nation has seen a constant growth in the Union Education Budget, especially in the field of primary and elementary education. As a result, we have also seen an upward growth in enrolment in primary education as well. The Delhi government, on March 28, 2016, has allocated 22.55% of its total budget to education, an increase of 8.68% from last year’s allocation. There are some proactive steps the Delhi government has taken to ensure quality education, such as focusing on teacher training, decentralization of power to school principals, and auditing of government schools. Yet, it has forgotten the crucial step as to how one will ensure the learning outcomes of children.

Under section 12 1(c) of RTE, government mandates 25% seats in private schools to be reserved for students from economically weaker sections of society. This is to ensure that people from disadvantaged backgrounds also get access to private schools that otherwise may not be possible. This 25% quota is the manifestation of the fact that the quality of education in private schools is way better than in government-run schools. If the education in government schools was at par with the private schools, then this section in the Act would not have been necessary.

The not so well-off parents also consider low-fee private schools (budget schools). The private schools in general are a provider of better education; they are more cost-effective; and, they are more accountable and responsive to their students and parents. According to an estimate, low-fee schools in urban areas charge fees up to Rs500 as compared to Rs1290 being spent by the government.

Private schools provide relatively better education at a much cheaper cost. How should our government react to this? Perhaps, by following the money. How best should the taxpayers’ money be utilised?

The Centre for Civil Society (CCS), not-for-profit think tank based out of Delhi, answers this question by suggesting “Fund Students, Not Schools!”. Public money should follow the child, not the school, through school vouchers. The school that the parents and students choose should get the funding. Under this “student first” (as opposed to “school first”) system of financing is propounded. All schools will compete for all children, whether rich or poor, and all schools will be accountable to all parents, whether rich or poor. This would enhance parental choice furthering healthy competition among schools and improving their quality.

Parth J Shah (president, CCS) says the primary challenge in improving the quality of government schools is to find a way to hold the schools accountable to parents instead of only to the education department. Developing an effective and powerful school management committee (SMC) is one option. School vouchers are a newer approach to make government schools accountable and responsive to students and parents.

School Vouchers are coupons that can be redeemed for educational services from participating institutions, which are schools. In this sense, education vouchers are an effort towards empowerment of a section of the society (parents and students). Moreover, examples from countries like Sweden, where the student voucher system is in practice show that there is a marked increase in the quality of education and learning experience of students.

Vouchers therefore, change the way governments finance the education of the poor and bring about desired results in the form of better learning outcomes. This shows that a mere increase in government expenditure on education sector does not necessarily translate into better education.

Nobel Prize-winning economist Milton Friedman argued that free-market competition would improve school quality, as students (and their money) would flock to good schools and abandon bad ones. It would also, he said, help in the diversification of students in schools, since poorer parents would be able to send their children to the same schools as the rich.

Karthik Muralidharan of the University of California, USA, draws conclusions in favour of vouchers from an experimental study in Andhra Pradesh. His findings showed that students who received vouchers for private schools performed marginally better on evaluative tests than those who did not. And these schools that provided better outcomes, did so at a lower cost than public schools. Moreover, the study suggested that the positive impact on voucher winners did not come at the expense of other students. State governments of Uttarakhand, Madhya Pradesh and Rajasthan have introduced the voucher system in various forms with considerable achievements.

There has been opposition to education vouchers on various grounds including issues against commoditization of education. It is however important to remember that the purpose of education, as spelt out in the Universal Declaration of Human Rights (UDHR), is full development of the human personality. Vouchers help in moving closer to this goal by creating a competitive market in education and thereby improving learning outcomes.

Increased competition helps the schools to push and improve their standard of education in order to attract more students. The focus should be on finding better ways to deliver the best possible education to students, especially those who cannot afford to acquire it on their own. Education vouchers with their enabling role in increasing equality of opportunity and choice provide us with a way forward.

Hussain is Lead Alliance of Sarthi; Yadav is a student of Jawaharlal Nehru University.

Read the story on DNA website.