Privatization of education

Privatization is the transfer of an activity from the government to the private

domain:
Transfer of responsibility for providing education, from the state to private companies
Since 2001 the number of schools in private sector has grown rapidly and in the
2011-12 session it was around 21.2%.

The education segment in India is estimated to reach USD144 billion by 2020

from USD100 billion in 2015
Private sector education is estimated around USD95.8 billion and expected to
reach USD133 billion in 2020
Huge demand supply gap with an additional requirement of 200,000 schools,
35,000 colleges, 700 universities and 40 million seats in the vocational
training centres
100% FDI is allowed in education sector

Privatization of education
Education spending in India has been lower than the world average. Globally, 4.9% of GDP was spent on education in
2010 while India spent only 3.3% of GDP, according to World Bankdata.
Literacy rate is 74% as compared to world average of 84% which presents an opportunity for private players.
The spending on school education and literacy has been reduced by Rs 12,895.6 crore.
As per DISE (District Information System for Education (DISE)), 6,00,000 teaching posts at the primary level are lying
vacant in government schools across the country.
A survey held at 1,880 government schools in Karnataka revealed that schools with a PTR between 10 and 20 had the
best learning levels. Performance dropped sharply as the PTR increased, particularly when the number of children was
more than 30.
Unaided private institutes have increased from 42.6% in 2001 to 63.9% in 2012 whereas student enrolment has
increased from 32.9% to 58.9% during same period.
Increased participation of corporate sector for higher education
Students enrolled in private school in rural areas in the age group of 6-14 years has increased from 18.7% (2006) to
30.8%(2014)
*http://www.indiaspend.com/budget-2015-modis-moment-of-reckoning/jaitley-slashes-education-health-spending-67467
*http://www.dnaindia.com/analysis/column-the-pupil-teacher-ratio-has-improved-but-not-enough-2124403
*http://www.academia.edu/7836087/Privatisation_of_School_Education_A_Social_Welfare_Program_or_Industry_for_Profit
http://www.slideshare.net/ficciindia/ficci-ey-report-on-higher-education-vision-2030

Need for Privatization

Need for competitive education
Demand Side Pressure: Education is for economic and
social good
Growth in population ((41%)500 million in age bracket
of 5 to 24 years)
Financial burden on government
Fulfilling the need for skilled manpower
Knowledge explosion is taking place

Merits of Privatization
Initiatives in educational reforms
Innovativeness in teaching
Tailor made courses
Competition
Shaping of curriculum according to global standard

Forms of Privatization
increasing the number and proportion of private
providers
raising the amount of funds contributed directly by the
users of the services (i.e. students and their families)
and lowering the amount contributed through subsidies
enhancing parental monitoring of schools and school
choice over government rules and regulations

Trends of Privatization in India

29 % of Indian school children are enrolled in private
schools
With more than 50 % in urban areas, 20% in rural areas
Better teacher to pupil ratio in private schools

Trends of Privatization in India

Enrollment share more secondary at 32% ,while primary
is at 21%
Share of no private schools is low at 7 %, but they more
profits than government schools
Pass percentages have been observed better in Private
schools
Institution Type
No of seats (%) in No of Seats (%) in
Higher
education has
significant increases
1960 also shown 2005
over
the time
Engineering
15
86.5
Medical

6.8

40.9

Management

12

90

Trends of Privatization in India

Source: GOI report on educational

stats

Upside of Privatization in Higher

Education
Increasing demand is easily catered by private
institutions as government is focusing more on
elementary education
In case of Private Universities, there would be minimal
or practically no political intervention
More autonomous bodies
regulators (AICTE, UGC)

with

full

adherence

to

More ethical practices, as Private Colleges affiliated to

Universities would run the risk of being stripped of their
affiliation if they are caught engaging in such unethical

Downside of Privatization in Higher

Education
If the Private Institutions are given too much independence,
problems such as a high fee structure, capitation fee, exploitation of
professors, etc may arise
Quality of education still remains are big question
Most Private colleges although adhering to standard admission
procedures like conducting entrance tests, interviews, etc. tend to
admit students by charging an exorbitant amount as capitation fee
Foreign Universities offering courses in India may or may not be
recognized in their parent countries due to which there is no control
or restriction on the standard of education provided by these
Universities.

Privatization and RTE

Right to Education Act (RTE), was implemented in April 2010 which
makes education free and compulsory from ages 6-14.
It requires all private schools(except the minority institutions) to
reserve 25% of seats for the poor and other categories of children
(to be reimbursed by the state as part of the public-private
partnership plan
RTE is similar concept to school voucher system which is
questioned upon in many forums
Schools argue the government has partly transferred its
constitutional obligation to provide free and compulsory elementary
education to children on non-state actors

Privatization and RTE

Many also argue that voucher would deter the growth of
governments schools even more, as funds are
transferred as subsidies
Government schools form 80% of all recognized schools,
it suffers from shortage of teachers and infrastructural
gaps and Several habitations lack schools altogether
Misuse of RTE, in Bangalore As many as 90 % of the
seats allotted under RTE in private schools, are based
on false certificates (mostly income certificates)
(Source: Bangalore Mirror)

Global Trends and Reforms

Universal voucher programme: Chile
This allowed all students to enroll at either a private or a public school,
and these schools would receive a monthly payment based on the
number of students enrolled
Enrollment increased from 15 to 33 %, along with quality was sustained

Large-scale voucher programme: Colombia

The voucher was set at approximately 50 per cent of the cost of private
schooling
Only families residing in low-income neighborhoods and who had
children in public primary schools were eligible for the voucher
The greater availability of choices meant that students found schooling
that they preferred

Global Trends and Reforms

Small-scale voucher programme: Milwaukee, USA
it reduced (or at least it is intended to reduce) the inequities in the quality of
education between students in the suburbs and students in the inner cities
Any shift from education for civic participation to education for personal gain
was not been detected

Universal public school choice programme: England

This established a comprehensive state school choice programme for
families, creating a competitive market in state schooling, and tied school
budgets directly to the enrolment decisions of parents
schools are neither more nor less segregated according to ability, race or
socio-economic status than they were prior to the reforms; and there is no
evidence to show that some schools have degenerated substantially