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November 23, 1998


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Business Commentary/ Dilip Thakore

Auction PSUs, invest in children and education

Another Children's Day has come and gone. November 14 which is observed as a day on which political leaders, social scientists, intellectuals and people in general focus on the state of children, failed to arouse extraordinary debate about the fate of this nation's youngest citizens.

This year, media reports evaluating the welfare and well-being of the nation's children were rarer than usual due to the continuous fudging of the obstinately high birth rate problem and the neglect of contemporary India's children by all political parties and their leaders, and Indian society in general.

Unlike the industrialised developed nations, India is a nation of the young. Children who are less than 14 years of age make up 40 per cent of the population. And minors (below 18 years of age) constitute the majority of the citizenry.

Consequently, if this nation were a committed democracy, the interests and well-being of this segment of the population would be the paramount concern and focus of the Union and state governments and of society generally.

But the reality is quite the contrary. Indeed it is difficult to believe that there is a nation-state in the contemporary world which accords shabbier treatment to its child population.

For a start, for over four decades, the national allocation for education has averaged barely 3.5 per cent of gross domestic product. This foolish parsimony is highlighted by the United Nations Development Programme statistics which indicate that the global annual outlay for education averages five per cent and that the industrially developed nations routinely allocate 5 to 7 per cent of their much larger GDP for the furtherance and improvement of their school systems.

It should be an eye-opener for the wiseacres in the Planning Commission who have been drawing up rosy plans for the Indian economy for half a century that even poor and industrially backward nations such as Kenya, Malawi and Algeria allocate a larger percentage of their GDP towards education.

This major mistake of consistently according low investment priority to education has been compounded by the skewed pattern of education sector outlays in post-Independence India.

At best only 40 per cent of the annual education expenditure is spent on the primary education sub-sector. The consequence of this distorted pattern of allocating already meagre outlays for education is that 48 per cent of the nation's adult population -- over 300 million citizens -- are comprehensively illiterate.

In this context it is important also to bear in mind the official test of literacy; an individual who can read and write his/her name and recognise three alphabets of any language is classified as literate. If more rational tests of functional literacy are applied, it is a fair bet that over two-thirds of the nation's adult population is illiterate. Hence the UNDP's terrifying statistic: by the turn of the century, 50 per cent of the world's illiterates will be Indians!

To pile on the agony, even the meagre outlay for elementary education is administered poorly. A well-known statistic is that over 92 per cent of central and state government grants for education is spent on teachers' salaries. This leaves very little spend for school buildings, furnishings, books etc. Thus, only 48 per cent of the nation's primary schools offer drinking water facilities, 38 per cent have only one instructional room and only 15 per cent have lavatory facilities.

Little wonder that 48 per cent of students who enroll for primary education drop out before making it to class V. And mind you these are national averages. In the backward states of India such as eastern Uttar Pradesh, Bihar and Rajasthan, elementary education facilities are in worse repair and illiteracy rates are in the high seventies.

Not surprisingly, this nation has the world's largest child labour force estimated at 44 million. And child abuse and child prostitution are rife.

When confronted with these and other statistics testifying to the bewildering neglect of education and the well-being of the nation's children, the standard answer of the government establishment is lack of (money) resources.

Yet governments of all shapes and ideological hues are reluctant to cut down the huge subsidies routinely extended to institutions of higher education. Thus for example, students' fees in the arts and science facilities of Calcutta's prestigious 180-year-old Presidency College are Rs 12 to Rs 15 per month. And though this might be an extreme example, monthly fees in universities seldom exceed Rs 50 per month.

Finance for elementary education is always a constraint not only because of the heavy subsidisation of tertiary-level education, but also because huge resources which could be profitably invested in building the education infrastructure are locked up in a large number of chronically loss-making public sector (government-owned) enterprises which require continuous budgetary support.

A proposal which I have repeatedly made for the global auction of PSEs in a phased manner and the creation of a consolidated fund for education from the sales proceeds has neither provoked a response from the government quarters nor stimulated a debate within the intelligentsia.

Yet given that a fully-equipped rural primary school for 100 students is unlikely to cost more than Rs 20 million to construct, the possibilities flowing from the auction sales of the central government-owned (the state government owned-PSEs are a different proposition) PSEs with an asset value estimated at Rs 4.5 trillion are immense.

However, it is highly unlikely that politicians of any party are likely to sacrifice the juicy commissions and powers of patronage generated by PSEs for a low priority item such as education.

Consequently the onus of forcing a massive canalisation of investible resources into elementary education had devolved upon the nation's intelligentsia. The recent award of the 1998 Nobel Prize for economics to the India-born Professor Amartya Sen, who has consistently argued that greater investment in human resources is the prerequisite of the economic growth and development of Third World nations, has lent legitimacy and urgency to the creation of irresistible public pressure upon governments to stimulate an overdue boom in rebuilding the nation's elementary education infrastructure.

Democratic India owes this debt to its children who constitute the majority of the national population. It's time to discharge it. Fully and substantially.

Dilip Thakore

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