As per the section 12 of Right of Children to Free and Compulsory Education Act, 2009, 25% reservation of seats is mandated at the entry level (class I or nursery) in private schools for weaker sections and disadvantaged groups. Here are five unstated benefits of section 12 to the Government.

Five benefits of 25% reservation in private schools to the Government

Image credit: The Hindu

Public financing vs. public delivery

Evidence of learning outcomes shows that private delivery of education has been much better than public delivery. Section 12 is a subtle admission of this fact. There is a rise in demand for private schooling underscored by the fact that private share in enrolment is increasing by one percentage point every year. If the government could somehow finance this demand, it would no doubt be a good tactic to please the electorate.

It should cash in this win-win opportunity and go for further public financing providing more choice to poor parents – an option between public and private delivery. Competition will ensure that only the best schools survive while the poor quality ones get eliminated.

Cost savings

The government reimburses the actual amount charged by private schools to each child or the per-child expenditure notified by the government, whichever is less. Most of the private schools are budget private schools which charge fees much lower than the notified per-child expenditure. For example, the per-child expenditure of Delhi government is Rs. 1,190 per month whereas a large number of schools, in fact as per an internal analysis, almost 80-85% of private schools charge much lower – in the range of Rs. 200-600.

Therefore, the total outgo of the government is much lower than it would be had all the EWS students studied in government schools. Because these families voluntarily chose private schooling, the oft repeated remark – “government is shirking its responsibility” doesn’t hold water.

More cost savings

The government has chosen to ignore both the capital expenditure that goes in opening a school and the administrative machinery employed to manage schools while calculating the per-child expenditure. The recurring expenditure is divided by the number of enrolled children to obtain the per-child expenditure. The exact formula is shrouded in secrecy; our RTI queries elicited no response.

Although this has deflated the reimbursement value, majority of private schools (except elite schools) are still able to factor in their capital expenditure within the reimbursement amount. In other words, private schools manage their resources much more efficiently. If only the reimbursements reached on time, the private schools will wholeheartedly accept this great school choice experiment.

Preventive wastage of expenditure

In order to fulfil its promise of one hundred percent enrolment under the Right to Education Act, the government is opening new schools all over the country in every neighbourhood. However, the birth rate is declining and the proportion of population in the age group of 0-14 years to total population has declined from 37.5% in 2001 to 29.8% in 2011 as per World Bank data.

Few years later, the huge capital expended on opening new schools would prove wasteful if there aren’t enough children to enrol. The most efficient way to prevent this is to hand out vouchers to parents who can choose to access private schooling. Since the demand for private schooling is on the rise, it can be safely assumed that these vouchers will be availed. Nevertheless, it is still worth trying.

The market is much quicker to respond to fluctuations in demand than the government. Influx of voucher-bearing parents would lead to expansion of private delivery. In later years, when the demand drops, supply will contract as much faster; private schools of course don’t worry about not offending teacher unions.

Expansion of private education

The reservation of 25% of the seats in private schools has pushed out 25% of general category children who would otherwise have availed private education. These children represent an unmet demand. This demand will be satiated by market expansion – the private education market would require up to 33% expansion (Pre-RTE: 100 general seats; Post-RTE: 75 general and 25 reserved seats. Post-expansion: Total seats=133 where reserved seats = 25% of 133 ie 33 and general seats = 100 restores the status quo ante).

This expansion is inevitable and government should facilitate it rather than hindering it with onerous recognition norms. Moreover, this private expansion is a boon since it frees up the taxpayer’s money for judicious use in areas where the productivity of government is higher.