Monday, October 30, 2006

Excellent Paper on Needed Educational Reforms in India

I find that my friend Krishan Khanna (Chairman & Founder of i Watch, the Wake Up Call for India) has produced an excellent paper on the subject of the reforms that are needed, in the educational sector in India, if we are to have any hope of solving our looming talent shortage in India.

He has kindly given me permission to publish it here.

Making INDIA a Knowledge Economy

It is necessary to first understand the entire "matrix" in education. Even after 59 years of Independence, the following situation remains as far as the Human Capital Development of our country is concerned:

1. Drop-out rate in schools from KG to 10+2 is (including those who never attended school) 90% to 94%.

2. China has about 1.80 million schools, while we have in India about 1.10 million schools!

3. The "Governance" in Government run schools is very low. In many cases teachers are absent (15% to 60% absenteeism) from schools in rural and urban schools of India and are paid full wages and perks in spite of this! Studies have shown that even the poorest of the poor rather send their children to un-aided schools where fees have to be paid and not to government run free schools. The quality of schooling of such unaided schools is higher than Government schools although the salary of Government teachers is two to three times higher than the teachers of the un-aided schools.See articles and solutions on governance at

4. The existing Indian definition of Literacy (if you can write your name you are literate) needs to be amended to International Standards. This criteria is used in the census for determining the literacy rate.

5. As per the Ministry of HRD the present illiteracy is ONLY 37% or 430 million people, while as per UNICEF and UNDP it is nearly 60% or 650 million people. China has a Literacy rate of about 93%.

6. The first step of making India a knowledge economy is literacy and needs to be given A1 priority.

7. The total amount spent on education is about Rs. 91,000 crores per year. 15% by the Central Govt. and 85% by the State Governments The Education Cess will collect another Rs. 7000 crores per year. This is about 3.3% of GDP. The MHRD has calculated that another Rs. 40,000 crores per year would be required only for additional requirements for Primary Education!

8. We estimate that another Rs. 100,000 crores are required per year just to have reasonable quality of Primary and Secondary education, up to Class 10th., which is where the Central and State Governments should concentrate for the next 10 to 20 years, or till we have at least 95% Literacy and at least 80% of the population who are completing the High School stage or Class 10th.

9. As per our estimates the total expenditure for education is nearly 8% of GDP, about 3.3% from Government and about 4.7% from private participation. This includes funding of unaided schools and colleges + bribes and capitation fees + payment for students studying abroad + tuition classes +coaching classes +private I.T. & Software training institutes. Most of this private funding is confined to urban areas where only 30% stay.

10. About 7% to 8% of the youth who finish the 10+2 stage (pre-university) enter the17, 963 colleges of India. 70% of all graduates are B.A. or Arts graduates. Is this relevant today? Most of these so called graduates are not-employable.

11. Of all new employment taking place nearly 60% are self employed. About New Employment - 1% is with government, 2% with the private 'organized sector' and 97% with the 'unorganized sector'.

12. Presently there is little connect between education and employment generation & quality of life

13. The employers associations, chambers of commerce and other business organizations are fragmented. There is no "National Common Minimum Program" for "education and training of manpower" in India. In most developed and developing countries the Chambers of Commerce (who represent the employers and business) Lead from the front.

14. About 26 million people are added every year to the existing education system, which is like adding another Australia + Hong Kong + Singapore & UAE per year!

15. Presently both the Central Government as well as the State Governments are running in Financial Deficits, of about 9% to 11% of GDP, so the question of additional financing for education will strain not only the existing budgets but also put pressure on other sectors, where funds are being presently allocated.

16. “Licence Raj” runs all Higher & Technical Education in India. Let us Bench-Mark with USA, Germany and Japan, the three largest economies of the World account for nearly 50% of the world's GDP. Do their governments exert similar controls as we have in India? Can we learn from them? There is fierce competition between the institutions in these countries for excellence!

17. China has about 900 Universities, while we in India have 362 Universities. USA has 3600 and Japan has 4000!

18. In India, the fees of the courses, pay-scales to the teachers, appointment of the head of the Institution and the syllabus, are decided by the 58 or more Central and State-Government Boards of Education. Will this create innovation, excellence and world class students?

19. The Coaching Business is getting bigger than the Education Business, entrance examinations for the IIT’s, IIM’s and a few prestigious management schools attract about 600,000 applications (who spend nearly Rs.2.00 lac each for pre-coaching, amounting to Rs.12,000 crores per year, for 6000 seats. These institutions spend hardly Rs.800 to Rs.1,100 crores per year, as their teaching budgets!
20. While 75% to 85% the youth of the developed and developing world learn a skill or competence or trade between the ages of 14 to 35, by Vocational Education & training, in India it is hardly covers 2% to 3% of the population!
21. India has about 5000 ITI’s (Ministry of Labour) and about 5000 Vocational schools (Ministry of HRD), while China has about 500,000 senior secondary vocational schools!

22. India has 300 million able bodied unemployed between the ages of 18 to 50, but they have no skill sets and therefore not employable! Employers in India are facing a huge shortage of skilled manpower. Wages and salaries in India, of skilled manpower are going up too fast. India will not be able to take advantage of the demographic profile of its population, if the youth do not receive relevant and quality Education & Training.

23. We have not seen any co-ordination between the Ministry of Labour and the Ministry of HRD as far as VET planning on a National level, is concerned.

24. We in India have NOT still appreciated the fact that, world wide, Education is 5 times or 500% bigger than I.T. or software!

25. India can become an Educational Hub for the world and earn US$ 100 billion per year, after 10 to 20 years! We need to start now, but remove "Licence Raj" first, as was done for business in 1991! India has 7,700 foreign students while Australia has 383,000 foreign students!

26. Because of the “Licence Raj” in Higher and Technical Education, it is estimated that nearly 70,000 to 90,000 students leave India every year for studying abroad. At any given time these 320,000 students cost the country a foreign exchange out flow of nearly US$9.6 billion per year or nearly Rs. 45,000 crores per year, enough to build 40 IIM’s or 20 IIT’s per year. Nearly 1,20,00 students leave India every year for foreign studies.

27. The present problem of reservation will not solve the needs and aspirations of the youth. India needs a larger number of educational Institutions, seats and higher quality in the area of Higher & Technical education. Rationing, quotas and reservation can never address the actual situation. The Central and State governments are strapped for funds even for Primary and Secondary education. The solution lies in complete decontrol of all forms of Higher & Technical education; the same way as business was delicensed in1991!

28. Since 1947 we have tried reservation and controls in the allocation of steel, cement, colour TV's, airline tickets, cars, scooters, etc and have failed. Only increase of supply and decontrol has finally solved these issues.

If INDIA has to become a Knowledge Economy we need to do the following:

1. Aim for 95% to 100% Literacy in the next 10 years

2. Decontrol and involve the management of all primary schools to the local bodies such as Panchayats, Village Groups, Municipalities and local Citizen Groups. Allow the community to manage.

3. Consider the use and issue of "Education Coupons" for school children, so that they can choose the schools of their choice and funding from the government, which would have been dispersed for the funding of Government run schools in rural and urban India, should be paid out. See

4. Scrap “Licence Raj” in Higher & Technical Education, after and including class 11th, to allow innovation, creativity and excellence in Education. See

5. Ensure that 80% to 90% of the population in the age group of 14 years to 50 years goes in for some sort of relevant Vocational Education & Training. See

6. Allow starting of Enterprise Skills Education, ESD, from Class 5th to the 12th. This will teach the youth about how the real world works. Only 100 hours per year required. Nearly 60% of the workforce in India is self-employed. See

7. Start Prevocational classes from Class 8th. Have Vocational Counsellors in all Higher Seconadary Schools. Upgrade all Higher Seconadry Schools for Vocational Education & Training.

8. Have a dynamic interaction between all stake holders, Academia-Industry-Business-R&D-Chambers of Commerce-Student bodies-Parents organizations-Civil society and NGO's. Chambers of Commerce, who represents the employers and business, must lead from the front.

9. Allow private finance and participation in all sectors of education, till we reach the goals as mentioned under item 8 in section one above.

10. Allow tax breaks and incentives for private and NRI funding, for the next 20 years or till we achieve bench marks as mentioned under item 8 in section one above.

Krishna Khannna
Chairman & Founder
i watch…… INDIA Sphere: Related Content

Sunday, October 29, 2006

Further reflections on solving India's talent shortage (aka education crisis)

I have already argued earlier, in this Blog, that the single most effective move for sorting out the talent shortage (or educational crisis in India) would be to entirely deregulate primary and secondary education. Let the market sort out what works and what does not. There should only be final exams at state and national levels, so that there are comparable results.

The present system of inspections and controls only tends to extreme corruption in our BIMARU states, though in other states the situation is not as bad – I make both statements on the basis of recent personal experiences in India.

State aid and subsidies should be gradually withdrawn, and incentives and rewards given to entrepreneurs willing to create schools that take educationally and economically poor students and get them through the state/national exams at above average levels. That will only work if there are state-wide and nationwide exams at which students are incentivised to do as well as possible, so that it is clear who is doing well and who is not – say at ages 8, 12 and 16.

Alternatively, entirely abolish schools and move to internet-based technical and vocational education – and why should a gifted child of, say, 12 have to sit through 4 more boring years of irrelevant and unhelpful subjects in order to study for a Bachelor's or a Master's degree?

Rather than spending government money in creating more schools, colleges and universities, why not offer tax-incentives for IT/ Pharma/ Space/ Nuclear and other knowledge-intensive companies to set up their own programmes for gifted 12-year olds that will produce first-rate scientists and technologists by the time they are 16 or 18 or 20 in the fields in which the companies want or need them? Sphere: Related Content

Saturday, October 21, 2006

Nano food nonsense

I see that a manufacturer has now announced a a chocolate 'slim' shake "containing nanoclusters" which, the manufacturers apparently claim, carry nutrition "directly into the cell".

Unable to verify the claim using Google (which produces only 7 hits when searched for "chocolate slim shake nano direct cell" - none of them relevant), I thought it worth drawing attention to the nonsensicality of the claim.

*All* food is digested by the body (as needed, in the alimentary canal), and is then taken by the blood "directly to the cells" where that nutrition is needed or otherwise should be delivered.

So whether or not a product contains any special "nanoclusters" is not relevant to the process.

Certain "nanoclusters" could conceivably *impede* the process but I can't think of why or how they would *enhance* or by-pass the process. And, if they did so at all, they should certainly not help you to stay slim and/or lose weight. Rather the opposite! Sphere: Related Content

Friday, October 20, 2006

Is colonialism always bad? (The case of Japan in Korea)

Though it does not raise the broader question (above), and though it is not going to be liked by Korean nationalists, a new book documents the positive impact of Japanese colonialism on Korea (Young-Iob Chung, Korea Under Siege, 1876-1945: Capital Formation and Economic Transformation. New York: Oxford University Press, 2006. xv + 390 pp. $74 (cloth), ISBN: 0-19-517830-0).

Being Indian, I usually think of the question of colonialism in terms of British colonialism in India.

This book provides a useful comparative perspective. I have followed the development of Japan for some time, though my interest has been in Japan post-WWII, and this book significantly extends my knowledge into an earlier period.

It is politically unfashionable to defend colonialism, and I am not sure that there is any moral justification for it.

However, colonialism is "natural": more vigorous and able societies have always colonised less vigorous and able societies in human history - and will probably always do so.

Positively, this enables an inferior culture to learn rapidly and deeply from a superior culture in ways that the colonised culture is usually unable to do because of institutional barriers to learning.

Beyond that generalisation, I guess it is right to assess each colonial legacy in terms of how much it deliberately destroyed versus what it positively tried to contribute.

So British colonialism was better than French or German or Russian or Chinese colonialism in the twentieth century, because the British did not deliberately destroy anything except what they needed to in terms of their economic interests, and they put a certain proportion of money and effort back into the history, archaeology, economic development, infrastructure, education and culture of their colonies. By learning as much as they taught, they left behind new colonial-style institutions that became fundamental to the self-definition of their ex-colonies in almost every case. Sphere: Related Content

Thursday, October 19, 2006

British Airways' new campaign against religion

It is interesting to see the furore developing in the UK over Nadia Eweida's wearing, on her necklace, a cross.

Nadia Eweida is of Egyptian descent and has for years been a highly-regarded employee of British Airways, but she was suddenly asked to remove her cross because it was held to be no longer in conformance with BA's regulations regarding uniforms.

The cross in question is the size of a five-pence piece or, for those not familiar with old British coins, about the size of three thumbnails.

Media discussion seems to be focusing on whether or not wearing such a symbol is "essential" to Christianity. However, that is entirely beside the point.

Why has British Airways suddenly starting persecuting people who wear a cross?

This is not, I understand, because BA is anti-Christian.

It must therefore be because British Airways believes that eliminating the cross will help health and hygiene. As well as the punctuality with which aircraft take off and arrive. Not to mention the level of service to passengers.

This is a victory to the campaigning atheists and secularists who are fortunately gaining ascendancy in British Airways.

It is indeed admirable to see atheists, secularists and British Airways now joining the band of those who do not tolerate beliefs that deviate from their own. Sphere: Related Content

Monday, October 16, 2006

Open Letter to the Indian Finance Minister on co-operatives

Dear Finance Minister

Much of India's progress over the decades since India's independence was due to the encouragement of India's co-operatives.

However, the most recent national budget has imposed taxation on co-operative bbanks.

This is an entirely unnecessary and backward step. It will not raise much by way of revenue for the government but will discourage these banks and make life even more difficult for them than it is already, in terms of competition from the commercial national and international banks.

Co-operative banks serve the poorest sections of Indian society and need continued encouragement, not discouragement.

I urge you to remove this new taxation on co-operative banks and restore the situation to what it was before the current year

yours sincerely

Prabhu Guptara Sphere: Related Content