Can we do better than “ The RTE Act ” ?

By Ashish Puntambekar

Ever since the 12th April Supreme Court order upholding the RTE Act, there has been uncertainty within the school system with both school managements and parents worried about the implications of the courts order. Schools are worried that it will ruin their finances and parents are worried that schools across India might cancel admissions to comply with the 25 % quota requirement.

The unstated question is “ Can we do better than the RTE Act ? “

Introducing “ The Indian Education Megaproject ”

Stakeholders in schools across India may be pleasantly surprised to learn that in June 2010, a landmark project “ The Indian Education Megaproject “ with a capacity to provide high quality education, totally free of cost to an additional 126 Million

children has been submitted to the Ministry of HRD & Planning Commission.

The Megaproject envisages the construction of a massive system of 30,000 New Hub Schools under Public Private Partnership ( PPP ) , across 28 states and 7 Union Territories. Each of these Hub schools will in turn share its teachers with 14 other smaller schools within a radius of 50 Km thereby covering an additional 420,000 existing Schools nationwide.

The Megaproject has a Teacher Centric concept as against the current Sarva Shiksha Abhiyaan ( SSA ) which is literacy centric. This essentially means that in order to attract qualified people the Education Megaproject provides attractive inducements to prospective teachers : Good Salaries, Excellent Housing, and free healthcare. The central idea being that if we can motivate qualified people to take up careers in education, Universal literacy will follow by itself.

System of 18 Million Vouchers

The Megaproject focuses on the poorest children by introducing a system of 18 Million Vouchers which are allotted by means of a simple aptitude test ( not a knowledge test ) administered nationwide. For the same score, the voucher will favour the disadvantaged child by using an inverse algorithm which takes into account the child’s education history and family income. The objective is to take in disadvantaged children at all age levels on a scale not possible under the RTI Act. This will dramatically reduce entry barriers to allow admission into the Megaprojects vocational school system.

The New Hub schools will be overstaffed with twice the number of teachers required to enable sharing with other smaller schools in its area. Each voucher will therefore pay for the education of 6 other children ( in addition to the winner of the voucher ), to achieve a coverage of 126 Million Children.

The Megaprojects cost of educating each child, despite a much higher quality level, is still competitive with the SSA. Most importantly the Megaproject creates massive new capacity while the RTE act leaves new school construction to individual states. In fact, the RTE Act destroys the economics of existing schools and discourages the building of new schools by private parties.

To quantify the Megaprojects impact we compare it with expected RTE Act outcomes on 12 key parameters.

1. Additional Capacity Creation : The Education Megaproject builds 30,000 New schools ( each with 600 seats ) under PPP and upgrades 420,000 existing SSA schools by sharing its qualified teachers. The RTE Act actually does the opposite, by not fully reimbursing 25 % quota implementation costs it destroys the finances of private schools thereby discouraging further private investment.

2. New Teachers Recruitment and Training :

The Govt. is still not clear where it will find the 1.2 Lakh teachers to implement RTE. The Education Megaproject on the other hand will execute a massive plan to induct and train 17.4 Lakh New Teachers. The project will deploy 10,000 search consultants backed with a Rs 800 Crore advertising budget to find suitable people from other professions. Once the people are found they will be trained in 500 New Teacher Training institutes.

3. Focus Area : Under RTE, Govt is not thinking beyond Class VIII. In comparison the Megaproject accommodates all children who are not in school. Its real focus however is class V to class XII where there is a huge shortage of over 5.5 Lakh secondary schools.

4. Capital Cost : Under RTE, the Central Govt. has abdicated responsibility by leaving the job of setting up of new schools to State Governments. The Megaproject is the exact opposite. It is a centrally sponsored scheme that will invest Rs 6 Lakh Crores over an 8 – 10 year construction period. Capital investment will create 2 Million new Jobs during construction and another 4 million new jobs in the operations phase.

5. Operating Cost : The RTE has an Operating cost of Rs. 2.3 Lakh Crores each year. Over the next 30 years it will cost the Union Budget Rs 69 Lakh Crores ( without discounting ). The Education Megaproject is however engineered to generate most of its yearly Opex of Rs. 1.93 Lakh cores within its internal Financing structure. It will need only Rs. 16,000 Crores each year from the Union

Budget. Over a 30 year period, its burden on the Union budget will be Rs 4.8 Lakh

Crores. Much lesser than the current RTE plan.

6. Sources Of Finance : As opposed to the RTE Act which will get all its 2.3 Lakh crores from the Union Budget, the Education Megaproject has 14 different and innovative pools of Finance, including :

(1) US $ 15.6 Billion currently lying un-utilized with the World bank / ADB,

(2) Increasing FSI’s on some PSU land and auctioning it to raise US $ 40 Billion

(3) 5 % of Indian Foreign Exchange Reserves

The important thing here is that the entire Capital cost of 6 Lakh Crores will be raised without a single paise coming from the Union Budget or the State Government Budgets. The money is already there but it has never been used by any government. The Megaproject simply taps into these sources in a coordinated manner. The detailed 50 page financing document is available for free download on the following link.

http://www.nataraja.org.in/site_includes/documents/Indian%20Education%20Megaproject_Financing_Structuring_And_Control_Concepts.pdf

7. Capacity of Accommodate Disadvantaged Children : The current RTE expansion plan caters to 8 – 10 Million disadvantaged children. The Megaproject on the other hand has been designed for an additional 126 Million Children because Govt. planners have missed counting tens of millions of children. In addition, there is a huge adult literacy evening scheme to include those left out over the last 20 years.

8. System Of Selection : The RTE Act leaves the identification of poor children to the Block Development Officer. This will create massive corruption as Poverty Certificates will now be auctioned. The Megaproject avoids this by implementing a system of 18 Million Vouchers , where the test system will favour the disadvantaged child. Scope for Corruption in this system is Zero.

9. Programme Control and Monitoring : The RTE Act and the current Govt. school system, lacks a proper system to monitor quality & compliance. The Megaproject instead has a sophisticated Computer system which makes all decisions totally transparent and visible. The Voucher System Algorithms will generate systemic alerts when specific triggers are hit or when timely decisions are not taken. System will be decentralized at state level with drill down functionality to the village school level.

10. Annual Cost Per Child : Implementing the RTE Act will cost the Govt. Rs. 12000 per child per year. For the Education Megaproject this number is Rs 14,490.

Under the RTI act, some of the cost is borne by private operators as the government does not re-imburse them fully. This does not happen under the Megaprojects financial structure. In fact the Megaproject subsidizes even children from higher income groups to the extent of 30 %. It therefore provides truly affordable education.

11. Quality of Education : The RTE Act will further ruin education quality as 46 % of India’s 4.7 Million Teachers have not studied beyond class XII. In Bihar just 21 % of teachers have passed their class X exams. This has happened mainly due to a Literacy centric mindset in the SSA system. In comparison, the Megaproject’s teacher centric model will deliver very high performance by sharing it 17.4 lakh Graduate Teachers backed by a massive IT Network to reach remote villages.

12. Project Objective : The Megaproject has a clear objective of constructing School Infrastructure and preparing human resources needed to support a US $ 4.5 trillion economy in India by 2025. The RTE Act, though based ostensibly on the very noble objective of social inclusion, is, in fact a populist scheme with no clear vision.

Education Megaproject Financing & Startup Issues

Education is a state subject under the constitution. Since states do not have adequate resources, the financing for this project will be enabled by central legislation and through a financing structure that the Vajpayee led NDA government first deployed to build the Golden Quadrilateral Project.

The Education Megaproject uses this same structure as Govt. of India is already very familiar with it. The only difference is that instead of a special tax on Diesel and Petrol that was adopted for financing the Roads system, the education project will use 14 different financing sources which are totally new such as using money lying un - utilized with the World Bank for example. The only thing left to do then, to get the Education Megaproject off the ground is to get Parliament to pass two separate Acts as follows :

1. The Indian Social Infrastructure Corporation Act

2. The Education Megaproject Fund Act

The first Act will set up an SPV to construct the project while the second act will enable the raising of money from 14 un-conventional sources of finance. To do this fast, the two acts can be brought in by means of an Ordinance and then ratified by Parliament within 3 months. No Political Party will oppose an Education Project so the entire process can be completed within 6 months.

It needs to be mentioned here that since Education generates massive demand within an economy, even printing money to finance schools, is in theory at least, non inflationary. The Education Megaproject however, is based on innovative financing that besides creating millions of new jobs is also a huge GDP and investment Multiplier. It is very different from the RTE Act which though good in its intention is retrogressive and un-imaginative in its execution

Forward Path

A total of 70 Pilot projects are planned with two pilot schools including a teachers training institute in each state / Union Territory to test various systems before mass rollout . Simultaneously, steps will be initiated to launch the first of four bidding rounds which by June 2014, will offer 6000 New Hub schools on PPP basis to private parties as part of Phase I.

The supreme court was very right in upholding the RTE act as it stands for Equality of Opportunity. But given the inertia we have within government, it may be necessary for School Associations, Parent Groups and Civil Society to approach the apex court once again to plead for the Education Megaproject as it is a market friendly scheme in the public interest.

Those interested in the Education Megaproject and its ideas are invited to download all the projects detailed plan documents, Project Presentation and calculations from the Nataraja Foundations website.

http://www.nataraja.org.in/masseducationproject.htm

Senior Responses to the project from The Planning Commission and other organizations is on the following link.

http://www.nataraja.org.in/site_includes/documents/Responses%20To%20Indian%20Education%20Megaproject%20_%20Upto_March_2011.pdf

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About the author :

The Megaproject’s designer is a Corporate Planner and Large Project Design Specialist with a Reliance Industries. The Education Megaproject has been launched through a Private foundation where the author works for his 8th Class Schoolteacher Mr. S Natarajan. Views expressed are personal.