Too High A Price

Atanu Dey, in his insightful essay – "Who Paid for My Education" – throws some light on the horrors of the Indian education system that makes the poor subsidize the rich ! :

India suffers from very low literacy even compared to other developing countries. Yet one gets to hear about the tremendous impact that Indian engineers and scientists have had around the world. This gives one the impression that the Indian schooling system works. I believe that that impression is wrong and that in fact the Indian school system is inefficient and is biased against the poor.

I estimate that my entire education in India, including a master’s in computer science, cost me less than $100 in today’s terms. I come from a middle class family and I am sure we could have afforded more than that. But I am sure that if the education had been priced at full cost, we could not have paid for it up front. Someone else paid for my education. And that is true for a very large number of people who are educated in India’s premier institutions…

Armed with all the advantages… (many) go to the US, never to return… If an educated person leaves, we lose what we have invested in his or her education. This would not be that great a loss if he or she had paid full price for the education received. But we don’t charge full price. We subsidize higher education. That is also not that great a crime. The problem is that we differentially subsidize higher education and neglect primary education.

Our constitution mandates primary education for all (see Article 8 of the Indian Constitution). Yet, 41% of children do not reach grade 5 in India… The most devastating impact of our dismal educational system is that we are condemning ourselves to a future of exceedingly low economic development. If there is one thing that growth and developmental economists have learnt, it is this: education is the most important factor in economic growth. Education has more impact on economic growth than natural resources, foreign investment, exports, imports, whatever.

Being educated entirely in India myself, I have often wondered what impact this would have on a nation like our’s. Now I know !

Is there a solution? Atanu offers one :

A brief solution to the problem of full-cost pricing is easy to state: Price all higher education at full cost. If a year of engineering school costs Rs 3 lakhs, price it at that. Then give loans to every student that needs it to pay the price. The loan is repayable upon employment and in terms commensurate with the level of employment. If you earn big dollars in the US, pay in big dollars. If you work as a doctor in a small rural village in India, pay small amounts in rupees. Essentially, once the loan system is put in place, you do away with subsidies as it becomes self-sustaining in 4 or 5 years.

The truth is out there for all of us to see. We can either ignore it or do something to change it for the better…

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1 Comment

  1. The irony is that indian banks offer financial assistance to indian students wishing to pursue education abroad, excatly the way Atanu proposes to have it for indian students pursuing higher education in india…Perhaps higher education was meant to be education in the economically “higher” countries abroad.

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