Socialism and School Choice in India

Sometimes the twists and turns of socialism yield unwitting libertarian outcomes. Indian politicians, who remain socialist at heart despite some recent liberalization, have just enacted a Right to Education Act, giving every child in the 6-14 age group the right to free and compulsory education. Only a socialist state could call a compulsory provision a right! Yet this may ultimately create the biggest school choice program in the world.

The law mandates quality standards for all private schools but none for government schools, although teaching there is so pathetic that many poor people send their kids to private schools rather than free government schools. As a socialist twist, the new law says all private schools must reserve 25% of their seats from grade 1 onward for neighborhood children from “socially and educationally disadvantaged classes” — lower Hindu castes and poor people.

The government will reimburse private schools for actual costs, or pay the cost per student in government schools, whichever is less. This will not be a classical voucher system or scholarship system. Indeed, the word “voucher” is anathema to many politicians. Yet reimbursement of private school fees is a sort of voucher, and will provide school choice to a big chunk of the population.

Elite private schools will find the system a huge tax (the voucher will not cover their actual costs), and will wind up in the courts, which will have the final say on what is reasonable reimbursement. But private schools in slums and other low-income localities already have low fees and will get full reimbursement from the government.

India has an estimated 10 million students in grade 1 in private schools. Of those, 25% or 2.5 million should get government vouchers to attend grade 1. Each year another 2.5 million children will be added as the first batch moves to grade 2. By grade 12, there will be 30 million children attending private schools with government reimbursement of fees. The actual number could be much higher, since state governments are in dire financial straits and will probably depend more on private schools than new government schools to provide the extra education to kids not yet in school.

The central and state governments have yet to negotiate the sharing of costs of universal education. State governments will suffer no penalty if they fail to provide schooling for all kids, and so many will leave their task incomplete. Besides, the new system will be beset by corruption, exclusions, and bogus muster rolls. Many kids will not be covered by the 25% quota, and others may find there are no private schools within walking distance.

Despite all this, the new Indian scheme could become, without saying so, the biggest school choice program in the world.