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 Development is the Key
 
A bicycle built for many
The Indian Express, India Wednesday, December 08, 2010

Bibek Debroy
In Bihar, there is a “Mukhyamantri Balika Cycle Yojana”, covering madrassas which was started in 2006. Through this, girls who pass Standard VIII are given bicycles, once they enrol in Standard IX. The Right to Education Act imposes high compliance costs on budget private schools and drives them out. It thus hinders, rather than furthers, the cause of school education. There is an implicit assumption that market failures exist and state provisioning is the only answer, writes Bibek Debroy in The Indian Express .

In Nitish Kumar’s Bihar, there is a “Mukhyamantri Balika Cycle Yojana”, now covering madrassas too. It was a scheme started in 2006. Through this, girls who pass Standard VIII are given bicycles, once they enrol in Standard IX. More accurately, girls who pass Standard VIII are disbursed (through schools) Rs 2,000 to purchase bicycles and Rs 700 for uniforms.

...

This is nothing short of phenomenal. When bicycles became safe and popular, transcending penny farthings in the 1890s, women took to them and feminists dubbed them “freedom machines”. It was said bicycles accomplished more for women’s sensible attire than all reform movements put together. The mid-term appraisal of the Eleventh Five-Year Plan has the following congratulatory words: “The Sarva Shiksha Abhiyan, in combination with the Mid Day Meal Scheme, has succeeded in achieving near universal enrolment in primary schools.” It then laments high drop-out rates and low retention. The number of out-of-school children has indeed sharply dropped (2.8 million in 2008-09). The MDMS is different. But it is doubtful the SSA proper has done much to boost primary school enrolment. Without getting into definitions of what is truly “private” school, 58 per cent of enrolment in urban India is in private schools and the figure is 32 per cent in rural India. Therefore, demand has been spliced with choice. The Right to Education Act imposes high compliance costs on budget private schools and drives them out. It thus hinders, rather than furthers, the cause of school education. But that is a separate point. Budget analysis (such as by the Haq Centre for Child Rights) shows most SSA expenditure has been on civil construction and teachers’ salaries.

Enrolment (and even drop-outs) is fundamentally a girl-child problem, especially in formerly backward states like Bihar.

...

There are other schemes that directly provide subsidies to women who need them. There is an implicit assumption that market failures exist and state provisioning is the only answer. There is a difference between state financing and state provisioning and subsidies (through conditional cash transfers) to those who need them are not antithetical to introducing choice, competition and efficiency.

Take education as a test case. Several states have education vouchers, with differing conditions. Uttarakhand has Pahal, with a stipulation that there cannot be a government school (or Education Guarantee Scheme centre) within 1 km of the habitation. Rajasthan has two separate schemes — Gyanodaya Yojana (where new secondary schools are set up by the private sector and state-funded vouchers are used) and Shikshak Ka Apna Vidyalaya (where trained and unemployed teachers set up schools in backward areas and vouchers are used). It is early days, but Uttar Pradesh proposes vouchers for poor students who wish to study in English-medium schools.

...

Fifty years ago, Friedrich Hayek wrote a book titled The Constitution of Liberty. This is what it said: “It would now be entirely practicable to defray the costs of general education out of the public purse without maintaining government schools, by giving the parents vouchers covering the cost of education of each child which they could hand over to schools of their choice. It may still be desirable that government directly provide schools in a few isolated communities where the number of children is too small (and the average cost of education therefore too high) for privately run schools.”

Obviously, this doesn’t imply the absence of regulation. Cross-country literature on conditional cash transfers isn’t unambiguous. Success is a function of the segment. However, when there is significant private sector presence, they work better. Education is a case in point, not just in India, but globally. It isn’t likely to work that well for health, not yet. Whenever one thinks of conditional cash transfers, one invariably thinks of food.

...

Once those are scrapped, it might work. Efficiency requires not just direct subsidisation, but also the easing of governmental controls.

This article was published in the The Indian Express on Wednesday, December 08, 2010. Please read the original article here.
Author : Mr Debroy is a noted economist, based in New Delhi.
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