Making INDIA a Knowledge Economy by Krishan Khanna

Sacrificer           Krishan Khanna 
Sacrifice code       wfor0351
Sacrifice date       25 march 2009

Making INDIA a Knowledge Economy
It is neccessary to understand the entire "matrix" in education.

Even after 58 years of Independence, the following situation remains as far as the Human Capital of our country is concerned:-

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

China has about 1.80 million schools, while we have in India about 0.95 million schools!

The existing Indian definition of Literacy needs to be amended to International Standards.

As per the Ministry of HRD the present illiteracy is ONLY 37% or 400 million people, while as per UNICEF and UNDP it is nearly 60% or 650 million people. China has a Literacy rate of about 93%!

The total amount spent on education is about Rs. 78,000 crores per year. 10% by the Central Govt. and 90% by the State Govts. The education Cess will collect another Rs. 6000 crores per year. The MHRD has calculated that another Rs. 40,000 crores per year would be required only for additional requirements for Primary Education!

We estimate that another Rs. 100,000 crores are required per year just to have reasonable quality of Primary and Secondary education, upto Class 10th., which is where the Central and State Govts. 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.

About 29 million people are added every year to the existing education system, which is like adding another Australia + Hong Kong + Singapore & UAE per year! Are we budgeting the educational infrastructure for this additional population increse per year?

Presently both the Central Govt as well as the State Govts. are running in Financial Deficits, of about 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.

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?

China has about 900 Universities, while we in India have about 372 Universities! Japan has 4000 universities.

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?

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.1.00 lac each for pre-coaching, amounting to Rs.6000 crores per year, for 6000 seats. These institutions spend hardly Rs.600 to Rs.800 crores per year, as their teaching budgets!
While 90% to 95% 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 3% to 5%!

India has about 5000 ITI's (Ministry of Labour) and about 7000 Vocational schools (Mininstry of HRD), while China has about 500,000 senior secondary vocational schools!

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

India can become an Educational Hub for the world and earn US$ 100 billion per year, after 10 to 15 years! We need to start now, but remove "Licence Raj" first, as was done for business in 1991!

Because of the Licence Raj in Higher and Technical Education, it is estimated that nearly 80,000 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 billion per year or nearly Rs. 40,000 crores per year, enough to build 40 IIM's or 20 IIT's per year.

If India has to become a knowledge economy we need to do the following:-
Aim for 95% to 100% Literacy in the next 10 years

Government should concentrate from KG to 10th Class and make Primary and secondary education world class, in the next 10 to 20 years!

Decontrol and involve the management of all primary schools to the local bodies such as Panchayats, Municipalities and local Citizen Groups. Allow the community to manage and participate in the running of Primary Schools in their local area

Scrap Licence Raj in Higher & Technical Education to allow innovation, creativity and excellence in Education.

Ensure that 95% of the population in the age group of 14 years to 50 years goes in for some sort of relevant Vocational Education & Training.

Allow private finance and participation in all sectors of education
Allow tax breaks and incentives for private and NRI funding, for the next 20 years or till we achive bench marks as mentioned under item 6, above.

For details kindly call for our notes and please see our website

Happy New Year!
Krishan Khanna
Chairman & Founder
i Watch
IIT-Kgp, B Tech in ME 1961

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