RTE Act Vs. The Indian Education Megaproject ... A Comparison on 12 Key Parameters - Printable Version

+- Forums (
+-- Forum: Indian Politics, Business & Economy (
+--- Forum: Indian Politics (
+--- Thread: RTE Act Vs. The Indian Education Megaproject ... A Comparison on 12 Key Parameters (/showthread.php?tid=46)

RTE Act Vs. The Indian Education Megaproject ... A Comparison on 12 Key Parameters - ashish_puntambekar - 06-23-2012


Over the next 30 years the RTE Act is going to cost the country Rs 69 Lakh Crores while allowing for a capacity expansion that will provide for 8 - 10 Million Children ( net addition ) upto the class VIII level.

Given its current SSA expenditure commitments, the Government's RTE Act therefore does not have a specific plan to build the massive number of New Schools that are so urgently required, especially at the secondary level ( Currently there is a shortage of 5,50,000 + secondary schools in India according to the Planning Commission ).

Essentially, we will be spending Rs 69 Lakh Crores , Without Adding much New Capacity as most of the money will be spent on Opex items such as salaries to run the present system. In fact even the 8 - 10 Million addition mentioned above is being achieved by asking existing private schools to accomodate dis-advantaged children.

Introducing ... The Indian Education Megaproject

It may interest readers to know that an alternative project " The Indian Education Megaproject " has been submitted to the Planning Commission and the Ministry of HRD which Creates additional, world class Capacity on a massive scale while improving accessibility and greatly reducing cost of Education in India.

The Education Megaproject has the following defining characteristics :

1. Megaproject will build 30,000 New Schools across 28 states and 7 Union Territories & Share its Teachers with 420,000 existing Schools ... to cover an additional 126 Million Children till class XII by 2024. Focus will be on Secondary Education.

2. Budgetary Support Required for Operations over 30 years is Rs 4.84 Lakh Crores ( 1/15 th the cost of the RTE Act ) as the Project uses alternative financing and does not need much budgetary support. The Project's Capex of Rs 6 Lakh Crores is also funded by 14 different sources outside the Governments Balance Sheet.

3. Project is Market Friendly and encourages New Schools...All 30,000 New Schools are under PPP. The Innovation within the Megaproject is in its Financing.

In the note pasted below, the Right To Education Act ( RTE Act ) has been compared with the Indian Education Megaproject on 12 Different Parameters .

In fact, to implement the spirit of the Right to Education, It makes sense to go for a Project based solution that expands the School System in India on a Massive Scale.


Ashish Puntambekar

Project Designer

The Indian Education Megaproject

The Author is a Corporate Planner and Large Project Design Specialist with a fortune 500 company. Views expressed are personal.


Can we do better than “ The RTE Act ” ?

By Ashish Puntambekar

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

The unstated question in peoples minds is “ Is there a better way 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 126 Million children had been submitted to the Ministry of HRD and the Planning Commission.

The Education Megaproject envisages the construction of a massive system of 30,000 New Hub Schools under Public Private Partnership, 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 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 : Good Salaries for teachers, 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. The objective is to take children at all age levels into the school system on a scale not possible under the RTI Act. This will dramatically reduce entry barriers to allow admission into the Megaprojects vocational school system. 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 New Hub schools will be overstaffed with twice the number of teachers required to enable sharing with other smaller village / slum 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 an additional126 Million Children across India.

The cost of educating each child, despite a much higher quality level, within the proposed Megaproject system, is comparable to that which is currently achieved within the SSA. Most importantly the Megaproject creates massive New Capacity while the RTE act on the other hand leaves New School Construction to the 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 massive beneficial impact, the Megaproject has been evaluated against expected RTE Act outcomes within the prevailing School system on 12 key parameters.

1. Additional Capacity Creation : The Education Megaproject adds 30,000 New schools ( each with 600 seats ) under Public Private Partnership 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 :

Govt. of India is still not clear where it will find the 1.2 Lakh teachers to implement the 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 to find suitable people from other professions and back up the recruitment drive with a Rs. 800 Crores advertising budget. Once the people are found they will be trained in 500 New Teacher Training institutes set up under Phase I.

3. Focus Area : Under RTE, Govt is not thinking beyond Class VIII. In comparison the Megaproject accommodates all children who do not have a 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. In doing this it will also create 2 Million new Jobs in the construction phase and catalyze another 4 million new jobs nationwide by 2030.

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 its internal Financing structure. It will need only Rs. Sixteen Thousand Crores each year from the Union Budget. Over a 30 year period, its cost to Govt. of India 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 % Dis investment in Public Sector Undertakings

(4) Using 5 % of Indian Foreign Exchange Reserves

(5) A 0.02 % tobin Tax on Forex Transactions

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 innovation in this project is therefore in its financing. The money is already there but it has never been used by 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.

7. Capacity of Accommodate Disadvantaged Children : The current RTE plan catersto an expansion for only 8 – 10 Million disadvantaged children in addition to the millions already covered under the SSA. The Megaproject on the other hand has been designed for an additional 126 Million Children because Govt. planners have not properly counted tens of millions of children.

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 which will be won through a simple aptitude test. The objective is to take children at all age levels into the school system on a scale not possible under the RTI Act. This will dramatically reduce entry barriers by allowing admission to all into the Megaprojects vocational school system. For the same score on the test, a disadvantaged child will be given a preference. 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 and compliance. The Megaproject instead executes a large IT system that floats on a massive and sophisticated Computer network making all decisions totally transparent and visible. The Voucher System Algorithms will generate systemic alerts when specific triggers are hit or when decisions are not taken within specified time limits. System will be decentralized at state level and will allow granular and 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. This cost will be absorbed by the project. For the children of disadvantaged groups, of course, the education if totally free. Under the RTI act, some of the cost is borne by private operators as the government does not re-imburse them fully. This is a sort of penalty for setting up a private school. This does not happen under the Megaproject 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 will deliver very high performance by sharing it 17.4 lakh Graduate Teachers backed by a massive IT Network to reach remote villages. In addition, the project has a huge, IT driven, adult literacy evening programme to include people who have missed out over the last 20 years.

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 in its execution.

Education Megaproject Financing & Startup Issues

Education is a state subject and since the 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. They also set up a Special Purpose Vehicle (SPV), named the National Highways Authority (NHAI) to do the construction work.

The Education Megaproject uses the 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

To do this fast, the two Acts can be brought in by means of an Ordinance by the Government and then ratified by Parliament within 3 months. No Political Party will oppose an Education Project so Its safe to say that the entire legal process in Parliament can be completed within 6 months.

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. 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 an excellent scheme based on innovative financing that besides creating 2 million new jobs during its construction phase and nearly 3 million new jobs during its operations phase 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 and Union Territory to test various systems before mass rollout in 2014. 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.

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

- Concluded -