Can Prime Minister Narendra Modi’s repeated promises of “co-operative and competitive" federalism provide the country a platform for resolving its ever deepening learning crisis?

The problem is well known. In the last 15 years, the Indian government has invested heavily in providing universal access to elementary education. However, as the Annual Status of Education Report (ASER) reminds us every year, access to schooling is yet to translate into an education. In 2006, 53% of children in standard 5 could read a standard 2 text. In 2014, this dropped to 48%.

But even as the country has come to acknowledge the learning crisis, far less has been said about the institutional failures in the current delivery system that led us to this crisis and even less about institutional reforms needed to fix it.

In the last 15 years, the central government’s expenditure on education has increased over nine-fold, making the government of India (GoI) an important player in shaping policy priorities for states. Much of this increase has been on elementary education routed through the flagship Sarva Shiksha Abhiyan (SSA). The bulk of the state governments’ budget for elementary education is now used for paying teacher salaries (in states like Rajasthan, this accounts for over 90% of the total elementary education budget), leaving states entirely dependent on the SSA for non-wage related expenditure. Three important consequences flow from this.

First, to implement SSA, GoI created an institutional system that runs parallel to state education departments. Over the years, as SSA funds increased, so did the power of this parallel system, leaving line departments starved of money and decision-making authority. To illustrate, in one instance a state government needed money to restructure its teacher-training model. To access SSA money, it had to seek GoI approvals through the state SSA authorities. GoI, however, refused to provide money because the re-structuring wasn’t aligned with the prescribed framework, leaving the state with no resources. This dominance of SSA has unleashed a turf war between line departments and SSA authorities, as states struggle to hold on to power—and in the process many good ideas have failed to get implemented. But, more egregiously, increased power to SSA has entrenched a “one size fits all" version of federalism where centralized norms undermine state-specific needs and priorities.

Second, the process of SSA budgeting is deeply flawed. States are rarely given a budget envelope in advance of planning. And the final budget approved by GoI has little bearing on what states actually ask for—in some years the gap can be as much as 50%, rendering the planning process irrelevant. So states have no incentive to measure, assess and articulate their real learning needs.

Last, the centralized approach, by its very own logic, makes a focus on learning difficult. Building an outcomes-focused system requires grappling with complex issues of curriculum design, pedagogical practice and teacher accountability systems. None of these issues are conducive to one-size-fits-all models. For instance, recent empirical work demonstrates that goal-oriented, targeted efforts to align curricula and pedagogical strategies to student learning levels, rather than grade-level expectations, can result in significant learning gains. Autonomy, flexibility and measurement are the key ingredients of ensuring this alignment. This is the opposite of what a centralized system can deliver.

So what can be done to reverse this one-size-fits-all, input-focused approach to elementary education? Here is Accountability Initiative’s proposal: replace the SSA with a cooperative, competitive three-window funding mechanism.

The first window is an annual grant for states to meet the Right to Education (RTE) requirements. The RTE mandates that all states meet a set of infrastructure and teacher norms and short of an amendment to the RTE Act, states will need to fulfil these requirements. States should estimate their infrastructure requirements over a three-year period, which the centre can fund annually. Based on our estimations of current expenditure, this window should account for no more than 50% of the current annual SSA budget.

The second window provides a formula-based, untied learning grant financed over a 3-5 year period. Funding through this window should be based on a long-term learning strategy articulated by state governments and linked to clearly articulated annual learning goals. Since this is an untied grant, the centre will no longer need to busy itself with negotiating line-item expenditure. Rather, it can focus on providing technical support and guidance to states. This is real “cooperative" federalism, where the centre, rather than playing headmaster, shifts gear to overseeing finances, building knowledge, undertaking assessments and facilitating knowledge sharing between state governments.

In the spirit of competitive federalism, we propose a third window—an annual performance-based window that rewards states based on achievements against goals and targets for learning. Not only will this create competition amongst states, it will also give a much needed fillip to the process of regularly measuring learning progress. In 2014, GoI kickstarted a country-wide effort to measure progress by financing state-level learning assessments. But the process lacks teeth. Linking assessments to budgets will go a long way, both in ensuring that states design these assessments well and that learnings from the assessments feed directly in to state policy.

Of course, there are limitations to this approach. Decentralization to the state is only the first step toward creating an outcome-focused delivery system. Moreover, performance-based financing has associated incentive risks, like encouraging a “teaching to the test" approach. But, given the nature of India’s learning crisis, this is a risk worth taking. On 28 February, finance minister Arun Jaitley is set to announce his first full-year budget amid wide expectations of big, bold reforms. While most opinion makers and commentators are keen on reforms that will fuel growth, the truth is that there will be no growth if India’s work force is not equipped with basics. Bold reforms in education is what budget 2015 needs.

(Based on a paper co-authored with Ambrish Dongre, Avani Kapur, Anit Mukherjee and T.R. Raghunandan.)

Yamini Aiyar is a senior research fellow at the Centre for Policy Research and director of the Accountability Initiative.

Close