Innovative financing structures focussed on outcomes can go a long way in bridging the education gap in India.
Highlights:
South Asia is the second-lowest achieving region in the world, with less than 30 per cent of children achieving minimum proficiency level in math and reading. There are approximately 20 million children in India who are either not enrolled or do not attend school regularly. Without the opportunity to gain basic competencies, these children stand a small chance of meaningfully participating in the skilled labour market. Without skilled citizens, India will be unable to advance at the same pace as the rest of the world.
Most Indian children perform below grade level in both literacy and numeracy, which leads to reduced life chances and poor employment opportunities. As the crisis has become clear, the Government of India has started to focus increased attention on learning outcomes.
Unfortunately, the pathway to achieving quality education is not as straightforward as just improving access. India remains well-below international levels of educational achievement in both literacy and numeracy. This has a considerable impact on the workforce – less than 10 per cent of the 495-million strong working population possesses an employable skillset, as per a 2018 report by MSDF.
The government is the largest provider of education in India despite a considerable migration to affordable private schools in recent years. India currently spends 2.7 per cent of its GDP on school education, considered both ‘insufficient’ and ‘inefficient’ by the World Bank. Of this, 34.5 per cent is spent on infrastructure through the Sarva Shiksha Abhiyaan, and anywhere from 50-80 per cent of the remaining budget is spent on teachers’ salaries. This leaves little room to correct for quality in key areas of remedial education, non-academic development, curriculum development and teacher professional development.
The need for directing impact investment towards education in India is urgent and important and innovative financing structures, focussed on outcomes, can go a long way in bridging the gap.
India Education Outcomes Fund, Social Finance India’s flagship initiative, aims to create an ecosystem of sustainable funding by bringing together key stakeholders to work together towards a common set of learning outcomes. It also aims to channel $1 billion towards improving learning outcomes and deliver on India’s Sustainable Development Goal of ensuring “inclusive and equitable quality education and promote lifelong learning opportunities for all” by 2030.
Ashutosh Tyagi is the Head of Social Finance India, a not-for-profit enterprise that helps bring private risk capital into the social sector.
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