Improving human capital formation in India

The paper examines the state of human capital in India. It looks at areas such as primary and secondary education, and their interrelationships with health care. It also looks at the private sector and tertiary education as areas where institutional changes can be made.

The authors argue that a range of further measures need to be undertaken to provide a stronger institutional framework for improving educational endowments, as well as public service delivery more generally. In India, the government is active in both education and health but the private sector also plays an important role, notably for heath, and to a lesser extent in education. At present, the quality and quantity of the outputs from education, and also form public health care, are holding back the process of economic development. Steps are being taken to draw more children into primary education and the paper considers ways to keep children in school. It also considers institutional changes that may help to improve the performance of the educational system and so boost human capital formation.

Conclusions and recommendations include:

• considerable progress has been made through such government initiatives as those designed to draw more children into schools through projects such as the “Free Mid-day Meals” and the “Education for All” programmes
• further action along the lines of cash grants in exchange for attendance, as in a number of Latin American countries, may be necessary in five of the poorest states where two-thirds of the out-of-school children are found 
• these grants should be, for equity purposes, financed directly by the centre. However, while school attendance is necessary for closing the literacy gap, it is not sufficient 
• the number of teachers is limited, making attendance and quality essential to compensate for a lack of numbers. Here transparency and accountability to the local population is essential to ensure that educational outputs are high. It will be necessary to measure and publicise performance results for schools, at the primary level.