A Modest Proposal — Part 2

Today I continue exploring my modest proposal for making India 100% literate. One may exclaim “How can a proposal which seeks to spend $60 billion be considered modest!?” It is a modest proposal considered in relation to the task at hand. We have around 400 million (give or take a hundred million) illiterate humans living in this day and age within the boundaries of India. It is not a small number. Educating one person at the cost of $200 is not an extravagent sum. What I am outlining is a way to use the modest amount efficiently and effectively so as to lay the foundation for a true transformation of India.

Let us put the $60 billion in perspective. India currently spend around1 percent of GDP in public primary education. That is about $6 billion. Assuming that on average $3 billion current dollars have been spent for the last 50 years, the total public expenditure on primary education has been around $150 billion. If after spending that humongous amount, we are still a largely illiterate country, a major rethinking is required.

Primary education is a fundamental prerequisite for any economy’s development. One doesn’t have the luxury of futzing around with it. You cannot do it in half measures. If you try to economize on resources for primary education, you are dooming yourself to a long impoverished future. You have to spend what it takes to deliver primary education to every citizen in the shortest possible time. If you don’t, the problem doesn’t get solved and only increases in magnitude the more you postpone addressing the problem aggressively.

The children of literate people end up being literate. Given the absense of very fortuitous circumstances, the children of illiterate poor people end up being illiterate. So if we take my big bang approach to fixing illiteracy today, we would have to spend on making 350 million literate today and we would solve the problem of illiteracy for perpetuity. Otherwise, if we just solve the problem for only 100 million of them, the 200 million illiterates would produce anonther 400 million in 20 years and you would have the problem of having 500 million illiterates in 20 years. You would be constantly falling behind. And the problem will be even more insurmountable then because you would be on the average poorer precisely because you have wasted precious human resources by having such a large illiterate population all these years.

Basic logic seems to have been a rare quality in the policy makers who were in charge of India’s destiny since its independence. Then there were about 200 million illiterates in the country. Now there are 350 million. After over half a century of independent existence, we have increased the absolute numbers of illiterates in India and after spending an estimated $150 billion.

{My arguments in this series do not depend critically on the exact numbers. So whether India spent $150 billion or only $100 billion over the last 50 odd years is not important. What is important is the order of magnitude of the numbers, not their exact values.}

Another way of thinking about this issue is this. Around 1950, India had about 200 million illiterates. Suppose India had taken a big bang approach and instead of spending $1 billion that year, it had allocated $10 billion each year for 3 years on primary education and make India completely literate. Then the total cost to the public would have been $30 billion and it would have solved the problem once and for all. On top of that, having a literate population from 1953 onwards, it would have developed more rapidly (if the country had not screwed up in other ways), and it would have had a lower population (population of developed nations grow less rapidly), and the aggregate wealth of the country would have been higher, and hundreds of millions of fewer people would have led mean, brutish, nasty, desperate and short lives. And we would not be having this discussion. We could have spent the time reading poetry or playing online games.

But that was not to be. The idiots that ruled India, and their progeny who rule India currently, have inflicted upon us a nation which has the highest number of illiterate people in the world.

Enough of bitching and moaning. The task at hand is to fix the problem once and for all. We have to put the required resources and we have to use those resources intelligently. The job cannot but be financed publicly but the public sector is not the right agency to undertake the job of actual execution. The private sector is the appropriate agency, and as I will argue later, it can do the job for the least cost. I will also detail out the immense side-effects (to use a computer science term) and positive externalities (to use an economics term) of implementing my modest proposal.

Throwing money at problems, it has been correctly pointed out, is not always the best way to solve a problem. But in some cases, you have to throw sufficient amounts of money and aim it very precisely to solve some problems. I believe that if we don’t solve this one, the country which is now terminally ill is doomed to a slow and painful death. Now is not the time to futz around with the same old socialistic policies. They brought us to this sorry state of affairs. We cannot afford to continue to go down this path any more.

{Continued in Part 3.}

Author: Atanu Dey

Economist.

5 thoughts on “A Modest Proposal — Part 2”

  1. Atanu,
    Since I forgot to close my [Devil’s Advocate] tag, I will continue here. Good points, though you haven’t addressed the specific question that Ravikiran raised (I know, you will get to it in the next one/two posts).

    You have made convincing points here (we hardly needed any convincing on this issue) that delaying this is only going to increase the direct and more so indirect costs on India.

    “and we would solve the problem of illiteracy for perpetuity.”
    Not unless the literate people are convinced that literacy has in fact changed their lives. Not unless there are incentives for the literates to ensure that their children are too. Not unless they see that their failure to rise from poverty is not due to literacy, but in spite of it. Kerala did not solve the problem of illeteracy for perpetuity. Not unless sustainability is maintained.

    “you have to throw sufficient amounts of money and aim it very precisely”
    Absolutely. FOCUS is the key word. Rather than a 2% cess, a focused approach is necessary.

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