On paper, India's education system looks exceptional. It's one of the largest in the world and has expanded rapidly over the decades. Literacy has risen from under 20% at independence to about 77% today, and the primary school enrolment rate rose from 42.6% in 1950-51 to over 90% in 2024-25.
But once we move beyond enrolment and literacy to ask what children actually learn, the picture changes dramatically. Despite spending crores of rupees every year, half of Class V students still cannot read a Class II text, while many graduates leave college without the skills employers expect.
Unlike a factory, where output is visible every day, we can only check the quality of education years later. That makes accountability far more difficult, and far easier to avoid.
The Intrusive But Absent State
It is often said that the Indian state is intrusive in the wrong places and absent in the right ones. It focuses too much on rules that do little to improve learning. At the same time, it fails to monitor what matters most.
For example, schools must follow rigid rules on small infrastructure aspects. That hurts low-fee private schools that serve poor communities. Many face closure over minor issues like a missing boundary wall.
But the state does not track learning outcomes that efficiently. Under the no-detention approach, students are often promoted up to Class VIII even when many cannot do basic math. The state doesn't have enough capacity to narrow this learning gap. It is also difficult to solve the problem.
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Economics Behind Bad Design
Education runs on a long principal-agent chain. Students and parents are the principals. Teachers, principals, district officials, bureaucrats, and ministers are the agents. What we need here is that agents and principals have the same objective.
Parents care about children learning. But most others in the chain care more about keeping their jobs safe and reducing risk. So they focus on what is easy to check, such as classrooms, teacher degrees, toilet counts, attendance registers, and other inputs.
You can see this during NAAC inspections in colleges. Teachers and administrative staff work overtime to fix records and beautify campuses. But things like whether a teacher explains concepts well or whether weak students get extra help are much harder to measure, so these remain ignored.
This is exacerbated as authorities control approvals, transfers, and contracts, which creates room for favours and bribes. In turn, teacher unions and universities resist harsher rules that impact them. One such example is action on teacher absenteeism.
About 25% of government school teachers are absent on any given day. Teachers earn fixed pay irrespective of their attendance or quality. A study published in the Journal of Public Economics estimated that teacher absence cost Bihar and Uttar Pradesh about $1.5 billion (over Rs. 100 crore) a year. That means absenteeism is a predictable outcome when there are no monetary consequences.
What Happens When Leaders Signal Something
When something goes wrong, people don't just see the failure. They want to know who is responsible and what actions have been taken against that person.
In the corporate world, many CXOs resign after a serious lapse. After its 2017 data breach exposed the personal data of 143 million Americans, Equifax CEO Richard Smith resigned. Mostly, stock markets see resignations positively.
In politics, the logic is similar. Lal Bahadur Shastri resigning as Railway Minister after a major rail accident is the classic Indian example. A minister can demonstrate responsibility in many ways, such as explaining what went wrong, increasing transparency, announcing corrective action, or apologising publicly. But resignation remains the strongest signal because it carries a personal cost. If those in charge know they will face no consequences, the incentive to prevent future failures weakens.
Parents' Reactions
This creates a perverse loop. When paper leaks, scandals, fake universities, and even fake teachers on payrolls keep surfacing without serious action, parents and students stop trusting the system. Some give in to it, for example by paying lakhs of rupees to access question papers in advance.
Most parents respond by moving to private schools. They are ready to pay higher fees, even poor families, but don't want to enrol their kid in government schools. A recent NITI Aayog report shows this clearly. Enrolment in government schools is rising while in private schools, it is falling. That says a lot about the trust deficit.
This may help some families, but it leaves the basic problem untouched and deepens inequality.
Final Take
Weak incentives, poor governance, and limited accountability have trapped the Indian education system. This is not a money problem. As researchers like Karthik Muralidharan argue, stronger state capacity can deliver far higher returns than increasing government spending.
So the real challenge is to make the state more accountable for learning outcomes and its own failures. Until that happens, we will keep spending more to keep the broken system running.
Disclaimer: The views expressed in this article are solely those of the author and do not necessarily reflect the opinion of NDTV Profit or its affiliates. Readers are advised to conduct their own research or consult a qualified professional before making any investment or business decisions. NDTV Profit does not guarantee the accuracy, completeness, or reliability of the information presented in this article.
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