Kapil sibals us $ 1.52 trillion disasterous execution plan for indian education
1. Kapil Sibal's " US $ 1.52 Trillion " Disasterous Execution Plan for Indian Education
20th July ‘ 2012
Under Kapil Sibal's leadership , the RTE Act as envisaged today, is going to cost the
country Rs 69 Lakh Crores ( Rs 2.3 Lakh Crores each year ) over the next 30 years.
while allowing for a capacity expansion that will provide for 8 - 10 Million dis-advantaged
Children ( net addition mostly by persuading private schools through legislation ) upto
the class VIII level.
Given its current commitments within the Govt School system ( SSA system ), most of
this money will be spent on OPEX items such as Salaries and Maintenance ). Therefore
the Government's RTE Scheme does not have a specific plan to build the massive
number of New Schools & Teacher Training Institutes that are so urgently required,
especially at the secondary level where there is a shortage of 5,50,000 ( 5.5 Lakh )
schools in India according to the Planning Commission. Children are dropping out of
school after class V because there are no schools to go to .
Essentially, under Kapil Sibal's plan, India will be spending Rs 69 Lakh Crores ( US $ 1.52
Trillion) over 30 years, without any significant CAPEX PLAN to build new schools.
Significantly, new school construction is left to the state Govt's which do not have any
money. In fact even the 8 - 10 Million children ( addition ) mentioned above is being
achieved by asking existing private schools to accomodate dis-advantaged children in a
manner which kills private enterprise in education.
By 2018 , according to the Indian 2011 Census document and an earlier 2007 WHO
Report , over 300 Million ( Three Hundred Million ) young people are going to enter the
Job market in India. There are no large projects to employ these young people, 70 % of
who have not studied beyond class V, and Govt of India is talking about being able to
sustain a US $ 4.5 Trillion Economy ( assuming an 8.5 % ) GDP growth rate with a
workforce that has not studied beyond class V. Already the first 5 % of these young
people have started arriving on the street ... Imagine what will happen when the balance
95 % arrive. It is to be noted separately that over the last 7 years, the Planning
Commission, under Dr. Montek Singh Ahluwalia’s leadership has not initiated a single
large project in any sector of the economy that will create employment on the massive
scale that is required.
Given all this it is suicidal to have a Non Existent Capex Plan for New School
Construction... but India is doing this ... and NO ONE is even questioning either the
Planning Commission or Mr Kapil Sibal / Ministry of HRD about what is clearly a "
Cockamanie " Implementation of the well meaning RTE Act.
A totally different Type and Scale of thinking is required to solve the serious problems of
school and teacher shortages in India.
Introducing ... The Indian Education Megaproject
It may interest readers to know that an alternative project " The Indian Education
Megaproject " has been submitted to the Planning Commission and the Ministry of
HRD in June 2010 which Creates additional, world class Capacity within the school
system on a massive scale while improving accessibility and greatly reducing cost of
2. Education in India. The Megaproject plan actally has been uploaded into Mr. Kapil
Sibal's office computer by his secretary Mr. V Uma Shankar ( IAS ) in my presence,when
I went to meet him at Shastri Bhavan.
It is essentially a centrally sponsored scheme where the Central Govt Steps in ... to
assist state Govt's in the construction of thousands of new schools and then lets them
operate the schools as Education is a State Subject under the constituton.
The Education Megaproject has the following defining characteristics :
1. Megaproject will build 30,000 New Schools across 28 states and 7 Union Territories
& Share its Teachers with 420,000 existing Schools ... to cover an additional 126
Million Children till class XII by 2024. Focus will be on Secondary Education.
2. Budgetary Support Required for Operations over 30 years is Rs 4.84 Lakh Crores
( 1/15 th the budgetary burden of the RTE Act ) as the Project uses alternative financing
and does not need much central or state budgetary support. The Project's Capex of Rs
6 Lakh Crores is also funded by 14 different sources outside the Governments Balance
Sheet. Those interested may refer to the 50 page financing supplement on the link
below to see how Rs 6 Lakh Crores can be raised.
3. Project is Market Friendly and encourages New Schools...All 30,000 New Schools are
under PPP. The Innovation within the Megaproject is in its Financing.
In the attached Article " Can we do better than the RTE Act " , the Right To Education
Act ( RTE Act ) has been compared with the Indian Education Megaproject on 12
In fact, to implement the spirit of the Right to Education, It makes sense to go for a
Project based solution that expands the School System in India on a Massive Scale.
Such a project based implementation will also encourage private sector participation in a
Project Designer, The Indian Education Megaproject
http://www.nataraja.org.in/masseducationproject.htm ... Please visit link to download all
project documents including detailed Excel Calculations
The Author is a Corporate Planner and Large Project Design Specialist based in Mumbai. He has 20 years of
experience in the Energy and Infrastructure Sectors ( Refineries, LNG Terminals, Ports, Pipelines, Power plants with CO2
sequestration etc ) besides 5 years of hands on experience in Trading Crude Oil and Product financial derivatives on all
OTC Markets and Exchanges around the world. He is a published author with papers on the Geopolitics of Crude Oil and
security of South Asia. His current interests are in Education, Healthcare and Urban Development in the Large Project
Design Area where his focus is on Financial Innovation to raise cash required for large public projects. His latest project is
the Mumbai Megaproject, a US $ 308 Billion investment plan for Mumbai and Maharashtra.
The Indian Education Megaproject is a private initiative launched under the aegis of the Nataraja Foundation where the
author works for his 8th Std schoolteacher Mr. S Natarajan, who commissioned the Education Megaproject exercise.
Views expressed are personal.
3. Can we do better than “ The RTE Act ” ?
By Ashish Puntambekar
Ever since the Supreme Court order on the 12th of April, upholding the RTE Act,
there has been huge uncertainty and panic within the school system in India with
both school managements and parents very worried about the implications of the
courts order. Schools are worried that it will ruin their finances and parents are
panicking at the thought that schools across the nation might cancel admissions
for the coming year to comply with the 25 % quota requirement.
The unstated question in peoples minds is “ Is there a better way than the RTE
Act ? “
Introducing “ The Indian Education Megaproject ”
Stakeholders in schools across India may be pleasantly surprised to learn that in
June 2010, a landmark project “ The Indian Education Megaproject “ with a
capacity to provide high quality education, totally free of cost to 126 Million
children had been submitted to the Ministry of HRD and the Planning
The Education Megaproject envisages the construction of a massive system of
30,000 New Hub Schools under Public Private Partnership, across 28 states and
7 Union Territories. Each of these Hub schools will in turn share its teachers with
14 other smaller schools within a radius of 50 Km thereby covering an additional
420,000 Schools nationwide.
The Megaproject has a Teacher Centric concept as against the current Sarva
Shiksha Abhiyaan ( SSA ) which is literacy centric. This essentially means that in
order to attract qualified people the Education Megaproject provides attractive
inducements : Good Salaries for teachers, Excellent Housing, and Free
Healthcare. The central idea being that if we can motivate qualified people to
take up careers in education, Universal literacy will follow by itself.
System of 18 Million Vouchers
The Megaproject focuses on the poorest children by introducing a system of 18
Million Vouchers which are allotted by means of a simple aptitude test ( not a
Knowledge Test ) administered nationwide. The objective is to take children at all
age levels into the school system on a scale not possible under the RTI Act. This
will dramatically reduce entry barriers to allow admission into the Megaprojects
vocational school system. For the same score, the voucher will favour the
4. disadvantaged child by using an inverse algorithm which takes into account the
child’s education history and family income. The New Hub schools will be
overstaffed with twice the number of teachers required to enable sharing with
other smaller village / slum schools in its area. Each voucher will therefore pay
for the education of 6 other children ( in addition to the winner of the voucher ), to
achieve a coverage of an additional126 Million Children across India.
The cost of educating each child, despite a much higher quality level, within the
proposed Megaproject system, is comparable to that which is currently achieved
within the SSA. Most importantly the Megaproject creates massive New Capacity
while the RTE act on the other hand leaves New School Construction to the
individual states. In fact, the RTE Act destroys the economics of existing schools
and discourages the building of new schools by private parties.
To quantify the massive beneficial impact, the Megaproject has been evaluated
against expected RTE Act outcomes within the prevailing School system on 12
1. Additional Capacity Creation : The Education Megaproject adds 30,000 New
schools ( each with 600 seats ) under Public Private Partnership and upgrades
420,000 existing SSA schools by sharing its qualified Teachers. The RTE Act
actually does the opposite, by not fully reimbursing 25 % quota implementation
costs it destroys the finances of private schools thereby discouraging further
2. New Teachers Recruitment and Training : Govt. of India is still not clear where
it will find the 1.2 Lakh teachers to implement the RTE. The Education
Megaproject on the other hand will execute a massive plan to induct and train
17.4 Lakh New Teachers. The project will deploy 10,000 search consultants to
find suitable people from other professions and back up the recruitment drive
with a Rs. 800 Crores advertising budget. Once the people are found they will be
trained in 500 New Teacher Training institutes set up under Phase I.
3. Focus Area : Under RTE, Govt is not thinking beyond Class VIII. In
comparison the Megaproject accommodates all children who do not have a
school. Its real focus however is class V to class XII where there is a huge
shortage of over 5.5 Lakh secondary schools.
4. Capital Cost : Under RTE, the Central Govt. has abdicated responsibility by
leaving the job of setting up of new schools to State Governments. The
Megaproject is the exact opposite. It is a centrally sponsored scheme that will
invest Rs 6 Lakh Crores over an 8 – 10 year construction period. In doing this it
will also create 2 Million new Jobs in the construction phase and catalyze another
4 million new jobs nationwide by 2030.
5. Operating Cost : The RTE has an Operating cost of Rs. 2.3 Lakh Crores each
year. Over the next 30 years it will cost the Union Budget Rs 69 Lakh Crores
( without discounting ). The Education Megaproject is however engineered to
5. generate most of its yearly Opex of Rs. 1.93 Lakh cores its internal Financing
structure. It will need only Rs. Sixteen Thousand Crores each year from the
Union Budget. Over a 30 year period, its cost to Govt. of India will be Rs 4.8 Lakh
Crores. Much lesser than the current RTE plan.
6. Sources Of Finance : As opposed to the RTE Act which will get all its 2.3
Lakh crores from the Union Budget, the Education Megaproject has 14 different
and innovative pools of Finance, including :
(1) US $ 15.6 Billion currently lying un-utilized with the World bank / ADB,
(2) Increasing FSI’s on some PSU land and auctioning it to raise US $ 40 Billion
(3) 5 % Dis investment in Public Sector Undertakings
(4) Using 5 % of Indian Foreign Exchange Reserves
(5) A 0.02 % tobin Tax on Forex Transactions
The important thing here is that the entire Capital cost of 6 Lakh Crores will be
raised without a single paise coming from the Union Budget or the State
Government Budgets. The innovation in this project is therefore in its financing.
The money is already there but it has never been used by government. The
Megaproject simply taps into these sources in a coordinated manner. The
detailed 50 page financing document is available for free download on the
7. Capacity of Accommodate Disadvantaged Children : The current RTE plan
catersto an expansion for only 8 – 10 Million disadvantaged children in addition
to the millions already covered under the SSA. The Megaproject on the other
hand has been designed for an additional 126 Million Children because Govt.
planners have not properly counted tens of millions of children.
8. System Of Selection : The RTE Act leaves the identification of poor children
to the Block Development Officer. This will create massive corruption as Poverty
Certificates will now be auctioned. The Megaproject avoids this by implementing
a system of 18 Million Vouchers which will be won through a simple aptitude test.
The objective is to take children at all age levels into the school system on a
scale not possible under the RTI Act. This will dramatically reduce entry barriers
by allowing admission to all into the Megaprojects vocational school system. For
the same score on the test, a disadvantaged child will be given a preference.
Scope for Corruption in this system is Zero.
9. Programme Control and Monitoring : The RTE Act and the current Govt.
school system, lacks a proper system to monitor quality and compliance. The
Megaproject instead executes a large IT system that floats on a massive and
sophisticated Computer network making all decisions totally transparent and
visible. The Voucher System Algorithms will generate systemic alerts when
specific triggers are hit or when decisions are not taken within specified time
6. limits. System will be decentralized at state level and will allow granular and drill
down functionality to the village school level.
10. Annual Cost Per Child : Implementing the RTE Act will cost the Govt. Rs.
12000 per child per year. For the Education Megaproject this number is Rs
14,490. This cost will be absorbed by the project. For the children of
disadvantaged groups, of course, the education if totally free. Under the RTI act,
some of the cost is borne by private operators as the government does not re-
imburse them fully. This is a sort of penalty for setting up a private school. This
does not happen under the Megaproject financial structure. In fact the
Megaproject subsidizes even children from higher income groups to the extent of
30 %. It therefore provides truly affordable education.
11. Quality of Education : The RTE Act will further ruin education quality as 46 %
of India’s 4.7 Million Teachers have not studied beyond class XII. In Bihar just 21
% of teachers have passed their class X exams. This has happened mainly due
to a Literacy centric mindset in the SSA system. In comparison, the Megaproject
will deliver very high performance by sharing it 17.4 lakh Graduate Teachers
backed by a massive IT Network to reach remote villages. In addition, the project
has a huge, IT driven, adult literacy evening programme to include people who
have missed out over the last 20 years.
12. Project Objective : The Megaproject has a clear objective of constructing
School Infrastructure and preparing human resources needed to support a US $
4.5 trillion economy in India by 2025. The RTE act, though based ostensibly on
the very noble objective of social inclusion is in fact a populist scheme with no
clear vision in its execution.
Education Megaproject Financing & Startup Issues
Education is a state subject and since the states do not have adequate
resources, the financing for this project will be enabled by central legislation and
through a financing structure that the Vajpayee led NDA government first
deployed to build the Golden Quadrilateral Project. They also set up a Special
Purpose Vehicle (SPV), named the National Highways Authority (NHAI) to do the
The Education Megaproject uses the same structure as Govt. of India is already
very familiar with it. The only difference is that instead of a special tax on Diesel
and Petrol that was adopted for financing the Roads system, the education
project will use 14 different financing sources which are totally new, such as
using money lying un - utilized with the World Bank for example. The only thing
left to do then, to get the Education Megaproject off the ground is to get
Parliament to pass two separate Acts as follows :
1. The Indian Social Infrastructure Corporation Act
2. The Education Megaproject Fund Act
7. To do this fast, the two Acts can be brought in by means of an Ordinance by the
Government and then ratified by Parliament within 3 months. No Political Party
will oppose an Education Project so Its safe to say that the entire legal process in
Parliament can be completed within 6 months.
The first Act will set up an SPV to construct the project while the second act will
enable the raising of money from 14 un-conventional sources of finance. It needs
to be mentioned here that since Education generates massive demand within an
economy, even printing money to finance schools, is in theory at least, non
inflationary. The Education Megaproject however, is an excellent scheme based
on innovative financing that besides creating 2 million new jobs during its
construction phase and nearly 3 million new jobs during its operations phase is
also a huge GDP and investment Multiplier. It is very different from the RTE Act
which though good in its intention is retrogressive and un-imaginative in its
A total of 70 Pilot projects are planned with two pilot schools including a teachers
training institute in each state and Union Territory to test various systems before
mass rollout in 2014. Simultaneously, steps will be initiated to launch the first of
four bidding rounds which by June 2014, will offer 6000 New Hub schools on PPP
basis to private parties as part of Phase I.
The supreme court was very right in upholding the RTE act as it stands for
Equality of Opportunity. But given the inertia we have within government, it may
be necessary for School Associations, Parent Groups and Civil Society to
approach the apex court once again to plead for the Education Megaproject as it
is a market friendly scheme in the public interest.
- Concluded -
Indian Education Megaproject ( Main Files For Download ) :
Those interested in the Education Megaproject and its ideas are invited to
download all the projects detailed plan documents, Project Presentation and
calculations from the Nataraja Foundations website.
Senior Responses to the project from The Planning Commission and other
organizations is on the following link.