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Team Careers360|Jul 31, 2023
By VP Singh
For centuries the western education system has been lauded as it rewarded the residents with high standards of living. Unfortunately, all that could not save the western economies from slipping into miseries of high inflation and slowing demand growth. Recessionary tendency coupled with high inflation is initial symptom for possible stagflation in these economies. How to cut a way out?
The World Economic Forum in a communication on June 9, 2022 said that raising productivity, output per worker, is the solution. Productivity gains ensure higher output without raising price level. Ironically, global productivity has been falling since the global financial crisis of 2007-08. Technological progress and its implementation in production systems has slowed in the US and EU. China is fighting its own domestic battles – economic as well as the pandemic. India appears to be one source of productivity gains that may provide some relief from global inflation.
Can India accelerate the skill building process?
Historically, Indian Governments’ budgets for education, for a population so big and so poor, have been largely found to be inadequate. Union budget 2022-23 allocated around Rs 1.04 lakh crore to education. The National Education Policy (NEP) 2020 gives hope of a spend of 6% of GDP on education. This implies spending Rs 14 lakh crore on education!
The government expects total receipts (excluding borrowings) during 2022-23 to be Rs 22.8 lakh crore. Rs 14 lakh crore spend on education would constitute more than 60% of the total receipts. Since, 60% of total receipts can’t be allocated to just one sector, it is clear that state governments and the private sector must pitch in. Even that would not be adequate. Even a combined spend of Rs 5 lakh crore will take the total spend to just 50% of the suggested 6% of GDP. This shows support from foreign sector is required to get our youth educated.
A few months ago, a Rajya Sabha report about Indian students studying abroad raised some concern from some sections of the society. It said that more than 11 lakh Indian students travel abroad for studies. An estimate says that Indian students spend about $30 billion in studying abroad. Should this be a cause of concern? Is this a lost opportunity for India’s education system? Such concerns go against the spirit of globalisation and represent bad economics.
Just like spending money on foreign crude oil is not a loss for the nation, the money spent on foreign education is also not a loss. Samsung, Hyundai, Google, Dominos and Starbucks in India don’t represent loss for the nation; these, in fact, provide the necessary fillip to India’s economy.
Indian students going abroad to study adds value. Their inability to study would be a loss. From Gandhi and Ambedkar to Tata and Ambani, foreign education has added value to the country. It’s a boon of globalisation, India needs to accept it. In the world of outsourcing, what’s wrong in outsourcing education? Ultimately, what matters is getting good human resources. Moreover, out of a population of 140 crore, even if 11 lakh go abroad, there is still a huge demand to cater for. Unlocking the value of education for them is the key.
Prior to 1991, who could have imagined India to be at the forefront of information technology solutions to the world. The IT revolution in India was an outcome of market opportunities. The state had little role to play. Microeconomic interests of individuals transformed into the IT revolution in India.
Market opportunities are bringing Foxconn, Mercedes, Samsung and TSMC etc to India. Indian educators need to rise to the occasion to tap this opportunity of skilling India to yield higher productivity. Alakh Pandey of Physics Wallah has done wonders! India needs to take on this challenge, not the Indian government.
Historically, countries with high levels of investment in education have reaped benefits of higher productivity. US, UK, Japan, France, Switzerland etc. have shown this in the past. Ireland and China are more recent examples.
However, successive Indian governments have not been able to invest satisfactorily in education. India’s education system is replete with heterogeneity. In this heterogeneous mass, there is a segment which is large enough and rich enough to develop world class skills and bring suitable innovations to enhance the productivity of farms, mines, factories and services. The government has been allowing a massive increase in seats for institutes of higher learning in the last two years. The government may not have adequate resources, but it is opening the opportunity for the private sector. Indian entrepreneurs have an opportunity to tap into this irrespective of budgetary announcements.
Dr. VP Singh is professor of economics, Great Lakes Institute of Management, Gurgaon.
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