A recent survey conducted by Pearson India revealed that 60% of

the students in Andhra Pradesh & Telangana were not

employable. Though the survey doesnt take anyone by surprise,
it gives us an opportunity to reflect upon our dying education
system. In my last post, I explained how the government
intervention is killing research and affecting teaching standards in
the country. Here, in the light of the survey, I want to look at the
education system in Andhra Pradesh and study its passage in the
last two decades to see how the government handled it. You will
see how the education system benefitted when the govt loosened
its grip, and how it got destroyed when the same govt intervened
and distorted the market.
Government loosening its grip
When Chandrababu Naidu became the CM of Andhra
Pradesh in 1995, the state was on a complete decline financially.
He had to somehow revive the economy. Realising the potential of
the IT sector, with a single minded focus, he worked to attract
investments into the sector by de-regulating the processes. In his
book "Plain Speaking" he recounts how he went out of his way to
convince Bill Gates to set up Microsoft in Hyderabad which
completely changed the face of AP. It was a huge achievement
considering the fact that Bangalore had already grown into an IT
hub by then. As a part of creating the IT ecosystem, the first
thing he did was to make it relatively easy for people to set up
engineering colleges. When he assumed the office, there were

only some 20 odd engineering colleges, when he left, that figure

went up to 220. All through his stay in the office, his party was
part of the ruling alliance at the centre. So he was able to
pressurize the centre to get permissions for establishing new
engineering colleges since the whole process was under centre's
purview. Yet times he had to literally fight with the central
regulatory authority for technical education (AICTE) to ease up
rules.
Once the engineering colleges started adding up, and the IT
industry started coming in, it created an enormous interest in the
people of the state to take up engineering course. This created
huge demand for junior colleges offering EAMCET(state entrance
exam for engineering) and IIT oriented coaching. To cater to the
demand a lot of corporate junior colleges started mushrooming.
The state government eased the rules a bit in this area, but
mostly bribing would work in overcoming regulations. Once
colleges were established, there was intense competition between
these colleges. This created an unprecedented phenomenon,
where in these junior colleges would scout for the best talent in
the state and compete to enroll them in their colleges, in the hope
that if properly coached they would secure good ranks in EAMCET,
and increase the colleges reputation. So they would offer
concessions ranging from 25%- 100% on college fees depending
on the students score in the 10th standard. A student whether
rich or poor if he had scored over 90% in his 10th standard would
be eligible for free quality education(including boarding).

It didn't stop here. The idea percolated further down, and

there started coming up lot of model and corporate type schools.
Again the competition forced them to find the best talent. These
schools, dozens in number, every year conduct scholarship test
for students for 5th standard and above, and top performers are
given free schooling. Today, in AP, a 5th standard student, if he
shows signs of merit, he will not be left behind for lack of
finances. This is disbursing Scholarships the market way, the
right way. Not only that, James tooley, a professor of Education
policy from England, came to hyderabad in 2001 to study how the
poor were getting educated. He mentions this in his book "The
beautiful tree" about how he was delighted to find so many low
cost private english medium schools costing only a dollar a month
at that time. And they were incomparably better than any public
schools in the localities.
But then the accepted wisdom is private education institutes
are only there to exploit us. Yet they achieved this despite all the
draconian rules and regulations. They made the best out of a very
narrow opening they were provided. When there is a clear
purpose and when there is competition fuelled by little to no
entry-barriers, private businessmen, to earn profits, need to
provide quality. It is only when government stifles entry into the
market, existing ones become complacent. Here, in the case we
discussed, there was a clear demand for technical resource for
the IT industry. From parents to students to educational institutes
everyone knew what they were doing. This is in a way a

purposeful education. Here, I am not talking about the purpose at

the micro level of how a particular lesson/subject would benefit
the student..we have a long way to go before we talk about that,
but on a broader level the purpose was evident.
The criticism is that people say this made robots out of the
students, with virtually everyone being forced to become an
engineer. Two things to this: one, it is a choice parents and
students make, you can't complain about that; you need to use
your wisdom. Two, this was nowhere an ideal system. Growth was
fuelled by the government so there will be discrepancies like
cronyism and concentration of growth in the sector the govt picks.
But as long as the two important resources for industry: land and
power are firmly in the govts control, there is little choice but to
look for the government initiative. This case study is only to give
an idea of how even a little freedom can make a great difference.
If we look at the number of students getting admitted into IITs, we
will understand the whole effect this little phenomenon had from
a national perspective. Every year, an average of 20% of the
students that get qualified to IITs are from AP alone. This has been
happening for more than a decade now. No other state comes
close to this achievement.
Government Distortion
After experiencing this relative success at the junior college
and the primary education level, the next logical step should have

been to free the engineering education from govt control and let
the competition prevail. Or at least not ruin it by further
intervening. But what followed was a disaster. A perfect casestudy for market distortion.
In 2008, the congress govt under YSR, introduced a Fee
reimbursement scheme for engineering students, which many say
brought him back to the power in 2009 elections. Fee
reimbursement scheme, in other words, government sponsored
scholarships to buy votes. Since government was paying the fee,
everyone started enrolling to engineering courses whether they
were worthy of it or not. Because of this inflated demand, new
colleges started cropping up just to encash this phenomenon
without any real intention to provide education. Since there was a
cap on the fees colleges can charge, existing colleges had no
incentive to improve the quality. Even as the standards started to
fall more and more engineers were coming out. This is what is
reflecting in the Pearsons survey. The bubble had to burst at some
point, and it did. People started finding it difficult to get jobs for
the poor quality of education. "Engineering degree would get you
an IT job" had started slowly fading away. The demand came
crashing down. Lakhs of seats were left vacant and colleges
started shutting down.
Learning the wrong lesson

But the problem here is, people learn the wrong lesson. They
think, increase in number of engineering colleges or lack of
infrastructure is the problem. Hence they call for more regulation
in allotting the engineering colleges. The issue here is Govt's
intervention and distortion. Otherwise abundance is something
we must celebrate. Competition will take care of improving
infrastructure and teaching standards. During Naidus regime too
colleges increased, but there was a genuine demand due to the
industry coming in. Here in the YSRs case the colleges started
coming up to encash the government scholarships. Also one can
compare it with this scenario. In early 2000s, with the service
industry started coming in there was a huge demand for "English
medium" education even at the lower end of financial spectrum.
As this report suggests, AP recorded 100% increase in english
medium schools during the period from 2003-06. Highest in the
country. But this was a market driven phenomenon, hence we
didn't hear of schools shutting down until the Govt passed a
draconian law named "right to education" in 2010. A clause in the
law demands a certain minimum standards of physical
infrastructure (number of classrooms, a playground, a library,
etc.). As per one report, if strictly applied, 95% of schools in the
country won't comply with these standards. And the above
mentioned schools from the James Tooley's research, which have
been educating the poor are now shutting down.
Where the government is absent

But interestingly, there is one area of education that escaped

government's eye and is doing very well. Private tuition/coaching
centres. They need no licences..need not spend on any
unnecessary infrastructure, they are at liberty to charge whatever
they want... As a result, they can give more attention to the
student to achieve better results. Unlike schools and colleges,
there are no entry barriers here. Anybody can start a
coaching/tuition centres. Once they gain some reputation and
earn some money, they can use it to get licenses for schools and
colleges. It is evident as one of the biggest educational institutes
in AP, Narayana group of Institutes, started as a coaching centre. I
personally studied in a school which started as a tuition centre.
From coaching 4-5 students for the 10th standard maths in a
small verandah, it has emerged into a group of institutions and
has now become the most popular brand in that area. But what is
the popular notion? that imposing norms will improve standards.
Far from it. When you impose infrastructural standards, you are
denying those people with genuine talent and interest, but
financially lacking to meet those standards. But then the Govt. is
set out to destroy even this sector. Enter RTE. Each and every
word of the act is destructive. Lot of articles have been written
criticising it. But there is a clause that is relevant to the
discussion.. which didn't get the attention it deserved. Clause 28:
No teacher shall engage himself or herself in private tuition or
private teaching. This is for any school teacher, private or public.
This is a cruel violation of human right. A punishment for taking

up teaching profession. A move, if strictly implemented, will

destroy tuition centres..and all the good that has been discussed
above. This is what happens when government plans things.
And then there are these software institutes which are
proving to be the lifelines of engineering education today. Since
they are not confined to any particular curriculum, they can
design their own courses. As a result, they are able to bridge the
gap between the sluggish education system and the dynamic
needs of the industry. There is a place called Ameerpet in
Hyderabad, where the bulk of these institutes are located. Here is
where the actual engineers are made. Even the industry has
direct tie ups with some of these institutes and send their
employees to get coached here. This report estimates that one
lakh students every year take advantage of institutes in Ameerpet
alone. Clearly, sans regulation, this area has been able to inject
the much needed sense of purpose to an otherwise lacklustre
system.