Could education be one of the four horsemen of India’s potential economic apocalypse?

In Chapter 5 of this year’s Economic Survey, tabled in Parliament on Monday, Chief Economic Adviser Arvind Subramanian lists four factors that could stall India’s push to catch up with the world’s developed economies. One factor is the creation of human capital, or, in the survey’s definition, people capable of doing the jobs on offer.

Here is how it stands: around 40% of children in Classes 3 to 8 cannot complete a reading or subtraction test prescribed for Class 2, with more children in higher classes capable of doing the test than those in lower classes. This means that children are learning, but they are not learning more as they should moving up the classes. The gap between what they know and what they should know is already wide. With technological advances this gap will widen, leaving them unable to take the jobs that advances in technology bring.

All of this is already well known. No one will contest that India’s school system – public and private – is failing its young. That a solid basic education is a necessary condition for accessing all types of opportunities, and especially higher education, is also uncontested. But there seems to be some demand-supply confusion over education and jobs.

While a great deal is said about the unemployability of Indian school-leavers and even graduates, it really is nothing more than hand-wringing. There is no evidence to suggest that investors have been stymied by the lack of prospective employees.

Remember that engineers and engineering degrees did not precede bridge-building or manufacturing. They followed it. The engineering college boom in India in the last two decades too was driven by a low-value-added computer industry. Higher education produced what industry demanded.

The school education system in India is in dire need of reform. And the question economists should be asking is this: why is it that education reforms have thus far failed to grapple with issues of equity (a corollary of quality) and what economic interests underpin the persistence of educational disparities?