Debate Topic: Should the Government direct its investments towards primary education than setting up institutes like IITs and IIMs?

Here I go...

The Government! Today’s topic for debate, ladies and gentlemen, revolves around the Government. I take the freedom to assume that my friends in the coordinating side of this event had the Indian Government in mind, as far as this debate is concerned.

So the question is: where should our government direct its investments? To the upgradation of the highly inadequate primary education infrastructure of the nation or to the development of many more IITs and IIMs. The inherent assumption here is, the government isn’t rich enough to do both the tasks at the same time. It has to decide. Pick one over the other.

Let me be very clear about something. India as a nation needs both. It for sure needs a much much healthier and efficient primary education network and it of course needs more IITs and more IIMs.

Why primary education?
Because primary education lays the foundation for a more productive labor force through promoting literacy and numeracy. It also provides the foundation for secondary and tertiary education and training. Research has clearly shown that primary education has direct and positive impacts on earnings, farmer productivity as well as health and poverty alleviation benefits.

Why more IITs and IIMs?
Though this could be a topic of yet another debate, let me just quote McKinsey's ex-MD, Rajat Gupta, “In 50 years, the IITs have barely doubled. For a country that aspires to grow at the pace we want, it’s choking the opportunities for our young people.” There are in fact less than 300,000 graduates of IIT at this time. This sure is an extremely small number in the context of a population of over 1 billion people.

The only issue for today, which in my opinion, needs to be sorted out is the role that the government needs to play. And I strongly believe that the Indian Goverment should take the responsibility for the primary and basic education rather than letting its limited budget flow away in setting up high-level high-brand-value institutes. But since India also cannot afford not to have premiere institutes like these, the government should at least let the private players take care of higher education arena. Let me now go ahead and substantiate my stand based on a simple concept of economics.

It is generally accepted in the literature on public economics of investment that there would be a case for public investment if an activity or area shows a greater social rate of return than the private rate of return. On the other hand, if the private rate of return is greater, then that activity could be left up to individual private investors. And every related data that you look at will clearly tell you that the social return of setting up basic education facilities always exceeds the private rate of return.

To put it in simplest of words, if the Government is not going to work for the primary education, who else is going to? If you don’t setup a new Indian Institute of Management, someone else will come and build an Indian School of Business in your country.

But if you don’t setup a school in a remote village and ensure that the teacher sent there does teach, no child from that village is ever going to know what IIM stands for. So tell me, is the decision, really that hard to make?