Sell All Municipal Schools

Poor parents are voting with their feet by shifting their kids from free government schools to budget private schools. The government has failed to provide quality education. Here’s an unintuitive solution for Mumbai. Sell municipal schools. Use the proceeds to fund the education of the poor.

The BrihanMumbai Municipal Corporation (BMC) has closed 35 municipal schools in the last two years because enrollment has halved in the last decade. This has caused some public hand wringing and wishful thinking. Outdated ideas like “the poor’s only avenue of good education is a municipal school” and “public schools do so well in the US and UK and we should try to emulate that” abound. Public intellectuals yearn for some magic wand that will improve the quality of education imparted such that everyone – rich and poor alike – would want to put their children in government schools.

Instead of hankering after the impossible, maybe we should open our eyes to the revolution quietly taking place. Poor parents aren’t removing their children from municipal schools to stop their education. They’re enrolling their children in budget private schools. They show a clear preference for paid private schools over the free education the BMC offers them.

Why would someone pay for a service when the same service is being offered for free?

The answer is simple: it’s not the same service.

Municipal education is widely considered to be inferior to the education provided by budget private schools. All parents, including poor ones, have the best interests of their children in mind. Many of them prefer spending money to get a private education for their children. This, even though only two of India’s best budget private schools are located within the BMC’s geographical reach.

Praja Foundation’s white paper on the State of Municipal Education in Mumbai – December 2017 does an excellent job of showing the true picture on municipal education in Mumbai. (Disclaimer: I served as Praja’s CEO from 2002 to 2006). There is widespread unhappiness with municipal education. 46% of parents are unhappy with the quality of education, and 41% consider that studying in a municipal school does not provide their children the opportunity for improving their academic and occupational prospects in the future. Exam results show this too: 69% of BMC school students passed the Maharashtra State’s Secondary School Certificate (SSC) exam in 2017. 92% of private school students passed. This despite the BMC spending Rs. 44,394 per student in the 2016-17 academic year.

What’s the solution? Instead of throwing good money for bad education, I suggest a simpler method. Get the government out of education. Let parents decide – and for poor parents, pay them a fixed sum per child for education.

How do we get the money for this? There is no need to raise any new tax. The BMC is sitting on pots of gold!

Let’s run some “back-of-the-envelope” numbers. The BMC runs more than a thousand schools. Assuming, at a conservative rate, each school is worth at least Rs 100 crore, based on the land value alone. The BMC’s education department is sitting on at least Rs 1 lakh crore (Rs 1 trillion) if it sells these schools and gives a decent FSI to the buyers. According to the Praja white paper, the BMC spends approximately Rs 50,000 per student per year and has a total enrollment of 343,621 students for the 2017-18 academic year. One lakh crores will pay for 58 years of education at the current level. The BMC should simply pay each poor family a fixed amount to educate their children and let the parents decide which school is best.

Currently, even without the BMC giving this kind of subsidy, poor parents are choosing budget private schools. Enrollment at BMC run schools has halved over the last decade, while the population of Mumbai has grown by approximately 17%.

This isn’t a radical idea. The BMC anyway rents out space in its closed schools to community organizations and NGOs. For many years Praja Foundation ran its offices out of the BMC’s Topiwala Lane Municipal School on Lamington Road. Taking it a step further and selling the schools themselves would yield much higher revenues. To check if this is the right solution, ask a poor person where they send their kids to school. My parents’ maids send theirs to a private school. If they send their children to the municipal school, ask them what they would do if they had an extra Rs 50,000 per child per year. Continue with municipal education? Or use the money for a budget private school?

Let these answers from the poor be a guide to policy makers.

Pratham and other NGOs who trust the BMC to somehow improve the education it provides are living in a fantasy world. Poor parents are moving with their feet and sending their children to budget private schools. The BMC can either continue in its anachronistic ways or get with the program and play a part in truly revolutionizing education in this, India’s premier megapolis.

About the author

Yazad Jal

Yazad Jal is Fellow, Economic Policy at the Takshashila Institution.
Previously he worked for McKinsey and IBM in the United States and
before that in the non-profit sector in India, last serving as CEO of
Praja Foundation in Mumbai. Yazad has an MBA from Yale University and
a BA (Econ) from St. Xavier’s College, Mumbai University.