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Unaided effort

Private sector cannot take up government's tasks

Business Standard Editorial Comment  |  New Delhi 

The Supreme Court has upheld the constitutional validity of the provision in the Right to Education Act that all schools need to reserve 25 per cent of their seats for economically disadvantaged students. In doing so, it has rejected the contention of private schools that the law violated their right to freedom. Private schools are of two types: those that are aided by the government and those that are not. Asking the aided ones to block seats for poor students may make sense, just like it does to ask private hospitals that have been subsidised by the government to treat a certain number of poor patients free. True, many schools that say they are unaided nevertheless received land and various other inducements from the government - which does mean that the government can claim the right to put certain conditions on their operation. But the logic of asking completely unaided schools to reserve seats for poor students is flawed.

Even aided schools have argued that the benefits they get from the government fall way short of the burden the 25 per cent reservation will put. The reservation may force private schools, aided as well as unaided, to raise their fees. For the parents of many students, this will be like a new tax. Note there is already an education cess on regular taxes. While two-thirds of this money is earmarked for primary education, one-third is for secondary education. In spite of this cess, if the goal of universal education has to be met through reservation in private schools, it clearly shows that the money has not been utilised effectively. The reservation is also tacit admission that the quality of education is better in private schools than in government schools. Also, the Right to Education Act exempts minority schools, both aided and unaided, from this reservation. Again, the logic of this discrimination is not clear.

While the gains from affirmative action are there for all to see and the benefits of education cannot be overemphasised, it is clear that the United Progressive Alliance has tried to push its social inclusion agenda through the private sector. There has been talk, every now and then, of reserving jobs in the private sector along the lines of the government sector: 15 per cent for Scheduled Castes, 7.5 per cent for Schedule Tribes and 27 per cent for Other Backward Classes. This might even be possible for factories located in semi-urban and rural areas. But it would be a human resource nightmare for service sector enterprises in large cities.

Similarly, the new Companies Act has mandated all companies to spend two per cent of their net profit on corporate social responsibility, or CSR. The argument goes that the corporate sector has so far failed to play its role in social inclusion and charity. What is being overlooked is that the world over it is business people, not companies, who do charity. A company's primary responsibility is towards its shareholders. The CSR requirement is likely to result in malpractices of every kind, such as while deciding which non-governmental organisation to fund and which village to adopt. Social inclusion in a hierarchical society like India is a desirable - even essential - goal, but the government has to choose the vehicle for it wisely. The private sector cannot be whipped into delivering goods and services just because the government has failed.

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First Published: Thu, May 08 2014. 21:38 IST
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