2020 - RP - Future of Work in India - Reddy2020

The Indian Journal of Labour Economics (2020) 63:199–224
https://doi.org/10.1007/s41027-020-00227-4
ARTICLE
Future of Work and Emerging Challenges to the Capabilities

of the Indian Workforce
Narasimha D. Reddy1
Published online: 17 July 2020

© Indian Society of Labour Economics 2020
Abstract
In recent years, there have been unprecedented changes in technologies driven by
automation, robotics and artificial intelligence, the fusion of which is referred to
as the Fourth Industrial Revolution (I-4) with a potential to change the future of
work. One of the worldwide concerns is on the employment effects of I-4. There are
two scenarios—one called as “automation anxiety” that focuses on labour substitu-
tion effects and the other which is “optimistic” of technological complementarity
of creating new jobs. Either way, what is certain is that the nature of the future of
work will not be the same as it is in the present, and the future workforce needs
agile capabilities. The preparation for such a challenge begins with the foundational
school education. This paper, after a brief overview of the debate on the impact of
I-4 on employment, turns to the issue of the preparedness in India in terms of the
foundational education at the school level. Based on the evidence, it documents the
deep learning crisis in school education in India and argues for strengthening foun-
dation-level school education through an increase in public investment and public
provision that would ensure better capabilities in an equitable way.
Keywords Future of work · Industry 4 · Automation anxiety · Capabilities ·

Learning crisis · Learning achievement
Revised version of Professor Radhakamal Mukherjee Memorial Lecture at the Annual Conference of
the Indian Society of Labour Economics, Department of Economics, Punjabi University, Patiala, 7–9
December 2019. The author is grateful to the President and the members of the ISLE, and to those
who made helpful observations.
* Narasimha D. Reddy
duvvurunarasimha@gmail.com
1
University of Hyderabad, Hyderabad, India
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200 The Indian Journal of Labour Economics (2020) 63:199–224
1 Fourth Industrial Revolution
For the last two decades, there has been widespread discussion on the nature of
technological changes and their impact on the future of work. The debate has
intensified in recent years when a set of technological breakthroughs, with a
potential to “fundamentally alter the way we live, work and relate to one another”,
have come to be christened as the “Fourth Industrial Revolution” (Industry 4)
and assumed the place of a major agenda item of the World Economic Forum
(2016). “The First Industrial Revolution used water and steam power to mecha-
nize production. The Second used electric power to create mass production. The
Third used electronics and information technology to automate production. Now
a Fourth Industrial Revolution is building on the Third, the digital revolution that
has been occurring since the middle of the last century. It is characterized by
a fusion of technologies that is blurring the lines between the physical, digital,
and biological spheres” (Schwab 2016). The core technologies that are expected
to bring about revolutionary changes in the nature of work in future are auto-
mation, robotics and artificial intelligence (AI) including the Internet of Things.
While automation and robotics are associated with routine and repetitive physical
jobs, AI is a really revolutionary impact on the transformation of the future of
work (Jezard 2018). Ernest et al. (2018) make a detailed analysis of what the AI
can do and its implications for the future of work. The tasks that AI can perform
are the ones that are considered to require specific human capacities related to
visual perception, speech, sentiment recognition and decision-making. “In other
words, AI is replacing mental tasks rather than physical ones, which were the
target of previous waves of mechanization” (Ernest et al. 2018). These advance-
ments in AI have been made possible by the confluence of three different but
related developments, viz. (i) a phenomenal drop in computing costs which led
to an explosion in installed computing power and storage capacity; (ii) the devel-
opment and widespread adoption of the Internet and other forms of digital com-
munication; and (iii) the drop in capital costs for digital technologies which has
significantly lowered barriers of entry for start-ups, making it less necessary than
in the past to mobilize huge amounts of capital before starting a venture (Ernest
et al. 2018).
The fusion of these technologies driving the Fourth Industrial Revolu-
tion (“Industry 4.0”) has been the growing concern as to what it holds for jobs,
organization and future of work. It is true, historically, when new technologies
emerge, there would be concerns about a large number of jobs being wiped out.
In the early nineteenth century, a group of English textile artisans, known as Lud-
dites, protested the automation of textile production by destroying some of the
machines. A century later, concern rose again over the “Automation Jobless”
in 1960s (Autor 2016). Even by 1930, Keynes saw the unfolding technological
changes and their impact on employment: “We are being afflicted with a new dis-
ease of which some readers may not have heard the name, but of which they will
hear a great deal in the years to come—namely, technological unemployment”
(Keynes 1930). However, Keynes, a great optimist, never took technological
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The Indian Journal of Labour Economics (2020) 63:199–224 201
unemployment as a negative consequence. On the contrary, he was dreaming of

its impact as a path towards reduced hours of work and 3-h working day and 15-h
working-week that would help workers enjoy more leisure and lead a satisfying
life. But the response to the present technological changes has been the cause
more of the variety that is widely described as a kind of “automation anxiety”,
perhaps with much justification, given the already pervasive threat of unemploy-
ment in developed countries, and the high proportion of precarious insecure
employment in developing countries.
2 The Industry 4 and Future of Work: Automation Anxiety Versus

Guarded Optimism
The results of several studies on the impact of the “Industry 4” technologies on

employment range from pervasive permission bordering on “apocalyptic” anxi-
ety to cautious optimism. Let us first turn to the pessimistic predictions. Table 1,
drawn from the report of the Global Commission on the Future of Work (ILO 2019),
provides estimates on the magnitude of future labour market transformation. The
studies included in Table 1 investigate how feasible it is to automate existing jobs,
given current and presumed technological advances. Based on the tasks that work-
ers perform, Frey and Osborne (2013) classify 702 occupations by how suscepti-
ble they are for automation, and conclude that by 2030, 47 per cent of US workers
are at risk of automation. Interestingly, even in the five major ASEAN countries 56
per cent of jobs are at risk of automation by 2030. Differentiating between jobs or
occupations on the one hand and the activities involved in them, Manyik 2017 Chui
et al. 2015 predict that about 60 per cent of all occupations have at least 30 per cent
constituent activities that can be automated, and also find that globally 375 million
or 14 per cent of all workers need to switch occupational categories. The OECD
(2017a) prediction for that group of countries shows that an average of 9 per cent of
jobs are at high risk of automation, and that in 50–70 of jobs, some of the activities
can be entirely automated. The extreme view emerges from the World Bank (2016)
with a prediction of two-thirds of all jobs in the developing countries that are being
susceptible to automation. On the modest side is the WEF (2018), suggesting that
about 50 per cent of companies expect that automation will lead to some reduction
in their full-time workforce by 2022. There are also other organizations that have
come out with predictions that are certain to add to the anxieties. For instance, the
International Commission on Financing Global Education Opportunity (ICFGEO
2016) predicts, “up to half of today’s jobs—around two billion—are at high risk of
disappearing due to automation by 2030, radically altering the demand for skills”.
These are indeed disquieting prospects, but the only solace is that these predicted
potentials, to be realized, depend on several factors (World Bank 2019a).
As against the projections of potential adverse impact of Industry 4 technolo-
gies on labour, there are studies in the spirit of Schumpeterian “creative destruction”
which argue that as the employment in obsolete technologies is displaced by new
technologies, there would be new employment opportunities in emerging technolo-
gies. There are a number of studies which point out that the actual reduction will not
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Table 1 Estimations of future labour market transformations. Source: ILO (2019) Work for a Bright Future, Global Commission on Future of Work
Source Estimates
Technology Frey and Osborne (2013) 47 per cent of workers in the USA are at risk of having jobs replaced by automation
Chang and Phu (2016) ASEAN-5: 56 per cent of jobs are at risk of automation over the next 20 years
McKinsey Global Institute (2017) While less than 5 per cent of all occupations can be automated entirely using demonstrated technolo-
gies, about 60 per cent of all occupations have at least 30 per cent of constituent activities that can
be automated
OECD (2017a) An average 9 per cent of jobs in the OECD are at high risk of automation. A substantial share of
jobs (between 50 and 70 per cent) will not be substituted entirely but a large share of tasks will be
automated, transforming how these jobs are carried out
World Bank (2016) Two-thirds of jobs in the developing world are susceptible to automation
WEF (2018) Nearly 50 per cent of companies expect that automation will lead to some reduction in their full-time
workforce by 2022
The Indian Journal of Labour Economics (2020) 63:199–224
be high for two reasons (eg. Frey et al. 2016). First, there are countervailing forces to
the job destruction capacities of new technologies. Even if the presumed technological
advances materialize, there is no guarantee that firms would choose to automate, which
would depend on the costs of substituting machines for labour. According to Manyik
(2017), the gap between available technology and its adoption may take decades. Sec-
ond, automation can complement human labour. Focusing only on what is lost misses
this complementarity. The labour market effect of new technologies depends not only
on where they hit but also on the adjustment in other parts of the economy (Acemoglu
and Restrepo 2018, 2018). Bughin et al. (2018) make a sector-wise impact analysis of
automation and AI on changing the nature of work. Focusing on the USA and Europe,
in twenty-five core workforce skills in five major sectors, they analyse the shifts in the
demand for workforce skills. The results show that skills’ demand in physical and man-
ual, and basic cognitive (data input, processing, etc.) activities is estimated to decline
by 14 per cent and 15 per cent, respectively, by 2030; and skills’ demand in higher
cognitive, social and emotional and technological sectors would increase by 8, 25 and
55 per cent, respectively. Complementarity matters. The reduced costs and prices raise
real income, cause demand for other goods and services and stimulate the creation of
new occupations and industries. It is estimated that one additional technical job has
a potential to create five new jobs in the non-tradable sector (Frey and Rahbari 2017
referred to in Islam 2019). Studies by the ILO (2018a, b) show that in aggregate, “tech-
nological change does not seem to have led to a significant increase in joblessness”.
Acemoglu and Restrepo (2018) show that in the long run, automation is correlated with
rising employment but it takes time for economies to adjust to higher standard of living
for workers. For instance, in UK it took 80 years after Industrial Revolution, for the real
wages of workers to rise. Autor (2016) is also critical of automation leading to large-
scale job losses, which he points out is due to the neglect of complementarity. However,
the optimism on the positive impact of “Industry 4” has certain downsides. At least two
of the invidious accompaniments of the growth in employment have been identified for
attention. First, “although automation does not generally reduce the quantity of jobs,
it may greatly affect the quality of available jobs” (Autor 2016). The concern is with
the nature of the quality of complementary jobs generated like that of employment in
what is variously referred to as “platform economy”, “gig economy” or “digital plat-
forms” with low earnings, and the absence of any employment or social security. This
aggravates the process of informal employment (see, for instance, ILO 2018c). Second,
related to the first is polarization of labour markets. The biggest change as new technol-
ogies emerge is not as much the reduction in the number of jobs created, but the types
of jobs available and what those jobs pay. This will give rise to a job market increas-
ingly segregated into “low-skill/low pay” and “high-skill/high-pay” segments, resulting
in increasing inequality which is of greatest social concern (Autor 2016; Schwab 2016).
3 Industry 4 and Future of Work in India
To understand the capabilities needed to face up to the “Industry 4” and its impli-
cations for labour market in India, it would be helpful to examine the situation as
it is evolving. There is limited but growing literature on the impact of “Industry
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4” on employment in India. We could begin with Islam’s (2019) discussion of the

available literature on the impact of automation and the future of employment
in India. As in the case of larger worldwide assessments made on the emerg-
ing technologies and their impact on the future of work, in the case of India too,
there are two sets of views, one which may be called as highly pessimistic and the
other optimistic. But there are certain studies, which in the light of the present
state dominant share of informal employment and the absence of clear data on
the informal sector, confine the estimates to a certain limited number of sectors.
But it is the World Bank (2016), releasing its report on “Digital Dividends” that
pronounced that 69 per cent of jobs in India are threatened by automation. This
is a part of the story about developing countries where most of the jobs are being
low skill and routine in nature and therefore more susceptible to automation (IMF
2017). Also because of the new technologies which facilitate automation of mid-
dle jobs, and help in “reshoring” industries back to developed countries, the rela-
tively low-wage labour in developing countries is no longer attractive.
McKinsey (2016) made sector-wise assessment of automation potential in
India and arrived at estimates of jobs vulnerable. Its estimates show manufactur-
ing sector as the most vulnerable with a potential of 69 per cent of jobs liable
for automation, followed by accommodation and food services with 66 per cent
of vulnerable jobs, transport and warehousing 61 per cent, retail 56 per cent,
agriculture and allied 49 per cent and construction 42 per cent. According to the
report, overall 328.9 million jobs are vulnerable for automation in India. Woet-
zel et al. (2017) estimate that 52 per cent of workers in India are vulnerable for
automation, but go on to add that consideration of the cost of automation, cost
of labour in relation to the benefits of automation, regulatory and social aspects
would require at least two decades for feasible automation to reach the potential.
However, in sectors like IT, financial services, knowledge and capital-intensive
manufacturing, automotive, oil and gas industries, automation has already been in
the process. Quest Alliance (2018) approaches the problem with a larger frame-
work and begins with the proposition that Industry 4 technologies will transform
the future of work in India, but the nature and speed of this transformation would
depend upon the intersection with unique socio-economic structures character-
izing the Indian economy. In the manufacturing sector, there has been a slow
adoption of automation because the cost of advanced manufacturing technology
is higher relative to the cost of labour. However, many manufacturing jobs, espe-
cially in automobiles and electronics, are on a casual and contract basis and there-
fore easier to replace. Also, there is a wide variation in basic metals, chemicals
and equipment with low labour intensity and amenable for further capital inten-
sity. There are others like textiles, paper, wood and leather which are ill-suited for
robotics and also low-wage sectors. The developments in the Industry 4 technol-
ogy have sparked the debate on “premature deindustrialization” or “reshoring” or
“reindustrialization”, meaning that the ease of replacement of relatively low-wage
tasks through automation incentivizes the shift of industries to developed coun-
tries, thus reindustrializing them, which could at the same time result in prema-
ture deindustrialization of countries like India. As of now, much of manufactur-
ing sector continues to absorb substantial low-wage labour.
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India tops in ICT and other business services, and as per Quest Alliance (2018),
there is a threat to this position because of the unfolding technologies. It is predicted
that off-shoring service jobs would reach saturation by 2022, since wages in devel-
oping countries for these jobs are catching up with the West, and already MNEs
like GE and GM have pulled back some of their activities. The IT sector jobs in
India will shrink by 14 per cent with a loss of 6.4 lakh low-skill jobs and with a gain
of only 1.6 lakh high-skill jobs by 2021. The rosy picture comes from hospitality,
retail, education and healthcare together creating 3 to 3.5 million jobs a year with
the growing use of data, and the travel and tourism sector becomes high growth
by 2025. Construction will continue as a job creator, while the financial sector will
continue to be a high-growth but low-job area with the increasing adoption of tech-
nology. Further, the report finds that informal sector would not be in a position to
adapt to the new technology, but positively views the digital technology with the
potential to create more employment through “digital platforms”. The report is very
optimistic about the growth of digital platforms in India creating new opportuni-
ties to organize the unorganized sector, but the emerging evidence on these platform
economies shows that the work and workers in these activities are exposed to more
precarity than security (Berg et al. 2018). The ILO (2018a, b, c) report finds there is
high automation potential in manufacturing in high capital-intensive areas like auto-
mobile industry and financial, legal and IT services in India in the next five to ten
years.
On the optimistic side, there are studies which show that given the overall indus-
trial structure and the supply situation of labour, there is no room for any “automa-
tion anxiety” in India. World over robotics is seen as a high threat to employment.
But in the Indian situation with a share of only 0.8 per cent of the global robots in
2018, there is hardly any labour displacement effect (IFR 2018). Sunil Mani (2017)
shows that with the robotization being extremely low, confined largely three indus-
tries and used in a very few tasks, there is hardly any chance, as it is, for displacing
labour. In India the density of robots (per 10,000 manufacturing workers) is very
low at 10 in the manufacturing and 54 in the automotive industry, compared to 531
and 1218, respectively, in South Korea in 2015. About two-thirds of robots are con-
fined to manufacturing, and most of these are in just four industries, viz. automotive,
electrical and electronic, metal and chemical-based industries. Most automated in
India is the automotive industry, which hardly accounts for 10 per cent of manufac-
turing employment, and within that only a few tasks are automated. Thus, robotics
hardly has any effect of wiping out jobs in India. Verick (2017), after an assess-
ment of the studies projecting a high potential of job displacement by new tech-
nology, points out that only just 3.8 per cent of small firms (employing 5–19) and
20.5 per cent of larger firms, with more than hundred workers, had a licence for
foreign technology. According to him, the major concern of policy in India is to
improve the quality of employment by better use of technology, rather than worry
about displacement labour by technology. He also emphasizes the complementarity
of technology which historically hurt some workers, benefitted others; and in the
Indian context, his advice is to “resist doomsday prophecies of impending annihila-
tion of jobs through automation”. One of the major forms of work shaping out of the
Industry 4 technologies is the digitally delivered freelance work in which India is in
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the lead. India is the largest overall supplier of online labour globally accounting for
24 per cent of the workers (Lehdonvirta 2017). There are two extreme sides to this
digitally delivered work, with a top occupational category like software develop-
ment and technology, and the low-end with “platform economy” or “gig economy”
with a high degree of informality and insecurity to the workers. The very definition
of the constituent participants is vague. The digital platforms represent a complete
change in the pattern of work and as mentioned earlier, with the absence of any
employer and employee relations, nor with any minimum wages, health and other
social security benefits (Coyle 2017). Some have come to describe these digital free-
lance works as self-employment, and with an element of romanticism call it as a part
of the “sharing economy” ideally desirable to economies like India which are domi-
nated by high levels of informal and self-employment (Sundararajan 2017).
These studies on the impact of the Fourth Industrial Revolution on the future of
work across the world and in India are pulled into dichotomous “automation anxi-
ety” and guarded optimism. Either way, what is emphatically certain is a change
in the nature of work in the future. But what is uncertain is the exact shape of the
future of work, emphasizing the dynamic nature of the shape of work and how it is
organized. In that sense, OECD (OECD 2017a, b) report is apt when it concludes,
“what is certain is the future is uncertain. It is, therefore, difficult (if not counter-
productive) to try and plan in detail for potential changes that might affect the
world of work in the years to come”. But what is necessary is to build resilient and
adaptable labour force and labour markets to manage the transition. The rest of this
paper is concerned with examining the basic requirement towards building resilient
and adaptable labour force with the required capabilities in India. Such a build-up
requires a new surge of agile learners with capabilities to adapt to the rapid changes
in the nature of work (WEF 2018). When it comes to future-proofing of societies, it
is clear that education is the key (Stewart 2018). The basic question is whether India
is building such capabilities to face and adapt to the Industry 4, driven by building
appropriate education systems through improved investment, especially in school
education?
4 Industry 4 and School Education Preparedness in India
The demand for universal free and compulsory education has a long history and
much has been written about it (for a brief account, see Mundle 2017). Since our
present task is to have a quick assessment of the state of pre-school and school
education in India in turns of its ability to provide foundational capabilities to the
younger generation who have to enter a world of work which is fast changing in the
unfolding process of Fourth Industrial Revolution. After a quick a run through up to
the end of the first decade of the twenty-first century by which school education has
become a fundamental Constitutional right, we shall examine the achievement step
by step, right from the early childhood education, through the Class 8, Class 10 and
a little bit beyond by focusing the quality as an indicator of capability.
The Constitution of India under the Directive Principles of State Policy provided,
though not as a fundamental right, for universalization of education up to the age
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of 14 years within a period of ten years of the commencement of the Constitution.

After more than a decade of the constitutional deadline, what was achieved was not
much in the direction of universal elementary education but a national commission
for education in 1966, which has become famous as Kothari Commission because
of its progressive recommendations including free and compulsory education for all
until the age of 14, special attention to education of girls and children of deprived
communities and increase in the allocation of resources to education to the tune of
6% of the GDP. Though the report was accepted by the Parliament and included
in the National Policy on Education 1968, there was hardly any effort to provide
adequate funding to match the lofty mandate of the policy. On the contrary, the allo-
cation to education was much less in the Fifth and Sixth Plans compared to previ-
ous Plans (Tilak 2019). There was also a resolution as a part of the International
Convention on Economic, Social and Cultural Rights (1966) making it obligatory
to governments to submit within two years a detailed Plan of Action for the pro-
gressive implementation of the principle of free and compulsory education within a
reasonable number of years (Mehandale 2019). It is not surprising such resolutions
are left to benign neglect by countries like India. After almost two decades, a new
National Policy on Education was announced in 1986. There was some awakening
when in 1992, the Supreme Court, in the case of Mohini Jain Vs State of Karnataka,
pronounced education as a Fundamental Right, without indicating any age cohort,
which left room for restricted adoption for policy.
After a prolonged debate and dithering on the judgment of the Court for over
a decade, finally the Constitution was amended in 2002 to include education as a
fundamental right under Article 21C. But it was not followed by any legislative
guarantee but came out only in the form of introduction of the programme of Sarva
Shiksha Abhiyan (SSA) in a mission mode with time-bound action. But it turned
out to be neither. SSA ended up erecting parallel structures and sidelined the whole
government machinery. It turned more into the promotion of non-formal scheme
with para-teachers and diluted the “noble mission of universal elementary educa-
tion”, killing the very spirit behind it. It took seven years after amending the Con-
stitution, to pass the Right of Children to Free and Compulsory Education (RTE)
Act in 2009 that raised expectations of equitable quality education. But it came with
several limitations. First, it provided for free and compulsory education for the age
group of 6–14 and ignored the recommendations of the Central Advisory Board on
Education to include early child group of 3–6 years and to extend it up to at least
16 years but desirably 18 years. The present provision of compulsory education
as a constitutional right to only 6–14 year age group, meaning up to 8th class, is
totally ineffective in either providing any basic capabilities for fuller life and work,
or providing entry into any employment that is unfolding at present. A minimum of
twelve years of education, i.e., right to education up to 18 years of age, would be an
essential requirement. In the Indian context, immediate extension of right to educa-
tion up to at least 16 years or up to the completion of secondary education, which
has been a longstanding demand of all experts, needs to be met. The recent evi-
dence arising out of the changes in the structure of employment shows that between
2011–12 and 2017–18, there was a net decline of employment of 38.84 million in
the case of those with less than secondary level education, while there was a net
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increase in employment in the case of those with educational level secondary and
above (Kannan and Ravindran 2019). Even in the case of newly emerging ‘digital
platforms’, the entry educational requirement is high school education, although 80
percent of them have higher education (Berg et al. 2018). It is clear that entry into
even informal regular work will be inaccessible without completion of secondary
education in future. Second, it did not provide for Common School System (CSS)
as recommended by earlier Education Commissions and as in practice in most of the
countries with universal free and compulsory education. Third, it had no concern for
equitable and quality education. It left a stimulus for private education at all levels.
The Act does not clearly recognize that education is a public good with a very spe-
cial social role as a human right (Tilak 2019).
4.1 State of Early Childhood Education
In spite of worldwide recognition of the role of early childhood education in its

foundational role in cognitive and creative capabilities and the repeated demands
by experts and civil society organizations, education for children in the age group
of 3.6 is not yet part of the Right to Education in India. But periodic lip sympathy
and promises to bring this group under RTE are not lacking. For instance, the recent
National Educational Policy 2019 (MHRD 2019) is quite eloquent about it:
“Over 85% of a child’s cumulative brain development occurs prior to the age
of 6 indicating the critical importance of appropriate care and stimulus of the
brain in a child’s early years for healthy brain development and growth. It is
therefore of the utmost importance that every child has access to quality early
childhood care and education (ECCE) … Investment in ECCE has the poten-
tial to give all young children such access, enabling all children to participate
and flourish in the educational system throughout their lives”. Indeed, a state-
ment that aptly fits as to where to begin if there were to be lifelong education
that enables to move up with the changing technologies of the future. It also
emphasizes ECCE is perhaps the greatest and most powerful equalizer, and
goes on to add that, “presently, quality ECCE is not available to most young
children, particularly children from economically disadvantaged families”. The
overarching goal will be to ensure universal access to high quality early child-
hood care and education across the country”. And suggests certain measures
which are yet to be seen in operation. There are not many studies on ECCE in
India except ASER 2019 with a focus on age group 4–8 and another sponsored
by UNICEF (2017). ASER 2019 finds that though there is some information
on what children in the age group 4–8 are doing, not much of evidence is avail-
able on scale with respect to what they are learning. What goes on in the name
of ECCE in India is through the “Anganwadi” under Integrated Child Develop-
ment Scheme (ICDS) which focus on nutrition. There are managed low-paid
informal operations without any training. “There is limited awareness among
all stakeholders regarding what constitutes good quality early education. Most
understand pre-school education as a downward extension of the formal meth-
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ods of primary grade learning of the 3 Rs. which can be counter-productive

and detrimental for children (UNICEF 2017).
4.2 Learning Crisis in School Education
For assessing the learning performance of children at the school level, there have
been internationally comparable surveys like PISA (Programme of International
Student Assessment) PIRLS (Progress in International Reading Literacy Sur-
vey) and TIMSS (Trends in International Mathematics and Science Study). India
declined to participate in any of these surveys for a long time apparently suggesting
that these assessments are based on indicators which are inappropriate for the Indian
conditions. But the real reason appears to be an effort to avoid exposure to the defi-
ciencies in the performance of the children in school education in India. Recently,
it relented because internal surveys did bring out the poor performance, and hence
decided to participate in PISA, but the results are yet to come. For education “to do
better, a nation must assess learning to make it a serious goal; act on evidence, to
make schools work for learners, and align actors, to make the system work for learn-
ing” (Filmer and Rogers (2018)).
The saving grace is that for assessing the performance of school education in
India there emerged two fairly credible national surveys, viz. the National Achieve-
ment Survey (NAS) conducted by the National Council for Educational Research
and Training (NCERT) periodically since 2001 for Classes 3, 5, 8 and 10; and the
other is an independent initiative of nationwide assessment surveys that are brought
out as Annual Status of Education Reports (ASER) during 2004–2014 and biannu-
ally since 2016. The NAS covers both rural and urban areas but is confined to gov-
ernment schools including aided ones. The ASER covers both government and pri-
vate schools, but confined to rural areas. For the present analysis, the latest reports
of both ASER and NAS are the main sources.
There are a fairly large amount of data on the achievement of school students
from these two (ASER and NAS) sources for Classes 3, 5, 8 and 10, and some spe-
cial surveys for early age and one beyond 8 by ASER. But we shall begin with the
performance of Class 8 which corresponds to the terminal year in the 6–14 age
group covered under RTE, and Class 10, if the terminal year is extended to 16 years
as demanded. The intension is to find out the nature of the capabilities with which
the students exit at the terminal levels up to which the right to education is guaran-
teed. Table 2 provides subject-wise performance of Class 8 students by place (rural/
Table 2 Performance by Subject Rural Urban Girls Boys

location and gender: Class
8 (2017–2018): (all India Mathematics 43 39 42 42
average). Source: NAS-2017,
NCERT-MHRD (2018) Science 45 41 44 44
Social science 45 42 44 45
Language (MIL) 57 57 56 57
Scores are the percentage of correct answers
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Table 3 Social group-wise Subject SC ST OBC General

performance: Class 8 (2017–
2018): (all India average). Mathematics 40 40 44 42
Source: NAS-2017, NCERT-
MHRD (2018) Science 43 43 46 44
Social science 42 43 45 44
Scores are percentage of correct answers
Table 4 Reading achievement Level 2008 2010 2012 2014 2016 2018
in Indian Schools: 2008–2018.
Source: Annual Status of Standard V
Education Report (Rural) 2018
(Provisional), January 15, 2019 i. Government schools 53.1 50.7 41.7 42.2 41.7 44.2
ii. Private schools 67.9 64.2 61.2 62.6 63.0 65.1
Standard VIII
i. Government schools 83.6 82.0 73.4 71.5 70.0 69.0
Percentage of children who can read a Standard II text at Standards

V and VIII
1. Reading text assesses whether a child can read a “story” of Stand-
ard II language text
2. There are no data for private schools for Standard VIII
urban) and gender. Except in language, maybe mother tongue, the overall scores are
very low regardless of rural–urban, male–female differences. But given the poor per-
formance of all, rural students surprise by scoring better than the urban. And also,
there are no gender differences. A careful reflection does not seem to leave much
to celebrate, since NAS represents only government schools; almost all with some
means in urban areas have already moved into private school, leaving the poorer
marginalized in the government schools, while privatization in rural areas may not
be as high, leaving some of the better-off in government schools and hence the rural
average marginally bettering the urban.
Table 3 shows the achievement of Class 8 students of different social groups in
four basic subjects. Apparently, there are certain expected results and also certain
non-familiar results. Even though the overall scores are low in subjects other than
the language, the SC and ST scores being less than that of OBC and “general” cat-
egory are on a familiar pattern, but the ST scores being equal to SC and the OBC
scores being more than the “general” are non-familiar. Yet one may have to be care-
ful in reading any social change into this; for the reason, as mentioned earlier, these
results are confined to government schools. What is more important is that RTE
leaves these students at Class 8 with such a poor performance and absolutely no
hope of capacities to compete for a place in future forms of work.
Let us now turn to see what holds for the performance at Classes 5 and 8 in the
government and private schools in rural India. Here, Class 5 is included for com-
parison with Class 8 performance. The ASER 2018 also brings together the ear-
lier survey results of every 2 years from 2008 to 2018 which enables us to gauge
13 ISLE
the learning trends over a period. The focus of the ASER surveys has been on
two dimensions, viz. reading and arithmetic. Table 4 refers to “reading achieve-
ment” of Class 5 and 8 students in terms of their ability to read Standard II text. It
shows that almost half the Class 5 students in government schools are not able to
read a Class 2 text and about two-thirds of students in private schools are able to
do it. Even after reaching Class 8, about one-fifth of students are not able to read
Class 2 text in government schools. As they move to Class 8, the performance
improves. What is puzzling is that the reading achievement of Class 5 in govern-
ment as well as private schools shows a decline between 2008 and 2018. In the
case of Class 5, the dip is between 2008 and 2012, but in the case of Class 8 in
the government schools, it is trend declining from 83.6 per cent in 2008 and 69
per cent in 2018.
The crisis in reading is nothing short of what the World Bank calls as the “learn-
ing poverty”. At age 10, when children are expected to be in fourth grade, is when
many children finish mastering “the mechanics” of basic reading in high-performing
systems. By then, “they can decode most words and start to grow as independent
readers …”. But “without … systematic and intensive approach to early interven-
tion, the majority of at—risk readers rarely catch up. Failure to read by nine years
of age portends a lifetime of illiteracy for at least 70 percent of struggling readers”
(World Bank 2019a). A similar situation is experienced in India as we turn to look
at ASER 2018 data for 14–16-year-old group. India is in deep “learning poverty”. It
is observed that while income poverty globally is reduced to 11 per cent and is on
the way out to be almost eliminated by 2030, “learning poverty” is emerging a chal-
lenge with very high rates—53 per cent average for low- and middle-income coun-
tries (World Bank 2019b). But there is a strong optimistic appeal that it is “possible”
to overcome the learning crisis with proper interventions and the examples of Viet-
nam and South Korea, both were torn countries at different points of time, are often
cited for exhortation. “Learning outcomes of Vietnamese students in the bottom 40
percent income ladder as high, or higher, than the average student in higher-income
countries”. Is India capable of taking the challenge? Not, if the present devastation
in privatizing the school education continues, and public funding does not improve.
Table 5 Arithmetic achievement Level 2008 2010 2012 2014 2016 2018
in Indian schools: 2008–2018.
Source: Annual Status of Standard V
Education Report (Rural) 2018
(Provisional), Pratham, January i. Government schools 34.4 33.9 20.3 20.7 21.1 22.7
2019 ii. Private schools 47.1 44.2 37.8 39.3 38.0 39.8
Standard VIII
i. Government schools 65.2 67.0 44.5 40.0 40.2 40.0
ii. Private schools 71.8 72.0 57.1 54.2 51.2 54.2
Percentage of children who can do basic subtraction and division* at

Standards V and VIII
1. The ASER arithmetic test assesses whether a child can recognize
numbers 1–9, recognize numbers 10–19, do a 2-digit subtraction or
solve division of 3-digit by 1-digit
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Table 5 shows that the arithmetic achievement of Class 5 students is not only
very poor (below 50 per cent) for both government and private schools all through
the period between 2008 and 2018, but also declining over the years. The arithme-
tic performance of Class 8 shows substantial improvement in both government and
private schools during 2008 and 2010, but declines since 2014. The trend of declin-
ing performance between 2014 and 2018 both in reading and arithmetic achieve-
ments across government and private schools is difficult to explain. One plausible
explanation is that as a consequence of the operationalization of the RTE Act from
2010 there was a surge in enrolments in schools. The government schools suffered
resource deficiencies with inadequate public funding, while private schools prolif-
erated with limited resources and growing enrolments that pushed them towards a
trend from high-fee-high-quality elite exclusivity to low-fee-low-quality mass com-
mercialization. There was a marginal recovery from the 2008–2014 fall, but even in
2018 the scores were much lower than in 2008, forcing one of the experts involved
in the survey to observe: “we are far from becoming an educated country” (ASER
2018, p. 12).
The ASER (2018) also extended a part of the survey to children of 14–16 with
the objective of finding out as to what are the academic capabilities acquired by
those who completed Class 8. The responses sought are related to a few tasks car-
ried out in everyday context. The achievement under the tasks included (with the
percentage of correct responses in parentheses) are: calculating time difference (less
50%), application of unitary method of arithmetic (52%), financial decision like pur-
chase of books (37%) and calculation of discount rate (30%). The weak foundational
learning seems to lead to deteriorating arithmetic abilities with an increase in age.
The ASER (2017) also undertook a survey with a focus on 14-18 age group to find
out “beyond basics” of foundational readership and arithmetic. It was aimed at four
domains: Activity, Ability, Awareness and Aspirations with a large sample of 30,800.
Findings on the “activity” showed that about 86% were still in either school, plus
two or a small section in college. Since the sample is of rural students, 42% of all,
in school or not, are working, mostly (80%) in agriculture. But it is “ability”, after
eight years of schooling that one was expected to acquire in the form of certain foun-
dation capabilities, that exposed the shallowness of the school education: 76% could
not count money correctly; 44% could not convert weight in grams to kilos; 60%
could not calculate the time between two periods; 25% still cannot read basic text
fluently in their own language; more than 50% struggle with division; and only 43%
complete division of 3 digits by one digit! On “awareness” and “aspirations”, there
was some gadget obsession with a mobile phone but still a majority of them are yet
to use a computer. The survey concludes that “unless we ensure that our young peo-
ple reach adulthood with foundational knowledge, ‘demographic dividend’ will not
materialize” (ASER 2018, p. 62). The think tank of the Government of India, the
NITI Aayog admits to the poor state of learning in the Indian school system (NITI
Aayog 2018a, b).
The findings of ‘ASER (2018): Beyond Basics’ for the age group 14–16, could be
understood clearly if we combine the results of NAS (2017–2018) on the academic
achievements of Class 10 students in government schools. Table 6 shows the sub-
ject-wise distribution of students across a range of correct answers. What is baffling
13 ISLE
Table 6 Range of percentage Subject 0–35 35–50 51–75 76–100

correct answers and subject-
wise distribution of students in Mathematics 67 20 11 2
Class 10 (All India Average)
2017–18. Source: NAS-2017, Science 62 27 10 1
NCERT-MHRD (2018) Social Science 44 38 17 1
English 61 21 15 3
1. Combined rural–urban government schools

2. MIL: Modern Indian language, mostly mother tongue
is that almost two-thirds of students end up with 35 per cent or less correct answers
in Mathematics, Science and English. Except in language, more than 80 per cent
score 50 per cent or less in the other four subjects! Considering that national aver-
ages for a country like India might hide regional differences in the performance of
government schools, ten states representing all regions of the country are brought
on to Table 7, which is focused on the Class 10 students in five subjects. Table 7
shows, under each subject, the percentage of students under “A” and “B”. A repre-
sents the percentage of students with correct answers, and “B”, percentage of “stu-
dents at risk”, meaning those with less than 35 per cent correct answers. Except in
the language (MIL), in all the other four subjects (except in English in Assam), in
all the ten states the percentage with correct answers is forty or less! The “at risk”
(< 35%) category in Mathematics ranges from 51 to 76 per cent, in Science from
52 to 74 per cent, and in Social Science from 49 to 80 per cent. In the “language”
Table 7 National achievement State Math- Science Social English MIL

survey (NAS): Class 10; 2017– ematics science
2018 performance of students
(average percentage correct). National average 34 67 34 62 39 44 36 61 49 27
Source: National Council of
Educational Research and Assam 39 53 37 53 40 39 41 49 52 19
Training, (2019) Educational Bihar 36 60 31 72 37 54 29 80 41 46
Survey Division, New Delhi
Gujarat 32 75 33 68 38 46 32 72 48 25
Haryana 31 73 32 71 38 46 32 71 50 26
Madhya Pradesh 30 78 31 74 36 52 30 80 49 27
Maharashtra 33 67 34 60 40 39 37 57 49 22
Rajasthan 38 54 38 52 44 32 37 55 57 17
Punjab 33 70 35 60 38 48 37 60 49 23
Tamil Nadu 31 76 34 63 39 41 36 63 47 24
Telangana 34 68 37 52 39 44 38 56 47 27
CBSE 52 28 51 23 53 16 58 14 62 10
ICSE 51 27 53 17 51 15 70 7 54 22
A: Per cent of correct answers

B: Per cent of “students at risk”, with a scope of 35% or less of cor-
rect answers
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right answers average about 50 per cent. The CBSE and ICSE are elite government
schools with all the basic facilities to do better way ahead in contrast to the facility-
deprived other government schools. Overall, from the results at the critical thresh-
old of school education, viz. tenth class, the performance of the students is distress-
ingly low across the country (NCERT 2019). What it portends is that even if RTE
threshold is extended from 14 to 16 years, without strengthening the facilities at the
school level there would be no escape from the quality deprivation. This is a clear
signal that is not merely the country’s foundational education that is at risk but the
future of the workforce. Expanding access to schools without expanding infrastruc-
ture would result in this kind of dysfunctional education—without learning. “School
without learning is not just a wasted opportunity, also a great injustice: the children
the society is failing most are the ones in great need of a good education to succeed
in life … the learning that one would expect to happen in schools … is often not
occurring especially for the marginalized” (Filmer and Rogers 2018).
The impact of the rapidly changing Industry 4 technologies is worldwide, and
the preparedness for the challenge by strengthening proficiency of learning through
school education is often seen in terms of a comparative perspective. Since there
has been a kind of habit to measure the state of living in terms of poverty, the ter-
minology has penetrated into learning also in terms of poverty. Table 8 presents the
position of India in comparison with some select comparable countries in terms of
school-level learning proficiency and learning poverty. The table is self-explanatory
of the deep distress of school education in India.
4.3 Skill Development without Foundation
As is evident from the above discussion, there is a serious learning crisis in Indian
school education. Instead of addressing the problem head-on, the government is
resorting to a deviant policy of meeting the demands of the changing technology
by “skill development”. There is a growing realization that the nature of Industry 4
technologies that are likely to emerge is not simply fixed-task changes but requires
cognitive and creative capabilities which can only be built on the basis of providing
capabilities from the early childhood and school education. There is a need to realize
that “while education is not the same as skill, education is what enables workers to
acquire new skills with ease, whether on the job or through participation in training
Table 8 Learning proficiency in Country Below minimum proficiency in Learning

India compared to select Asian school (%) poverty (%)
countries. Source: World Bank
(2019b) India 53.7 54.8
China 18.2 18.2
Malaysia 11.7 12.9
Sri Lanka 14.0 14.8
Thailand 21.9 23.5
Vietnam 1.1 1.7
13 ISLE
programmes. Thus, the current education profile of workforce actually restricts

movement of workers from traditional to modern jobs” (Ghosh 2016).
And it is in the present context of failure on the front of providing quality school
education that many experts feel skill development would not succeed in augmenting
the supply of the right kind of labour. “No skill development programme, however,
well designed, can succeed without an underlying foundation of basic education. But
India’s long standing neglect of primary and secondary education has greatly lim-
ited the access to quality basic education” (Mundle 2017). It is shown that though
there is a huge deficit in formal skill training, India’s skill certification is only 2 per
cent, compared to 70 per cent in European countries like UK and Germany, and
80–90 per cent in East Asian countries like Japan and South Korea. It is because
of the differences in the basic quality education at the school level. The ambitious
Pradhan Mantri Kaushal Vikas Yojana (PMKVY) to train 400 million in the age
group of 15–45 in the next 7 years has very poor progress because of the missing
foundational education of those who are in the labour force. So far only 17.6 lakhs
are trained under PMKVY, of which only 5.8 lakhs certified as successfully com-
pleted and 58,000 as absorbed (Mundle 2017). Further, the right approach shows
that in South East Asia technical and vocational education and training (TVET) is
aligned to secondary and upper secondary education, and students are enrolled in
these programmes. For instance, the percentage of students enrolled into these pro-
grammes at secondary school level in China is as high as 44.4 per cent, in Indonesia
43.3 per cent, in Malaysia 20.6 per cent and in South Korea 19.4 per cent, while in
India it is 1.8 per cent. In India national vocational qualification framework does not
address foundational problems and the needs of industry (Mehrotra 2016). Instead
of strengthening school education, mere emphasis on skill development could end
up as a kind of “band-aid response” to the ailing school education. Even at the risk
of repetition, it must be said that “rapid technological change makes those founda-
tional skills even more important because it is those skills that enable workers and
citizens to adopt rapidly to new opportunities” (Filmer and Rogers, 2018).
In recent years The Economist has been bringing out “Worldwide Educating for
the Future Index” (WEFFI). According to WEFFI, the future skills that students
need to develop include critical thinking, problem solving, leadership, collabo-
ration, creativity as well as technical and digital skills. The index now covers 50
countries representing 89% of the world’s population and 93% of the global GDP.
In 2018, India stands at the bottom with a rank of 40 among 50 countries. All the
aspects are essentially the one covered as a part of the “school” education, and it
is the Achilles heel of India’s school education. Long-term strategy is to prepare
human resources for “lifetime learning” by providing foundational education that
can produce skills that are complemented by, rather than substituted by technologi-
cal change.
4.4 Privatization of School Education
The crisis in school education intensified with the shift to the neoliberal regime and
explicit policy of private provision of public goods like education. It manifested
ISLE 13
in two processes: one is the unbridled and unregulated expansion of privatization

of education, and the other is the increasing resistance to increase in budgetary
resources for education. Despite the fact that SSA vision documents did not articu-
late the role of the private sector, especially in enabling access to the disadvantaged,
the interventions by private interests including certain civil society organizations
resulted in the spread of private schooling, including low-fee private schooling in
the decade of universalizing elementary education under SSA (Srivatsava and Fen-
nel 2013). Beginning with the Eleventh, and especially from the Twelfth Five Year
Plan, there was increasing space provided to private participation in education,
which decreased the role for the state in education financing, management and regu-
lation (Srivatsava 2016, Tilak 2019). This has happened in spite of the fact that pri-
vate school students did not universally achieve better results in every subject, tak-
ing into account the background variables; that the most disadvantaged, described as
orphans, migrants and financially unstable families, could not afford the “low” fees
charged, and that the work of some of the private schools revealed education corrup-
tion at the highest levels, showing such schools in India gained recognition through
bribery (a critical summary account from Srivatsava 2016). Enrolment in govern-
ment primary schools declined by 2.31 crores in absolute numbers from 2007–2008
to 2015–2016, while enrolment in private primary schools increased by 1.45 crores
over the same period (NITI Aayog).
Privatization took certain strange avatars in states like Uttar Pradesh. In fulfilling
the task of universalizing elementary education, i.e. from Standards I to VIII, there
was a rapid expansion of private unaided (PUA) schools which mostly offered up to
Class 8. The secondary education from Class 9 was largely left to private schools.
A case study, contrasting the situation in a district in UP with that of one in Odisha
where both elementary and secondary schools are in the government sector, shows
that the wide prevalence of fees-charging private schools leads to lower enrolments
at the elementary level and higher dropout after Class 8 in U.P. In contrast, in the
Odisha district, enrolments at the elementary level are near universal and dropouts
after Class 9 negligible, because of the government schools at both the levels. The
equity dimension of the distorted school institutional structure in U.P. is highlighted
in an earlier study by Kindron (1996): “The abundance of PUA elementary schools
and the relative lack of PUA secondary schools in U.P (rural and urban) and urban
India is inequitable. It gives the well-off better chances of acquiring primary educa-
tion and it obliges a number of students to carry a financial hurdle in order to access
junior and secondary education subsidies. Moreover, government subsidies to a large
proportion of secondary schools but only a smaller proportion of elementary schools
represent an inequitable expenditure of scarce educational resources since children
of the poor are better represented in elementary than in secondary education”.
Yet another larger study on the limits of marketization of primary education
in rural India, in the context of the spread of the so-called low-fee private (LFP)
schools shows “that the equity effects of the market in education are negative in that
with the exit of all wealthier families more capable of exercising voice to the pri-
vate sector, the government sector has become a ghettoized option of last resort for
the poorest and most marginalized in society. Those accessing government schools,
the choice of the last resort, are not achieving meaningful access leading to real
13 ISLE
learning. All traditionally privileged groups in society are favoured by the market
in education, leaving behind those of low caste or minority religion, the landless,
girls, and children born later in families and children of large families. … to raise
the prospects of the poorest, the standards at government schools must be raised
through increased accountability of teachers for the work that they do. Marketised
options are neither sustainable in the context of rural villages, nor are they, most
importantly, socially equitable” (Srivatsava and Fennel 2013).
Kingrdon (2017) in her path-breaking analysis of “emptying of public schools”
brings out how the government schools are thrown into a strangely high-resource,
high-cost but low-achievement situation because of the onslaught of privatization. In
an exceptional effort she pools together on schools, enrolments and resources for 20
major states from the District Information Systems on Education (DISE). She shows
that during the period between 2010–2011 and 2014–2015 the total government
schools increased by 16,376 but enrolments in government schools decreased by
11.1 million, while private unaided schools increased by 71,360 and enrolments in
private schools also increased by 16.0 million. The increase in enrolments in private
schools was largely due to “emptying” of the government schools. The result was
that government schools across the country started experiencing shrinking in size.
The proportion of “small schools” (with a strength of 50 or less) and “tiny schools”
(with a strength of 20 or less) started increasing. Table 9 shows the number, aver-
age size and per pupil–teacher cost in the “small” and “tiny” government schools
between 2010–2011 and 2015–2016. The tragedy or the irony is that the government
schools end up spending huge overhead costs per pupil without benefiting many stu-
dents who are on migration mode to private, often ill-equipped schools. It is not
that all those who migrate to private schools are better-off sections. The range is
from the children of the rich elite to the children of casual labour. The supply is
expansive in private schools with per pupil fees ranging from lakhs of rupees per
annum to budget private schools with fees at the extreme in Uttar Pradesh as low as
3.2% of the annual average earnings of wage labourers (Kingrdon 2017). The result
Table 9 Growing share of “small” and “tiny” government schools in India (20 large states). Source:
Kingrdon (2017)
Year Small schools (50 or less students)
Number Average size % Total govern- Pupil– Per pupil–teacher
ment schools teacher ratio salary per month
(Rs.)
2010–2011 313,169 30 30 15 1887

2014–2015 372,163 28 35 12.7 3191
2015–2016 418,825 – 40 – 3430
1. “Tiny Schools” (with 20 or less students): increased from 71,189 in 2010–2011 to 95,637 in 2014–
2015 to 1,08,183 in 2015–2016
The per pupil–teacher salary cost per month in these schools increased from Rs. 4250 to Rs. 6522 in this
period
2. During this period, M.P., Maharashtra, West Bengal and U.P. experienced greatest “emptying” and the
highest increase in “small” schools
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is that most of these schools can hardly afford any infrastructure and better-paid
teachers to impart quality education. On the one hand, the poor in budget schools
end up learning hardly anything, while the government schools face closures. This
state of affairs would further ruin the learners, especially from the disadvantaged
sections. Strengthening government schools through better teacher and infrastruc-
tural resources is the answer to reverse the trend. Augmenting public investment is a
desideratum. But the budgetary resource flow to education seems to be still an aspi-
ration than any realization.
4.5 Public Investment in Education as a Public Good
For years now, there have been recommendations by several commissions, and
repeated demands by the stakeholders in public education and people at large that
education sector needs a public investment of at least 6% of the GDP, and to facil-
itate the same the budgetary allocations at the state level should be at least 20%
of the state budget and 10% of the union budget. These demands are in tune with
the recent pattern of education expenditure suggested by the International Commis-
sion on Financing Global Education Opportunity (ICFGEO 2016), in the context
of reaching educational achievement under SDGs in lower-middle income countries
like India. Table 10 shows that over the years, even after the RTE, there has hardly
been any increase in the total government expenditure on education as a ratio of
GDP. It continues to hover around 3%. Worse still, in recent years there has been a
marginal decline in the union government education expenditure as a share of GDP.
The budgetary share of the union government showed a marginal increase after the
RTE, but there seems to be resistance thereafter (Table 11).
There are some who argue that school education is denied of resources because
of much too higher allocations per student in higher education (Mundle 2017). They
also propound a hypothesis of “distorted allocation” of resources for education. But
Table 12 shows that the resource allocation to higher education has been low and
Table 10 Public expenditure on education as a percentage of GDP. Source: GoI (2018) analysis of budg-
eted expenditure on education, 2014–2015 to 2016–2017, MHRD, Department of Higher Education,
New Delhi
Year States on education as % Centre on education as % States and centre
of GDP of GDP as % of GDP
2009–2010 2.46 0.65 3.11

2010–2011 2.51 0.72 3.22
2011–2012 2.40 0.69 3.09
2012–2013 2.34 0.66 3.01
2013–2014 2.33 0.64 2.97
2014–2015 2.35 0.55 2.90
2015–2016 (RE) 2.44 0.49 2.93
2016–2017 BE) 2.56 0.47 3.03
Expenditure by Education Departments
13 ISLE
Table 11 Trends in total budgetary spending on education by union and state governments. Source:
2004–2005 to 2014–2015 (BE): “Budget for Education Sector in India”, Lok Sabha Secretariat, 2014
Year Education share in union budget Education share in combined
expenditure (%) union and state budget expendi-
ture (%)
2004–2005 2.6 9.7

2005–2006 3.5 10.0
2006–2007 4.1 10.3
2007–2008 3.8 9.8
2008–2009 3.9 10.1
2009–2010 3.8 10.6
2010–2011 4.3 11.4
2011–2012 4.6 11.4
2012–2013 4.7 11.8
2013–2014 (RE) 4.7 11.7
2014–2015 (BE) 4.6 –
Table 12 Combined expenditure on education by union and state governments (as % of GDP). Source:
Lok Sabha Unstarred Question No. 19 on 04-02-2019
Sector 2012–2013 2013–2014 2014–2015 2015–2016 (RE) 2016–2017 (BE)
Elementary education 1.60 1.62 1.81 1.79 1.82

Secondary education 0.90 0.95 0.98 1.01 1.05
Adult education 0.01 0.01 0.01 0.01 0.01
University and higher 0.63 0.67 0.57 0.65 0.64
education
Technical education 0.56 0.58 0.70 0.80 0.87
Total 3.70 3.84 4.07 4.27 4.39
These estimates include expenditure on education by the education department as well as other depart-
ments
stagnant over the years in spite of the fact that gross enrolment rate (GER) in higher
education has more than doubled during the past decade to 26.3 per cent by 2018-
2019. Here again, there have been deliberate efforts to promote private provision at a
massive scale, by posting a thesis that higher education is not a merit good, and that
higher education has an elite bias. Again just at a time most of the disadvantaged
started entering the portals of higher education, public institutions of higher learn-
ing fail to expand.
Quality higher education is as much complementary to school education qual-
ity as quality school education is to higher education. Any effort to reduce public
funding of higher education in the name of reprioritizing school education and any
effort to promote higher education in the private sector by starving resources to
public institutions of higher learning would be suicidal to the process of gearing up
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the capabilities of the younger generation to face up to the challenging changes in

the world of work. In the context of Industry 4 higher education should be treated
as much a public good as the school education, and accordingly public investment
should be augmented in education as a whole.
5 Industry 4 and Preparing for Future Work
A great vision and effort will be needed to anticipate skills for the future of employ-
ment and start preparing for the future generation of workers, but one obvious condi-
tion is the quality of education at the foundational level. The challenge is to prepare
for a situation in which the work as one enters will not be the same as the work one
leaves at the end, and will not have much resemblance to the work she started with
(UN 2013). There is a kind of wakeup call that 85 per cent of jobs that will exist in
2030 haven’t been invented yet, and people need to have the ability to reinvent them-
selves. Things are changing, and even the World Bank, which so far had the lowest
priority for lending to human capital improvement, is also changing. The President
of the World Bank, Jim Yong Kim, prefaced a recent WDR thus: “When we prepare
for the future of work, it is important to understand that many children currently in
primary school will work in jobs as adults that do not even exist today” (WB 2019a).
And he went on to say that there is no gain saying that there are rapid and often
disruptive changes in the nature of work, and observed: Three types of skills are
increasingly important in labour markets: advanced cognitive skills such as complex
problem solving, socio-behavioural skills such as teamwork and skill combinations
that are predictive of adoptability such as reasoning and self-efficiency. Building
these skills requires strong human capital foundations and lifelong learning.
“The foundations of human capital created in early childhood, have thus become
more important. Yet governments in developing countries do not give priority to
early childhood development, and the human capital outcomes of basic schooling
are sub-optimal” (WB 2018a, b). And India, as we have seen, leads this resistance
at the cost of the future of its workforce and future growth!
As a part of the World Bank-sponsored Human Capital Project, a multi-uni-
versity team evolved a method for measuring human capital, and for construc-
tion of Human Capital Index (HCI) based on the data of human capital invest-
ment between 1990–2016 for 195 countries (Lim et al. 2018, World Bank 2018a,
b). The objective is to annually report on human capital to track and motivate
investments in health and education. The HCI measures the amount of human
capital that a child born today can expect to attain by age 18. It conveys the pro-
ductivity of the next generation of workers compared to a benchmark of com-
plete education and full health. HCI is based on five indicators, of which two are
on education and three on health. The education-related indicators include (i) a
child’s expected years of schooling and (ii) harmonized test scores as a measure
of the quality of learning. These indicators are adjusted for quality. For instance,
in India, students score 355 on a scale where 625 represents advanced attainment,
which is taken as 100 per cent. Thus, the learning adjusted score 355 out of 625
would be only 56 per cent. And, similarly, a child entering school at 4 can expect
13 ISLE
to complete 10.2 years of school by her 18th birthday in India. However, since the
quality of schooling indicated by test score is only 56 per cent, the effective learn-
ing adjusted years of schooling ends up as 5.8 years. Along with deficits in health
(not discussed here), a child born in India today will be 44 per cent as productive
when she grows up as she could be, if she enjoyed complete education and full
health. The basic purpose of the HDI is to draw the attention of the countries on
the deficits of health and education up to 18 years of age, which are critical for a
country’s future. This should be taken as an early warning to countries to make
amends to their strategies and increase investment in improving the quality of
health and education of their young before they enter the workforce so as to reap
fuller benefits of changes like Industry 4.
The World Bank as a part of its World Development Report 2018 released HDI
for 157 countries among which India was ranked at 115 (PIB 2018a). The Gov-
ernment of India, instead of taking it as an alert on the consequences of neglect of
investment in early childhood health and school education, started questioning the
entire exercise of HDI (Maiorano 2018). Denying the veracity of indicators used
for India, the government politicized it. It would be very instructive to sum up the
objections raised by the Ministry of Finance: (i) the quality of adjustment data on
the school test score was old dating back to 2009; (ii) that the PISA and TIMSS
were controlled by non-UN agencies resulting in a conflict of interest; (iii) that the
purpose to “create political incentive for increased spending on health and educa-
tion” was questionable; (iv) that selective indicators were used for adult survival,
stunting and under-five mortality; and (v) that the matric of HCI was too simplis-
tic since issues of governance, political system, social and cultural contexts mat-
ter much! And the then Finance Secretary outright rejected saying, “HDI score for
India does not reflect the key initiatives that are being taken for developing human
capital in the country …” (GoI 2018, PIB 2018b). Even after such a solid evidence
of learning deficits from the official NAS data, questioning any warning on the state
of affairs on investment in human capital in India is only an indication of resistance
to change. Indeed, if any wise counsel should prevail on the Government of India, it
could have used the World Bank’s HDI data to obtain more concessional grants for
investment in education and health from the Bank’s soft lending affiliate, viz. Inter-
national Development Association.
India, along with the countries in the rest of the world, is committed to Sustain-
able Development Goals (SDGs). The SDG 4 is a commitment to “ensure inclusive
and equitable quality education and promote lifelong learning opportunities for all”
and as a part of it (SDG 4.1) to “ensure that all girls and boys complete free, equi-
table, and quality primary and secondary education leading to relevant and effective
learning outcomes” by 2030. It is in this context that the National Education Policy
2019 pronouncement that “the aim must be for India to have an education system by
2030 with access to the highest-quality education for all learners regardless of cir-
cumstances of birth or background” (MHRD 2019) raised hopes. But as of now nei-
ther in the budgetary allocations nor in terms of the institutional shift to increasingly
strengthened government schools are in evidence. This has been a growing cause for
increasing anxiety about failure to improve the capacity of the present generation of
children of India to face confidently the future work.
ISLE 13
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The Indian Journal of Labour Economics (2020) 63:199–224

Future of Work and Emerging Challenges to the Capabilities

Published online: 17 July 2020

Keywords Future of work · Industry 4 · Automation anxiety · Capabilities ·

1 Fourth Industrial Revolution

unemployment as a negative consequence. On the contrary, he was dreaming of

2 The Industry 4 and Future of Work: Automation Anxiety Versus

The results of several studies on the impact of the “Industry 4” technologies on

3 Industry 4 and Future of Work in India

4” on employment in India. We could begin with Islam’s (2019) discussion of the

4 Industry 4 and School Education Preparedness in India

of 14 years within a period of ten years of the commencement of the Constitution.

4.1 State of Early Childhood Education

In spite of worldwide recognition of the role of early childhood education in its

ods of primary grade learning of the 3 Rs. which can be counter-productive

4.2 Learning Crisis in School Education

Table 2 Performance by Subject Rural Urban Girls Boys

Scores are the percentage of correct answers

Table 3 Social group-wise Subject SC ST OBC General

Scores are percentage of correct answers

Percentage of children who can read a Standard II text at Standards

Percentage of children who can do basic subtraction and division* at

Table 6 Range of percentage Subject 0–35 35–50 51–75 76–100

1. Combined rural–urban government schools

Table 7 National achievement State Math- Science Social English MIL

A: Per cent of correct answers

4.3 Skill Development without Foundation

Table 8 Learning proficiency in Country Below minimum proficiency in Learning

programmes. Thus, the current education profile of workforce actually restricts

4.4 Privatization of School Education

in two processes: one is the unbridled and unregulated expansion of privatization

2010–2011 313,169 30 30 15 1887

4.5 Public Investment in Education as a Public Good

2009–2010 2.46 0.65 3.11

Expenditure by Education Departments

2004–2005 2.6 9.7

Elementary education 1.60 1.62 1.81 1.79 1.82

the capabilities of the younger generation to face up to the challenging changes in

5 Industry 4 and Preparing for Future Work

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1 Fourth Industrial Revolution

2 The Industry 4 and Future of Work: Automation Anxiety Versus

3 Industry 4 and Future of Work in India

4 Industry 4 and School Education Preparedness in India

4.1 State of Early Childhood Education

4.2 Learning Crisis in School Education

4.3 Skill Development without Foundation

4.4 Privatization of School Education

4.5 Public Investment in Education as a Public Good

5 Industry 4 and Preparing for Future Work