The recent meltdown has forced a new debate among rich nations — about missed economic opportunities due to an underperforming education sector. It has spurred a new vigour in official spending on education.
According to a McKinsey report, the current US GDP would have been higher by 9% to 16%, that is, $1.3 to 2.3 trillion, if the high school pass outs had been equipped with the requisite skills. Strangely for us even as a developing economy, spending is not the issue, but educational reform is, if we want to spur our economic opportunity.
Despite an impressive annual $55 billion outlay for education, India suffers from a double whammy of missing social and economic opportunities. A national average dropout rate of 50% means about $15 billion spent annually on education is unproductive, if not a complete waste. Each percentage reduction in this rate can add our GDP — some say, at least a 25%.
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