Education and Development Linkages in South Asia (II)

Nepal is the only country where internal factors and forces of globalisation have not helped in substantially increasing the demand for and use of education on the one hand and the better and more opportunities for educated people on the other hand.

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Part II: India and Nepal


In India, there has been an increase in the enrolment, retention and completion of school education (and also higher education) after the opening up of the economy in the mid-1980s.1 However, nearly 50 percent of the students drop out without completing their secondary school education.2 The quality of education is not satisfactory as evident from periodical surveys that measure the learning achievements of students.3 Though there is a notable improvement in the provision of school education,4 there are socio-economic determinants in the completion and learning achievements (Santhakumar et al, 2016). Those who drop out and perform poorly are more likely to come from socially and economically vulnerable groups (Ibid) and are more likely to be first-generation learners. On the other hand, a small section of Indians (mostly those belonging to the so-called upper castes and whose family members have been receiving education for generations) are doing well in higher education and in jobs that require such education.5 Many Indians can be seen at the higher echelons of international academia and global corporate organisations.6 Hence, education in India is characterised by this dual picture –a minority is doing very well globally through the achievements in education, and nearly half of the youngsters are not even completing school education.

India achieved significantly higher economic growth after the mid-1980s, that is, after the economic reforms which attempted to integrate the Indian economy with that of the world.7 However, India’s position is at a lower level in terms of human development than that of Sri Lanka and Maldives (from South Asia) and almost all other countries in South-East Asia (including Thailand and Indonesia). There are problems that work against the translation of economic growth into higher levels of human development, and the problems in the education domain are important in this regard. India’s economic growth was driven mainly by developments in the service sector.8 It provided jobs to those higher educated sections which were underemployed during the period of closed economy.9 The growth of the service sector has also increased the demand for people with higher education and especially technical education (mainly due to the development of Information Technology (IT) and IT-Enabled Services (ITES). There has also been a consequent increase in public pressure to enhance the availability of higher education facilities like engineering colleges (Choudhury, 2016). Economic reforms and consequently higher economic growth were followed by an increase in enrolment in schools,10 partly driven by the demand for educated people, and partly due to the increase in investments made by central and state governments to improve the access to school education. This may give the impression that globalisation (that was facilitated by economic reforms) and contextual factors together had a positive impact on education.

However, there are other not so desirable aspects in the growth story of India. Though the share of agriculture in the GDP of the country has decreased, nearly 42 percent of the population of the country continues to depend on it for their livelihood.11 Another major source of employment is the construction sector. The growth of employment in the formal industrial sector has been slower or stagnant. The slower development of manufacturing and industries in India did not lead to a notable increase in employment (Thomas, 2013) and this worked against the decent employment of those who have only completed school education.12 It is noted that the returns on education have increased inequality after the economic reforms (though the access to education has reduced inequality during the same period).13 Those youngsters who complete school education have to take one of the two options, namely, (a) to be employed in not-so-productive agriculture or take up unskilled or semi-skilled work where the proficiencies acquired in school education are not very relevant; or (b) go for one or the other type of higher education. The share of students who go for higher education among those who complete school education is higher in India than in some of the developed countries.14 Those who complete specific programs in higher education may look for (and some of them may get) a job in the service sector (including the government). On the other hand, the majority of school students who are not planning to go for higher education are unlikely to get a job in the formal industrial or service sector. This can discourage them from completing school education successfully. Hence, the contextual factors which dampened manufacturing growth had an impact on the way education is demanded and used in India even though economic growth facilitated through globalisation has increased the demand for and use of education in general. The slower pace of manufacturing development and hence, the jobless’ growth (Sen, 2019) of the economy dampened the incentives for sections of people to complete school education. The parents of these children perceive that their children would have to take up less-skilled work, and higher levels of education (including the completion of school education) are not needed for that purpose.15

One can look at this trend from a different perspective too. As noted earlier, the lower caste groups were historically deprived of education in India. The scheduled tribes were, and still are, also not actively seeking education. In addition, there has been a reluctance to educate girls. If at all they were educated, the focus was on getting them married; they were not encouraged to take up paid work.16 The post-independent governments did not focus on mass education17 and instead made relatively more investments in higher education. The minority of educated workers who were underemployed during the pre-reform (closed economy) period could get opportunities in the service sector after the reform. The majority of the workers were uneducated and taking up unskilled work even in the 1990s when the Indian economy got integrated with the international markets. Hence, the supply of educated workers to take up factory or industrial jobs in India was lower in comparison with that in China18 or Vietnam or other East- and South-east Asian countries, where the coverage of education was higher, and girls faced a more enabling environment to take up paid employment. This could have a negative impact on the development of manufacturing in India. These factors indicate that there could be a two-way relationship between the under-achievements in education on the one hand, and the skewed nature of economic growth of the country, on the other. The lack of inclusive economic development and underachievement in education for a sizeable section of the population is part of a vicious equilibrium.

The underachievement in education also shapes human development in India. Though there are states in India where the human development index is comparable to the best in the region, there are others with life expectancy and infant mortality at the worst in the region. These regional differences within the country are also connected to the variations in terms of the coverage or use of education.

Hence, the crucial feature of educational development in India is fragmentation. A small section is doing well in terms of both education and income/​affluence whereas the majority remain less educated and is leading financially vulnerable lives. The contextual factors and the process of globalisation have only accentuated this fragmentation. Those who are at the bottom continue to be those social groups that witnessed marginalisation in the past. To some extent, the way education is used, and the consequent economic development have aggravated the traditional inequalities in the country.19


Nepal has many similarities with India. The caste system (Subedi, 2011) and discriminatory gender norms prevail.20 These can have impacts on literacy and education.21 In addition, parts of the country are mountainous and have isolated settlements. The democratic governments that came into being in the 20th century did not make serious and effective efforts to provide education for all.22 Hence, caste fragmentation (DFID, 2006) and gender discrimination (Sapkota et al, 2019) continued to affect the access to and use of school education. There are tribal communities (as in India) which too face challenges in terms of education (Bennett, 2008). All these reflect in the lower enrolment of girls23 and children from lower castes and tribal groups in secondary grades and higher levels of education. Unlike India, Nepal did not invest much in higher education24 There has been an opening up of higher education in Nepal lately, which is leading to a higher dependence on private colleges and universities.25

The economic development of Nepal has been sluggish for a long time. It was estimated that the average growth rate during 1965 – 85 was only 0.1 percent per year, and that was the fifth-lowest in the world.26 The economy did not go through a notable development even afterwards and remained at less than 2 percent even after economic reforms. Economic growth has been the lowest in Nepal compared to other countries in the region.27 Though Bangladesh was comparable to Nepal in terms of per-capita income during the period before 1985, it witnessed significant growth afterwards. This is despite the structural adjustment made after the mid-1980s28 in Nepal. There were not many economic opportunities in the manufacturing sector.29 The share of the industrial sector in the GDP has increased to only 16 percent during 1975 – 2010, and that of manufacturing to only 7 percent. The opening up of the Nepalese economy led to the import of goods from China and India, both of which have competitive advantages over Nepal in the production of these goods. This led to stagnation in the development of the manufacturing sector in Nepal. Though there has been development in the service sector (including tourism), it has not been enough to increase the per-capita incomes notably.

Nepal is the poorest country in South Asia.30 The unemployment rate of 42 percent is also very high.31 Remittances from migrant workers remain the main source of income for private consumption.32 Hence, the economic and employment opportunities other than migration could not drive the demand for education in Nepal.

The sluggish economy does not enable the governments to invest too many resources in school education.33 Hence, the use of education is also driven by the demand which, in turn, is determined by the family circumstances of children. The elites and affluent sections use schools whereas other sections of people do not see much benefit from educating their children. The contribution of household to education is significant (which is about 3.5 percent of the GDP34), and this shows the possible disparities in educational outcome based on the affordability of family to spend enough resources for education. All these create a situation where a notable section of children does not complete schooling. There is about 5 percent of children who drop out of even the primary grades. Those who enter grade VI could be less than 70 percent of those who enter grade I, indicating a higher dropout rate in secondary grades (Devkota and Bagale, undated). The children who do not attend even primary school are more likely to come from the lower caste groups.35

In summary, the education-development interlinkage is at a low-level equilibrium in Nepal due mainly to disabling social conditions like caste and gender discrimination. Economic development was not remarkable enough to provide incentives to the majority of the parents to use higher levels of education for their children. Hence, Nepal is the one country where internal factors and forces of globalisation (or externally driven economic opportunities) have not helped in substantially increasing the demand for and use of education on the one hand and the opportunities for educated people on the other hand.


1. A discussion on the nature of economic development during the last four to five decades can be seen in several articles and books. A review can be seen in Santhakumar, et al (2016).

2. https://​www​.unicef​.org/​i​n​d​i​a​/​w​h​a​t​-​w​e​-​d​o​/​e​d​u​c​ation (accessed on 4 August 2021).

3. These are described in the ASER reports annually. https://​www​.aser​centre​.org (accessed on 3 August 2021).

4. Muralidharan, K. (2013). Priorities for Primary Education Policy in India’s 12th Five-year Plan. India Policy Forum, 9, 1 – 46.

5. For example, the Indian Americans. In 2003, only 1.5 percent of Indian immigrants in the United States were Dalits or members of lower castes, according to the Center for the Advanced Study of India, University of Pennsylvania. More than 90 percent were from high or dominant castes. About 2.5 million people of Indian descent live in the US, including those born there. https://​www​.pri​.org/​s​t​o​r​i​e​s​/2019 – 03-08/us-isn-t-safe-trauma-caste-bias (accessed on 4 August 2021).

6. Indians are currently CEOs of several global corporations, including Microsoft and Google.

7. It has been on average around 5 percent during the last thirty years (before the start of COVID-19).

8. An optimistic amount of the impact of economic reforms can be seen in Panagariya (2003).

9. India was giving adequate importance to higher education after its independence, and this created a pool of people with higher education, but they were not employed fully until the opening up of the economy.

10. The GER in upper primary schools (48 grades) was 41.9 in 1980 – 81 and that has increased to about 95 percent in 2018.

11. https://​www​.sta​tista​.com/​s​t​a​t​i​s​t​i​c​s​/​271320​/​d​i​s​t​r​i​b​u​t​i​o​n​-​o​f​-​t​h​e​-​w​o​r​k​f​o​r​c​e​-​a​c​r​o​s​s​-​e​c​o​n​o​m​i​c​-​s​e​c​t​o​r​s​-​i​n​-​i​ndia/ (accessed on 4 August 2021).

12. Whatever employment that has grown is in the informal industries without any protection and social security for the workers.

13. Pieters, J. (2009) Education and Inequality in India: A Micro econometric Decomposition Analysis, http://​www​.ecineq​.org/​e​c​i​n​e​q​_​b​a​/​p​a​p​e​r​s​/​p​i​e​t​e​r​s.pdf (accessed on 4 August 2021).

14. The Gross Enrolment Ratio in Higher Education in India is around 25 percent. However, nearly 50 percent do not complete school education. Hence, percentage of those who go for higher education among those who complete school education is around 50.

15. We have seen this while conducting case studies for our book Santhakumar et al (2016).

16. The (paid) work participation rate of adult females is only 18 percent in 2021: For a discussion on this issue, refer to ILO document. https://​www​.ilo​.org/​w​c​m​s​p​5​/​g​r​o​u​p​s​/​p​u​blic/ — asia/​— ro-bangkok/ — sro-new_delhi/documents/publication/wcms_559102.pdf

17. This is documented by a number of observers, including Naik (undated) who was an integral part of the education policymaking during that era.

18. A comparison with China is notable: China has out-performed India in primary and secondary education along a broad spectrum of access, quality, and delivery indicators. India, on the other hand, enjoys a competitive edge over China in higher education. Recently, India has begun catching up with China in K – 12 education, while China has already overtaken India in terms of the college enrolment and number of graduates.’ Goldman, C. A. Et al (2008) Education and the Asian Surge A Comparison of the Education Systems in India and China, Rand Corporation. https://​www​.rand​.org/​c​o​n​t​e​n​t​/​d​a​m​/​r​a​n​d​/​p​u​b​s​/​o​c​c​a​s​i​o​n​a​l​_​p​a​p​e​r​s​/​2008​/​R​A​N​D​_​O​P​218.pdf (accessed on 4 August 2021).

19. This is noted by different commentators. Refer to the blog by Anjali Taneja who has coauthored the Oxfam International Report. https://​www​.oxfa​min​dia​.org/​b​l​o​g​/​h​o​w​-​c​a​n​-​i​n​d​i​a​s​-​e​d​u​c​a​t​i​o​n​-​s​y​s​t​e​m​-​e​s​c​a​p​e​-​v​i​c​i​o​u​s​-​c​y​c​l​e​-​i​n​e​q​u​a​l​i​t​y​-​a​n​d​-​d​i​s​c​r​i​m​i​n​ation

20. Some of these issues are discussed in ADB. 2004. Report and Recommendation of the President to the Board of Directors: Proposed Loan to the Kingdom of Nepal for the Gender Equality and Empowerment of Women Project. Manila.

21. It can be more pronounced in certain regions. For example, in Mugu only 9.2 percent of females are literate whereas male literacy is about 45.1 percent. Ghimire, Ram. (2005). Education Reforms in Nepal: Rhetoric or Reality. https://​www​.research​gate​.net/​p​u​b​l​i​c​a​t​i​o​n​/​257142350​_​E​d​u​c​a​t​i​o​n​_​R​e​f​o​r​m​s​_​i​n​_​N​e​p​a​l​_​R​h​e​t​o​r​i​c​_​o​r​_​R​e​a​l​i​t​y​/​c​i​t​a​t​i​o​n​/​d​o​w​nload (accessed on 5 August 2021).

22. A number of writings note that the political system in Nepal has not been that interested in making inclusive education an agenda until recently. For example, Bhattachan (2003)..

23. For a review of literature on this issue, refer Bista, M. (2004). Review of Research Literature on Girls’ Education in Nepal. UNESCO Kathmandu series of monographs and working papers No. 3, Kathmandu: UNESCO.

24. Though one college was started in 1918, most of the developments in this regard happened after 1950s. http://​www​.npc​.gov​.np/​i​m​a​g​e​s​/​c​a​t​e​g​o​r​y​/​S​t​u​d​y​-​o​n​-​t​h​e​-​e​f​f​e​c​t​i​v​e​n​e​s​s​-​o​f​-​i​n​v​e​s​t​m​e​n​t​-​i​n​-​h​i​g​h​e​r​-​e​d​u​c​a​t​i​o​n​-​p​r​o​j​e​c​t.pdf (accessed on 3 June 2021)..

25. Even the public universities are compelled to offer courses on a full-fee basis due to inadequate funding from the government. For a discussion of issues in higher education, refer Joshi R D 2018. Higher Education in Nepal, Supporting Aspirations for Prosperity”. Kathmandu. https://​edu4​com​.com/​h​i​g​h​e​r​-​e​d​u​c​a​t​i​o​n​-​i​n​-​n​e​p​a​l​-​s​u​p​p​o​r​t​i​n​g​-​a​s​p​i​r​a​t​i​o​n​s​-​f​o​r​-​p​r​o​s​p​e​rity/ (accessed on 5 August 2021).

26. World Bank (1987) World Development Report 1987, World Bank, Washington, D C.

27. World Bank (1987) World Development Report 1987, World Bank, Washington, DC.

28. Shrestha, P K (2010) Structural Changes and Economic Growth of Nepal, New School for Social Research, New York.

29. The growth rate of the industry is lower in comparison with those of agriculture and services. Bajracharya, S. L. (2014).

30. https://​www​.usaid​.gov/​n​e​p​a​l​/​e​c​o​n​o​m​i​c​-​g​r​o​w​t​h​-​a​n​d​-​trade

31. https://​www​.usaid​.gov/​n​e​p​a​l​/​e​c​o​n​o​m​i​c​-​g​r​o​w​t​h​-​a​n​d​-​trade

32. https://​www​.world​bank​.org/​e​n​/​c​o​u​n​t​r​y​/​n​e​p​a​l​/​p​u​b​l​i​c​a​t​i​o​n​/​n​e​p​a​l​d​e​v​e​l​o​p​m​e​n​t​u​pdate

33. This is not about the share of the GDP and but the absolute amount of resources considering the needs in a mountainous geography

34. NIRT (2016). Nepal Education Sector Analysis. Kathmandu, Nepal.

35. The largest proportion of these children belong to the ethnic community and the so-called schedule caste” groups. A study has shown that ethnic communities like Musahar and Dusadh have literacy rates less than 10%.’ Ghimire, Ram. (2005). Education Reforms in Nepal: Rhetoric or Reality, https://​www​.research​gate​.net/​p​u​b​l​i​c​a​t​i​o​n​/​257142350​_​E​d​u​c​a​t​i​o​n​_​R​e​f​o​r​m​s​_​i​n​_​N​e​p​a​l​_​R​h​e​t​o​r​i​c​_​o​r​_​R​e​a​l​i​t​y​/​c​i​t​a​t​i​o​n​/​d​o​w​nload (accessed on 5 August 2021).


V Santhakumar, Professor, Azim Premji University, Bangalore

Featured photo by Lightscape on Unsplash

This is Part 2 of 6 parts that will be published over the coming weeks.