The Case for Publicizing Government Collected School Data to Improve Impact Measurement within Indian Education Impact Investing
For decades, public sector spending towards education in India has been inadequate to accommodate the needs of the Indian population. As a result, India’s education system has been hindered by limited resources and insufficient infrastructure. Over the past twenty years, private sector impact investing has helped to fill a critical financing gap within Indian education. Impact investing refers to investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. While impact investing has emerged an effective tool to support Indian education, the field is not perfect.
I argue that using single, academic metrics, such as test scores, as the basis for impact measurement hinders the long-term effectiveness of education impact investing in India. As observed through the United States’ No Child Left Behind Act of 2001 (“NCLB”), hyperfocusing on such metrics can result in the negligence of deeper structural issues. This paper proposes that the Indian government should publicly release the data it collects on schools to help education impact investors better measure and correct structural challenges within the education sector, ultimately improving student learning.
As impact investing attempts to become an effective tool in the education sector, several shortcomings emerge. These include public sector misalignment, short-term investment time frames, standardized impact scoring frameworks, and the neglect of regional or traditional schools. Furthermore, there have been other forms of education funding and support in India, namely from NGOs, non-profits, and corporations. While these areas are important to explore further and potentially reform, these challenges are not discussed in this piece due to its limited scope.
I. Historical Origins and Structure
In 1966, the Indian Education Commission conducted a “detailed analysis of trends regarding economic growth, population growth, growth in enrollment, and expenditure per student and ultimately suggested that 6% of India’s GDP be allocated towards education” (Tilak, 2006, p. 613). Not only did this investment benchmark meet the needs of the Indian population, but also it was comparable to that of other advanced economies. The Indian government accepted the commission’s suggestion to allocate 6% of GDP towards education. However, India never reached this allocation target despite subsequent recommendations in the National Education Policies of India in 1968, 1986 and 1992 of 6% (Patel & Annapoorna, 2019, p. 97) (see Figure 1).
Figure 1
Share of Government Expenditure on Education Relative to GDP
Note: This figure demonstrates India’s long standing failure to allocate 6% of GDP towards education dating back to 1950. India made progress towards the 6% allocation benchmark between 1950 and 1998, but these efforts faltered in recent decades. The data from 1950 through 2005 is from “On Allocating 6 per cent of GDP to Education”, by J. Tilak, p. 613, 2006. The data from 2006 through 2013 is from “Indian Government Expenditure on Education”, by the World Bank, 2020.
Inadequate public education spending has resulted in insufficient infrastructure and resources. Recent research found that “there is a teacher shortage of 689,000 teachers in primary schools, only 53 percent of schools have functional girls’ toilets and 74 percent have access to drinking water” (Sahni, 2017). These shortages, amongst other factors, are why India ranks 116th out of 174 countries in the World Bank’s Human Capital Index, a measure of how domestic education contributes to productivity across countries (World Bank, 2020).
Over the past twenty years, private sector impact investing has helped bridge a critical financing gap within Indian education. While impact investing can occur across sectors, education stood out as the sector where the most impact investors had made investments in India (Ravi et al, 2019, p. 19). This is likely due to inadequate public funding in the sector, which leaves ample opportunities for private sector funding to support socially-effective interventions. One example of private sector intervention is the “mushrooming of the private school sector which can be attributed to the lack of government schools, and desire of parents for instruction in English” (Tooley & Dixon, 2007, p. 16).
While impact investing has emerged as an effective tool to support education, Indian impact investors face a multitude of challenges, partly due to the nacency of the field. They identify exit opportunities, capital allocation across the risk-return spectrum, and impact measurement as the most significant challenges (Ravi et al, 2019, p. 19) (Figure 2). Exit opportunities and capital allocation are associated with financial returns, but there is potential in impact measurement to materially strengthen student learning and create systemic change. Thus, this paper explores impact measurement.
Figure 2
Challenges Faced by Indian impact investors
Note: This figure highlights the challenge impact investors face when it comes to impact measurement in India. Nearly 30% of those surveyed listed “impact measurement” as a significant challenge. Reprinted from “The Promise of Impact Investing in India”, by Ravi et al, 2019, p. 19, The Brookings Institute.
II: Education Impact Investing: The Challenge with Singular, Academic Metric Reporting
Singular, academic metrics are often used to measure the impact of education investments. These metrics can mask and neglect deeper structural issues. Because of India’s underfunded education system and legacy of social discrimination, it is imperative that impact investors revise their measuring frameworks to understand and combat structural issues within the education sector.
In the status quo, education impact measurement often utilizes single, academic metrics. By definition, impact investing “includes only those investments that have a clearly defined intentionality for achieving measurable impact” (Ravi et al, 2019, p. 10). Thus, when it comes to measuring impact, investors will often choose to track easily quantifiable metrics such as test scores. One India-based impact firm, Acumen, made a 2015 investment in Vikalp, a experiential math curriculum (Acumen, 2020). Today, the firm cites that Vikalp increased student math exam performance “up to 50%” as a way to demonstrate the curriculum’s impact. Asha Impact, another India-based impact firm, invested in Avanti, a curriculum that supports students preparing for college entrance exams. To demonstrate the impact of this company, Asha Impact cites that “44% of Avanti’s students cleared the [entrance] exam” (Asha Impact, 2021). While these measuring strategies demonstrate improved test performance on the aggregate, they neglect and propagate structural issues that may negatively impact student outcomes.
Government policies in the US have demonstrated this phenomenon, and it is possible that the current impact measurements yield a similar result in India. As shown through NCLB in the US, hyperfocusing on single, academic metrics can result in the negligence of deeper structural issues. The NCLB Act required that students take standardized tests annually. If a threshold of students did not reach a proficient level, teachers and schools were penalized. The framework prioritized test scores and ignored many of the structural issues in schools such as inadequate teacher preparation, under-resourced classrooms, or inadequate healthcare for poor children (Darling-Hammond, 2017). Moreover, the structure of the NCLB framework incentivized teachers to neglect the most-structurally disadvantaged students. Teachers would strategically improve metrics by “focusing their efforts on students likely to score near the cutoff for proficiency, known as the ‘bubble kids’” (Whitney & Candelaria, 2017). Underperforming students would be neglected. This underperformance was often a “consequence of structural inequalities in access to resources, presenting profound barriers to students from racial and ethnic minority groups” (Smedley, 2001). In 2015, NCLB was replaced. However, it demonstrated that hyperfocusing on outputs can mask or perpetuate structural issues.
Because of India’s legacy of social discrimination and inadequate public sector funding, it is especially important for Indian impact investors to understand and combat the structural issues within education. India has a profound legacy of caste discrimination, rural neglect, and misogyny. India’s caste system is one of the world’s longest surviving social hierarchies, dating back to over 2000 years ago (Narula, 2001). Moreover, a recent Reuters survey found that “India is the world’s most [discriminatory] country for women” (Goldsmith & Beresford, 2018). These long-standing factors have contributed to an “education debt,” a term that describes the cumulative impact of centuries of education discrimination (Ladson-Billings, 2006). In the context of India, this education debt has been reinforced by inadequate public sector education investment. Until India confronts the educational debt and addresses the factors that contribute to it, children will continue to be left behind (Ladson-Billings, 2006). Because public education funding has been inadequate in India, it is especially important for impact investors to combat these structural issues. In order to do this, investors must reform their measuring frameworks to better understand the structural issues and effective solutions.
III. Impact Investors Collecting Teacher Input by the Government Publicizing Data
Education impact investors should incorporate teacher input into their investment process to better understand structural challenges in the education system. While there is no established process by which impact investors can collect teacher input in India, the Indian government collects teacher surveys and school reports annually on dozens of structural factors. This section proposes that the government should publicize this data to enable impact investors to easily quantify and track structural metrics.
The teacher is best suited to understand structural challenges and resource needs in the classroom. A 2015 study in Kenya–a country that faces significant resource limitations like India–found that teachers were well-positioned to determine when there were inadequate resource or infrastructure constraints, as the constraints would pose a significant barrier to successful education (Okongo et al, 2015). Similarly, a US study across Virginian middle-schools found that “teachers’ rating of the quality of school facilities predicted students’ standardized test scores and this was driven in part by teachers’ perceptions that the school climate was worse in schools with poor facilities” (Cheryan et al, 2014). These studies suggest teachers are an effective group to identify the structural challenges, like inadequate facilities or resource constraints, that may impact student performance. By seeking teacher feedback, the structural challenges that underlie student performance metrics will become more apparent and easier to address.
While teachers are often the best party from which to understand contextual challenges in schools, their voices are often ignored when it comes to impact investing in India. The India Impact Investors Council (“IIC”) is India’s national impact investing body, designed to support the ecosystem through government engagement, policy advocacy, and research publications. There are 42 member organizations within the IIC, some of which are impact investing firms, consultants, foundations, and international governments (Impact Investors Council, 2021). Of these 42 members, eleven are impact investment firms that focus on education and have annual impact reports. Yet, according to the most recent impact report from each of these eleven firms, only one actively sought teacher input when measuring the impact of their investments (see Appendix A for the list of impact reports). In the status quo, investors rarely account for the teacher perspective, partly because distributing and collecting teacher surveys is more arduous than using established tracking metrics like test scores. This disconnect between investors and teachers should be addressed because of the unique role teachers hold in understanding the structural factors that contribute to student performance.
In order to enable impact investors to gather teacher input, the Indian government should publicly release the data it collects through the Unified District Information System for Education (“U-DISE”). Maintained by the Indian government, U-DISE collects school data on “enrollment across grades, gender and caste representation, dropout rates, infrastructure facilities available in schools, teachers and their qualifications, incentives given to students and expenditure of government funds” (Bordoloi, 2019). The data–generated in part through extensive teacher surveys–taps into many of the structural issues that current metrics used by firms do not reveal (see Appendix B for a sample school report card). According to the U-DISE website, this data is being used to help the State and Central Government frame educational policies and monitor their implementation (Government of India, 1). However, the data is not publicly accessible. Currently, the process by which external parties obtain access to the data is lengthy and arduous:
Organisations seeking data…would be required to execute a Non-disclosure Agreement which will govern this sharing of data. Additionally, they would be required to nominate a nodal officer and an alternate nodal officer who would be the authorized contact person for data transmission and communication related to the same. (Government of India, 11)
This complex process is likely to dissuade impact investors from accessing this data. As such, the government should make the database more accessible by publicly releasing the data. Doing so will provide impact investors with the means to quantify structural metrics that were formerly hard to measure.
IV: Concluding Analysis
The Indian government has failed for years to adequately fund the Indian education sector. The government now relies heavily on private sector investment to strengthen education due to its own lack of resources. Private sector impact investors have, for decades, relied on single, academic metrics as a measure of impact success, leading to the neglect of many structural issues. Because of this, the Indian government should publicly release U-DISE data, including teacher feedback surveys and school report cards.
By making this data available, impact investors will be more likely to focus on the structural issues within the Indian education sector as they would be able to demonstrate growth on such metrics. Metrics that are now hard to measure, such as the functionality of bathrooms or the availability of drinking water, would become substantially easier to track. When structural metrics are easier to measure, impact investors are more likely to allocate capital towards these issues.
This allocation of capital can help address long-standing structural challenges that have received limited government intervention and support. Impact investors will be more inclined to allocate capital towards solutions that improve school infrastructure, teacher preparation, and other structural challenges once they are able to measure them. Most importantly, investing in these areas is likely to deeply improve student learning and wellbeing.
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Appendix A
Aavishkaar Group. (2021). (rep.). Aavishkaar Group impact report 2020. Retrieved from https://aavishkaargroup.com/pdf_download.html
Acumen. (2020). (rep.). 2020 Acumen Annual Report (pp. 1–35). Retrieved from https://acumen.org/wp-content/uploads/2020-Acumen-Annual-Report.pdf
Ankur Capital. (2018). (rep.). Ankur Capital’s impact report 2018. Retrieved from https://www.ankurcapital.com/post/driving-change-ankur-capitals-impact-report-2018
Asha Impact. (2019). (rep.). Annual impact 2019 report. Retrieved from https://ashaimpact.com/Admin/CMS/PDF/Annual%20Impact%20Report%202019-%20Asha%20Impact.pdf
Bardhan, S., Kubzansky, M., & Bannick, M. (n.d.). (rep.). Omidya Network’s First 10 Years: An Impact Analysis (pp. 1–28). Omidyar Network.
Caspian. (2019). (rep.). Caspian impact investments social performance report 2018-19. Retrieved from https://www.caspian.in/wp-content/uploads/2020/02/sprfy-19.pdf
Gray Matters Capital. (2019). (rep.). 2019 Impact Report. Retrieved from https://graymatterscap.com/wp-content/uploads/2019/05/edLABS-Fin-Impact-Report-2019.pdf
KKR. (2018). (rep.). 2018 ESG, Impact, and Citizenship Report. Retrieved from https://kkresg.com/assets/uploads/pdfs/2018-ESG-Impact-and-Citizenship-Report.pdf
Northern Arc Capital. (2020). (rep.). Annual Report 2019-20. Retrieved from https://www.northernarc.com/assets/uploads/pdf/NorthernARC-AnnualReport-2019-20-1619512175.pdf
Oiko Credit . (2020). (rep.). Impact Report 2020. Retrieved from https://www.oikocredit.coop/en/impact-report
Unitus Capital. (2021). (rep.). Exit Report 2021. Retrieved from http://unituscapital.com/uploads/pdf-files/Exit_Report_20211.pdf