Recently Indian government decided to invest $11 billion to revive its state-owned Bharat Sanchar Nigam Limited (BSNL). BSNL has posted annual financial losses for the last twelve straight years. Currently, BSNL has over $7.3 billion in debt and was funded in the amount of $2.3 billion to keep it alive in 2022.
India’s telecom sector was opened to private enterprises in 1992. Today, over 85% of the market is controlled by private companies such as Jio, Bharti Airtel, Vodaphone, Tata, and other smaller companies. As in other hundreds of India’s government-funded companies, there is really no need for the government to fund another competitor in India’s telecom industry where rules of competition do not apply to government-owned entities. They can provide poor-quality service and lose any amount of money without any consequences. Not only BSNL investment is a waste of India’s tax-payers money, but fundamentally it puts downward pressure on retail telecommunication services hurting the overall industry. All earlier investments by the government in BSNL and continued funding are just guaranteed employment of 63,000 employees of BSNL.
India’s telecom industry employs over 4.5 million employees across its public and private telecom companies. If BSNL stopped providing services tomorrow, it would not be missed. Its assets will be acquired by one of the private companies and its employees will be absorbed easily in the marketplace. And at the same time, India’s government will be able to invest this money in its key responsibilities such as improving the education of its children.
When the government is investing over $11 billion in BSNL, in 2023, India’s education sector received its highest-ever allocation of $13.66 Bn in its 2023-24 budget. In 2022, India spent a total of $103 per K-12 child in comparison to $5,600 per student in China and $15,120 per student in the US.
India has been borrowing at an unprecedented rate over the last few years. Since 2018, India’s national debt is expected to double from $1.6 trillion in 2018 to $3.2 trillion in 2023. At this rate of borrowing, India’s national debt is expected to reach $5.2 trillion in 2028. India’s debt to GDP ratio has increased from 68.3 percent in 2019 to 90% in 2022. But a minimal amount of money has gone into educating its citizens – the key priority of a country’s government.
To build a first-world economy India must educate its citizens to be able to compete globally. Today’s world economy is led by technological innovation. First-world countries lead in technological innovations in industries such as renewable energy, semiconductors, telecommunications, transportation, and all other spheres of human life. Countries leading in all aspects of technology innovation have first and foremost made and continue to make investments in educating their population from K-12 to university education. Without a competitive workforce, India will continue to lag behind the developed world. Even after thirty years of mandates of dismantling the government control in industry, India’s taxpayers continue to fund mega money-losing government-run businesses. India still does not produce one single product used by the world. India’s lack of innovation can be directly attributed to its poor education system.
Today, India has more young people than any other country in the world going through an education system of thousands of public and private schools and colleges with outdated curriculums and teachers with little training. In a 2018 article, a former secretary for school education estimated that 16,000 colleges are handing out bachelor’s degrees to teachers without any qualifications. Another study found that out of 1.5 million engineering graduates coming out of India’s colleges every year, only 3.8% of engineers have the skills needed to be employed in software-related jobs at startups. Another five million students graduating every year from non-engineering disciplines are worse than engineering students. On top of it all, a large proportion of qualified students are leaving India for a better life outside India. As per yet another study, over 3 million college graduates left India in the last 6 years and the numbers continue to grow year-over-year with 770,000 students leaving in 2022 alone.
For India to provide a better future for its citizens and have any chance of becoming a developed nation, India must dismantle its thousands of government-run businesses by either selling them to the public or to private enterprises. Part of the money from such sales should be invested in improving its public education system by building new schools and improving the existing ones to international standards, updating its curriculums to world standards, and enforcing government oversight to improve teacher quality. Finally, the government must make sure that the public and private schools and colleges are in the business of educating their students rather than just being a business of defrauding its citizens and the future of India’s children and the country itself.
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