The economic case for investing in India’s children Premium

Early childhood education has remained both under-invested and under-explored over decades in India

It might seem self-evident that India’s children deserve economic investment, given the country’s focus on demographic dividend, education and jobs. But, somehow, early childhood education has remained both under-invested and under-explored over decades. It is often trivialised, as child’s play, or limited to the household domain, perhaps because it has traditionally been women’s work. With the increasing focus by the government on women-led development, including a new survey by the Ministries of Women and Child Development and Labour (announced on January 30) on working women, care work and early childhood are finally being seen as part of the critical work of running a country.

The argument for increased investment in early childhood care and education (ECCE) is a basic one — human resources are the bedrock of a nation, and early childhood is the bedrock of a human being. Slowly, but surely, the Indian developmental state has fostered and catered to parental aspirations for education, targeting first access, crossing 100% gross enrolment ratio at the primary level, and now quality, with an increased focus on measuring learning outcomes. There is also realisation that India’s young learners are struggling: a large number of Standard three learners are unable to read Standard two text or do basic subtraction.

This has prompted a shift to focus even earlier in the life cycle, i.e., children under six, leading to initiatives such as the Ministry of Education’s National Initiative for Proficiency in Reading with Understanding and Numeracy (NIPUN) Bharat for foundational literacy and numeracy, and the Ministry of Women and Child Development’s (MWCD) Poshan Bhi Padhai Bhi to improve ECCE quality through the Anganwadi system.

The interim Budget 2024’s promise of expediting the upgradation of Saksham Anganwadis and providing Ayushman Bharat services for Anganwadi workers, Accredited Social Health Activist (ASHA), and helpers is encouraging.

In 2023, the outlay for teaching-learning materials tripled, increasing from approximately ₹140 crore to ₹420 crore per annum, assuming 14 lakh Anganwadi centres, catering to India’s poorest eight crore children under six. For context, the 2024-25 budgeted expenditure on centrally sponsored schemes, which form a substantial part of Centre-State fiscal transfers, is ₹5.01 lakh crore. Of this, the Anganwadi system is allocated about ₹21,200 crore, which is more than rural roads (₹12,000 crore) and irrigation (₹11,391 crore), but less than the National Education Mission (₹37,500 crore) and the National Health Mission (₹38,183 crore). The Department of Higher Education receives around ₹47,619 crore, for a total of approximately four crore enrolled learners, who undoubtedly come from the more privileged sections of Indian society.

Recent research provides further cause for expanding allocation and expenditure by the Centre and the States. Quasi-experimental impact evaluations using existing survey data have proven cognitive and motor skills improvement in Anganwadi-attending children over others, particularly reducing gender and income-related gaps. According to a study in 2020, children exposed to the Anganwadi system from ages zero to three go on to complete 0.1-0.3 more grades of school. Evidence at the individual-level is building, but the macroeconomic implications remain underexplored.

To determine what to spend on — infrastructure, capacity building, materials, and staffing — it is necessary to match the micro to the macro, the amounts in paise to the amounts in lakh and crore. Estimates are required of the potential gains to GDP from the proven individual benefits of strong ECCE: improving women’s physical and mental health, lifespan, public health expenditure, children’s educational attainment, their physical and mental health, and even social unrest.