Government intervention in education and health
Topic: Human Capital: Education, Health and Demographic Dividend · NCERT: Class 11, Ch 4 "Human Capital Formation in India"
Meaning
Government intervention in education and health means the state funds, provides and regulates these services instead of leaving them to the market. The reasons are:
- Education and health give social benefits as well as private ones.
- Wrong choices are hard to reverse.
- Families lack information about the true quality and cost of services, so providers gain monopoly power and can exploit them.
- Many poor people cannot afford these services.
So the state sets standards, makes private providers charge a "correct price", and gives basic services free to deserving and socially oppressed groups. The union, state and local governments all spend on education and health.
Example
The RTE Act 2009 reserves 25% of seats in private unaided schools for children from economically weaker sections (EWS) and other disadvantaged groups. In health, the National Medical Commission (NMC Act 2019) regulates medical education and practice.
Don't confuse with
- Nationalisation: in this case, private providers still exist alongside public ones. The state regulates them rather than taking them over.
Related concepts
- Education expenditure ratios
- Six per cent of GDP for education
- Free and compulsory education
- Expenditure per student