I have a friend who is part of a religious group which runs a school in tribal Maharashtra. What started off as a small school with 40 students is now a big school with 800 students. This obviously speaks about the popularity of the school.

Why is the school popular?

they provide good lunch, uniform, books, and use amazingly good tools for education. Computers, etc. of course is a given. Seriously the main reason could still be the food -but he believes slowly they will learn and grow better. A few children have now gone for higher studies..and some more are planning to study abroad too.

All this is free. A bus to pick them up and drop them back. A job for many of the parents – making food items for being supplied to the outside world. You too may have eaten their Khakras (if you happen to have bought it in Reliance – one of their very important clients). There is no medical insurance as of now – but recently the organisation picked up the medical bill running into 6 digits. All free of course.

My crib is not about giving things free, just that it becomes addicting and there it becomes unending and almost of no gratitude. Some of the complaints include ‘bus comes to the end of the village’ or things like that.

My take is:

charge a small fee – maybe Rs. 500 if a child fails in an exam. Education is free, but there has to be a responsibility.

bus – 2/3 sets of parents to learn driving and be willing to work as a driver for salary of Rs. 5000 a month. A regular driver costs Rs. 20,000 for a heavy vehicle in a village where such skills are not easy to find.

medical – the ashram should take a medical policy but each employee and each kid to contribute Rs. 100 per month. The real/actual cost is Rs. 300 per person per month. Of course the ashram can enroll people in the PM’s yojana – I will ask them to check out that possibility.

there is no hospital nearby, so getting a free ambulance is of no use – in fact the car is used to ferry people up to 78 kms – to the nearest hospital.

it is not very difficult for the ashram to get donations, but any activity has to be self sustaining. If the people who earn well (the cook is paid a salary or 20k a month, but does not contribute for his medical care) do not think that they should pay anything for for their own old age needs (pension), risks (medical and disability insurance) or for protecting his family (life insurance)…it may not sustain after some time.

My take on subsidy is – give only to people who appreciate the need for the same. I am happy to pay half the medical premium and term insurance premium for my employees but not full. After all I am not running a business – where it becomes a HR activity – but just a retired person and using the service of a domestic servant.

When a person knows that somebody will pay and take care of all their needs, they tend to be more negligent. Moral hazard, as they say.