Demand and Supply of Education

Educational needs and aspirations of a population measured in monetary terms constitute demand. If these needs and aspirations are felt, experienced and expressed by parents, their wards or consumers in general, then it is known as ‘private demand’. If the needs and aspirations for education are felt, experienced and expressed by a state, or an organised establishment of society, then it is known as ‘social demand’. Demand is also associated with the capacity to pay for the expected services.

A person willing to pay for a good or service is said to make an ‘effective demand’. In this sense, a wish is not a demand. While ‘needs’ are of current interest/relevance, ‘demand’ relates to the future needs estimated as required over a period of time. Technical know-how and skills needed for meeting the future needs constitute the ‘social demand’ for manpower. Private and social demand for education may be divergent. The state may want all its people to be literate and may be willing to spend for this. But illiterate population may not realise the benefits of education.

The experience of last five decades shows that all parents do not send their children to schools. This is particularly true in rural areas even though the government has opened schools in many such areas. In such a situation, the state strives to achieve higher enrolment in schools by adopting both motivative and coercive policies. While provision of mid-day meals, supply of free books/uniforms, etc. come under the former, the latter includes implementing laws on ‘compulsory schooling’. The supply of education can be viewed both in physical as well as in financial terms. Establishment of adequate number/type of educational facilities which is conveniently accessible to all sections of the society relates to the physical dimension of supply. The resources needed for the establishment of such a supply, measured in terms of money, constitutes the financial dimension of supply.