Results-based financing for higher education reforms in Madhya Pradesh, India

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Students in Madyha Pradesh, India.
Students in Madyha Pradesh, India.

A couple of months ago, I visited Chandra Shekhar Azad College in Sehore, about an hour’s drive from Bhopal, the capital of the state of Madhya Pradesh, India. It was a short visit, but long enough to see that college students the world over have similar dreams and see higher education as a way to realize them.

Divya, an undergraduate student in her fourth semester, told me she was at this college because it was the only one in the district that offered a biotechnology major. Despite belonging to one of India’s historically disadvantaged scheduled castes, she was paying the full tuition. “Lekin value zyada hain,” she said, explaining that she saw potential in it, and would persevere.

Divya, however, is by no means a typical student in a Madhya Pradesh college. In fact, scheduled caste students are woefully under-represented; less than 7 percent of the relevant age group among those belonging to the scheduled castes make it to higher education – which is half the overall rate.

It is also unusual for Divya, as a girl, to be pursuing higher education; for every 100 boys, there are only 56 girls in the state’s colleges and universities. Increasing access to higher education for girls and scheduled castes (and scheduled tribes) is an urgent priority for the state, as is improving the quality of education.

How is Madhya Pradesh going to deliver better results in higher education? The state has over 1,300 colleges and universities, which serve 1.6 million students. That’s a lot of students—ten percent of India’s entire population of students in higher education are enrolled in Madhya Pradesh.

The state’s name Madhya Pradesh quite literally means Central Province, and that isn’t just geographically speaking. With the fourth-lowest per capita GDP of all Indian states ($728), it’s pretty clear that what happens in vast and populous state is central to India’s development.

The state has chosen a results-based approach to design an education project. Financing is provided based on achieving a set of pre-agreed results—depending on how effectively colleges and universities use grants to improve access to scholarships, boost faculty skills, develop curricula, raise governance and accountability, and conduct monitoring and evaluation.

Another key activity will be setting up centers of excellence across the state in various disciplines, making the most efficient use of finite resources. 

The World Bank is assisting Madhya Pradesh in the use of this new ‘results-based financing’ approach. The concept has been used successfully with World Bank support in Pakistan and Bangladesh, and is in demand globally as governments are increasingly interested in focusing on health and education results.

In essence, the Madhya Pradesh Higher Education Quality Improvement Project will help a lot more students from disadvantaged sections of society to get into college and stay the course, so to speak. Importantly, it will also help them get an education that is relevant and up-to-date, and that will prepare them for jobs when they graduate.

The benefits to Madhya Pradesh are expected to be high, and working with low-income states is central to the World Bank Group’s country partnership strategy in India. As an approach, results-based financing could well become as central to development financing as Madhya Pradesh is central to India. But these are early days. This project is one to watch as it progresses towards its first year of results. There will indeed be a lot to learn from how it goes.

Meanwhile, Divya and Yogendra, another student who was happy to stop and chat, want to do their Masters in Biotechnology. It is really heartening that the system is now trying to keep pace with their aspirations.

For more information, please visit our website and follow  @wbg_education on Twitter.
Watch this video about results-based financing in education in India.  


Kavita Watsa

Senior Operations Officer

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