Coaching centres are a sign of broken-window economics. See how China fixed it all overnight

Summary

The video script discusses various advisories and the tragic incident of three young people drowning in a Delhi basement library. It highlights the rapid growth and issues within India's coaching industry, emphasizing unsafe conditions and significant profits despite regulatory challenges. The script critiques the broken education system and compares it to China's strict measures against tutoring businesses. It calls for reforms to address the exploitation in the coaching sector, which thrives on a flawed education system, drawing parallels with other systemic issues like unreliable power supply.

Takeaways

• ⚠️ Avoid dangerous behaviors: Don't practice nunchucks in crowded rooms, eat choli before road trips, or take calls near pools.
• 🔍 Recent incident: Three young people drowned in a basement library of a UPSC coaching center in Delhi.
• 👮 Investigation: Delhi High Court handed over the investigation to CBI, and several basement coaching centers have been sealed.
• 🚨 Arrests: Some owners and senior management members of these coaching centers have been arrested.
• 💼 Coaching industry criticism: Questions arise about the safety and hygiene of coaching centers, despite high fees.
• 🏢 Profit paradox: Education institutions can't legally make a profit, but coaching centers operate profitably.
• 📈 Growing industry: The coaching business is booming, with significant increases in GST collections.
• 📊 Marketing power: Coaching centers spend heavily on advertising, often more than state governments.
• 🌟 Star teachers: Teachers in the coaching industry are marketed as superstars, a stark contrast to modestly paid school teachers.
• 💸 Economic critique: The coaching industry is part of a larger broken economic system, similar to issues in electricity supply and air quality management.

Q & A

What advice is given in the 30-second lesson at the beginning of the transcript?

The advice includes: never practice nunchucks in a crowded room, never eat choli before a road trip, always take your shirt off before you iron it, don't take a call near a swimming pool, and remember that saving is not investing.

What incident prompted the investigation mentioned in the script?

The incident involved the death by drowning of three young people in the basement library of the R IAS Study Circle in Old Rajender Nagar, Delhi, which is a hub for UPSC coaching.

What actions have been taken by the Delhi government and the Delhi High Court in response to the incident?

The Delhi High Court handed over the investigation to the CBI, and the Delhi government sealed multiple coaching center basements and announced plans to pass new regulations. Some owners and senior management members were also arrested.

How has the Delhi police's action been criticized in the transcript?

The Delhi police were criticized for arresting the owner and driver of an SUV that happened to drive across a flooded street, allegedly causing the basement to flood. This action was seen as absurd and a misdirection of blame.

What issue does the transcript highlight about the education system and coaching centers in India?

The transcript highlights the issue of coaching centers operating in unsafe and unhygienic conditions, despite charging high fees. It also criticizes the fact that while profit from education is legally restricted, coaching businesses are thriving and making substantial profits.

How has the GST collection from coaching centers changed over the years?

The GST collected from coaching centers at the rate of 18% was 2,240 crores in 2019-20 and has risen to 5,517 crores in five years. It is estimated to reach 15,000 crores by 2029.

What does the transcript say about the marketing budgets of coaching centers?

The transcript notes that coaching centers spend substantial amounts on advertising, often more than state governments and other significant advertisers, such as Baba Ramdev.

What is the 'broken window economics' or 'broken window fallacy' described in the transcript?

The 'broken window economics' refers to the idea that while fixing a broken window generates economic activity, it overlooks the opportunity cost of what else could have been done with that money. In this analogy, fixing the window diverts funds from potentially more productive uses, leading to a false sense of economic benefit.

How does the broken education system contribute to the booming coaching business in India?

The broken education system drives students to rely on coaching centers for better preparation and success in competitive exams. This demand has led to a booming coaching industry, which thrives on the inadequacies of the regular education system.

What actions did Xi Jinping take to address the coaching and tutoring industry in China?

Xi Jinping demolished the entire coaching and tutoring industry overnight in 2021, banning for-profit tutoring, IPO listings, share sales, mergers, acquisitions, and foreign collaborations. He also placed strict limits on online learning and made coaching for children under six illegal.