There is a lot of hope riding on the Aam Aadmi Party, or AAP. Most rational thinkers believe that AAP is a welcome entry to the world of politics. Its anti-corruption, passionate brand of politics is a refreshing change from the status quo. Even if it doesn’t win elections, just its presence in the race forces the others to step up their game. However, some centrists and economic pragmatists wonder if AAP’s do-good approach may cause more damage because of its government-knows-best approach and its tendency to be more socialist.

Here is the key concern broadly articulated:

AAP and Arvind Kejriwal are good honest people who can run a government efficiently. However, on the other hand, they may believe that government itself should be more welfare-driven and be involved in more delivery.

R Jagannathan, Editor of Firstpost, laid out some of these concerns in 2015 and also previously in 2013. The bigger concern is that once AAP initiates a bunch of socialist policies that are delivered by the government, they may run it more efficiently, but what of the next party? Will such a party as the Congress continue to deliver government services as efficiently as AAP and will that lead to more of a downward spiral? Will India go back to the Nehruvian socialist era that started with good initiatives (example, PSUs) but ended up being inefficient and globally uncompetitive?

Given this background, let’s examine what AAP has actually done after coming to power in Delhi. Mardax has a good summary of government actions, achievements and policy changes by AAP. Broadly speaking, most of the initiatives seem like a good mix of pragmatic policy making, efficient execution (for example, infrastructure implementation) and making the government more accountable. However, the most intriguing of these policies that also gives insights into AAP’s capitalist versus socialist philosophy are the proposed amendments to the Delhi School Education (DSE) Act, 1973 and Right of Children to Free and Compulsory Education Act, 2009.

The socialist view on AAP’s amendments

Tarique Anwar from Firstpost has chronicled the opposition to the amendments to the AAP Bill and if you read the excerpts to the opposition, it seems like the AAP is being accused of being a capitalist carpetbagger whose policies will “exploit” the working class.

The first objection is around the amendment to delink private teacher salaries from government teacher salaries:

“The proposed amendment completely takes away the right to pay parity of all the employees of recognised private schools guaranteed by Section 10(1) of the DSE Act, 1973, which mandates that pay and other benefits of the employees of a recognised private school shall not be less than those paid to their counterparts working in government schools.

“On the basis of this provision of the law, all employees of recognised private schools are legally entitled to claim benefits under the Central Pay Commission revised from time to time. If this proposed amendment is passed, no employee would be entitled to claim benefits of pay and emoluments under the Seventh Pay Commission that will come into force with effect from 1 January 2016,” advocate Ashok Agarwal, who is also the president of All-India Parents Association, told Firstpost.

The 42-year-old provision, he said, that was achieved after a long struggle has been taken away by the AAP government in one stroke through the proposed amendment bill. “The people of Delhi voted (Chief Minister) Arvind Kejriwal’s party to power for protection of the workers’ rights and not to snatch them, and that too in the manner it is being done. Even the previous Congress and BJP governments in the state did not ever think of or attempt to take away such a valuable right of equal pay and dignified livelihood,” he said alleging that “this apparently has been done at the behest of the private school managements lobby”.

Reminded that the government argues that it has done so because it has “no intention of infringing on the autonomy of private schools,” Agarwal reacted strongly saying that “You (the government) are state, not a private body. You have a duty to check commercialisation and exploitation”.

The second objection is around fee regulation:

The second controversial bill is Delhi School (Verification of Accounts and Refund of Excess Fee) Bill, 2015 — also known as the Fee Regulation Bill. Introducing it in the 70-member assembly, Sisodia said, “People say that fee of a private school nowadays is more than their salaries, making private schooling for their kids a nightmare. This bill will ensure regulation and accountability.” If a school is found charging extra fee or diverting money, the committee can direct refund of excess fee and ask schools to re-fix its fees. The schools will also have to submit audited financial return along with proposed fee structure for next session. Schools that fail to comply may face jail term or fine.

But Agarwal and others say it gives “absolute powers to unaided recognised private schools to increase fees arbitrarily instead of controlling it” and “loot the hapless parents in whatever way the school managements like”.

“It fails to cater to the mischief of exorbitant and unjustified fee-hike for the following reasons: first, it presupposes that fee-hike by private schools is per se legal and valid unless the same is challenged by a complaint and is set aside by the committee. If we look at the existing acts on private unaided school-free regulation, particularly the Tamil Nadu (Regulation of Collection of Fee) Act, 2009, there is a stipulation of prior approval by the committee before fee-hike and the increased fee, once approved, cannot be further hiked up to three years. But here, the proposed bill has put the entire burden on the complainant.

“Second, this bill suffers from various practical anomalies. The burden has been cast upon the aggrieved parent to move in compliant. This onerous task would make the parent, and ultimately the child, amenable to be subjected to victimisation. Further, once a complaint is made, no time limit has been stipulated for disposal of the same by the committee, making it liable to be reduced to futility by sheer lapse of time. Even after a complaint has been decided, there is enough room for delay as the school can file objections and even after consideration of the same and final decision by the committee, there is a provision of appeal to the director, for disposal of which, no time limit has been stipulated. The school will thus continue to enjoy its free hand at least throughout the process which has enough scope for inordinate delays. It would not be an easy task for any parent to lodge complaints because they need a minimum support of parents of 20 students to 1/5th of that of the total number of students in a class to be able to file a complaint.”

The capitalist view for AAP’s policy

The capitalist and libertarian argument to the socialist attack on AAP’s proposed education amendments could be:

• Delinking private teachers pay from government teachers’ pay: Why should private teachers’ salaries be linked to government teachers’ salaries? By that extension, should government doctor salaries be also linked to private doctor salaries? Should executives who work for BSNL also have their compensation linked to Airtel executives?
• Fee regulation: Why should government regulate private school fees? If there is enough competition, parents could decide to send their children to lower priced schools or free education from government schools. If I want to set up an amazing school for a chosen few with top of the line infrastructure, why should price and fee controls stop me from making my project unviable? Also, AAP’s fee regulation is based on supernormal profits not on price regulation. Isn’t that a better form of regulation than blind price controls?

AAP’s view on the policy changes

Here is the AAP’s policy advisor on the thinking behind the changes:

Atishi Marlena, advisor to the Delhi education minister, says: “A few laws are only on paper, not in reality. As of now, pay parity exists only on paper. Private schools say they need to charge a fee of about Rs 2,500 a month from each student to pay teachers according to the 6th Pay Commission provisions. According to our data, 70 per cent of private schools in Delhi do not charge so much. There are over 1,000 schools in Delhi that charge less than Rs 1,000 a month from each student.”

“Leaving apart the top 20 per cent of schools, private school teachers at the primary level in Delhi are paid an average salary of Rs 5,000 a month,” she added.

Explaining the need for the amendment, Marlena says: “If we strictly impose the current law on pay parity, we will have to close down a large number of private schools in Delhi. That will not be in the interest of teachers and also create an educational crisis. These schools that charge less cater to certain economic strata. We cannot turn a blind eye to corruption and teacher exploitation. We are not removing Section 10 (1) of the DSE Act; instead, we are amending it to put in an enabling provision that says private schools will pay salary to teachers as prescribed by the government.

“The government will set up a committee to look into the accounts of schools. There are two proposals. First is fixing a gross revenue share that a private school will have to spend on salaries. And the second is setting up bands, where salaries will be correlated with the fee charged by a school. The ones that can afford to match the government school pay will continue to do so.”

So, now that you have the socialist view, the capitalist view and the AAP view, what is your opinion on AAP being socialist, capitalist or just pragmatic?