In harsh economic times, public attention is often focused on the short-term effects of cost-cutting, job losses and the drying up of investment. But such emphasis can obscure the bigger picture, leading to deeper damage to a country than the immediate effects of the crisis.

The education sector is one that requires both a long-term vision and short-term answers. In India, the state has spent about 3% of GDP on education for the past 30 years. While a correlation between economic growth and investment in education is the subject of vigorous debate, there is little doubt that a country needs to provide a ready workforce to consume the employment opportunities that a growing economy provides. When economic growth is lacking, the challenge intensifies; with fewer resources, it becomes harder to equip people with the education and skills they need. Perhaps now is the right time for India’s leadership to rethink its approach to education.

Quality education is still out of the reach of many Indians, despite the country’s commitment to provide universal education under the Right to Education act. Private education companies such as Educomp Solutions have found a sizeable gap between demand for education and the state’s ability to provide it, and as many as 30% of children in junior schools are going to private schools instead of government schools. Yet long-standing government policy resists private sector involvement in education.

And while access to early-years education is vital, the economic downturn has thrown into sharp focus the need to provide not only access, but also appropriate education for students moving through the higher echelons of the system. Employability is becoming a growing challenge as old business models disintegrate and the global thrust moves towards more skills-based, vocational expertise. Today’s curriculum must respond to the changes that the new world order imposes on the market, or we will be left with a huge pool of educated, but unemployable candidates who find – through no fault of their own – that their skills no longer have a market.

India must transform its education system so that it focuses on outcomes. It must invest heavily in skill-based learning, ensuring people emerge from education with abilities that meet the needs of industry and the jobs market they are entering. In some cases, this means a shift away from the learning that tends to be emphasized in an education system that prizes a degree above other qualifications.

The complexity of India’s education challenge would seem to call for greater involvement of private sector capital and expertise. The private education company I manage is only one of many entrepreneurial businesses that stand ready to help the country bridge its skills gap. A more liberal government policy on private involvement in education could well help India answer many of its current problems.

With a general election due in May 2014, now might be a good time for political leaders to consider lifting the current restrictions, embracing partnerships between the private and public sectors, and allowing the energy in the private sector to permeate through the system. Students are ready for change, and the business environment demands it.

The decisions that are made on education policy in the short term could help secure the long-term future of a billion young Indians.

Author: Shantanu Prakash is Chairman and Managing Director of Educomp Solutions.

Image: Children pray during a morning assembly at a school in the Ralegan Siddhi village, south-east of Mumbai, 17 June 2011. REUTERS/Danish Siddiqu.