India has built a world‑class mass democracy, yet mass prosperity remains elusive, largely because of a fraught relationship with entrepreneurship—especially when it concerns public goods such as education and health. In this opinion piece, columnist Manish Sabharwal argues that the nation must adopt an “idealism without illusion” stance for private education investment, anchored on five strategic imperatives.

Supply – The Foundation of Opportunity

Princeton economist Avinash Dixit famously observed that life is at best “second‑best,” a reminder that the most expensive school is still a school. India’s reality is stark: only half of the nation’s children attend government schools, while the other half rely on private institutions that already serve over 120 million learners. Expanding the number and variety of schools—through private capital, innovative business models, and competitive pricing—is the only realistic way to reconcile cost, quality, and scale.

Biodiversity – Innovation Through Competition

Goodhart’s Law warns that once a metric becomes a target, it loses its usefulness. India’s focus on brick‑and‑mortar school infrastructure, rather than on “software” aspects such as pedagogy, teacher development, and governance, has stalled progress. Drawing on Friedrich Hayek’s discovery principle, the article stresses that educational quality cannot be mandated; it must emerge from a vibrant ecosystem of diverse, independent ventures experimenting with curricula, delivery modes, and assessment methods.

Meritocracy – Removing Barriers to Capital

Current regulations prescribe land size, building norms, and legal structures that make school creation capital‑intensive. Consequently, most institutions are founded by politicians or land‑owners, not by teachers or ed‑tech entrepreneurs. This adverse selection discourages merit‑driven founders who need venture capital and professional management. A meritocratic framework would lower entry barriers, allowing talent‑rich entrepreneurs to raise equity and scale impact.

Excellence – Harnessing AI and Elite Programs

Artificial intelligence is flattening the median while amplifying the top performers, shifting the classic 80/20 power law toward a 90/10 distribution. Nations aspiring to global leadership must complement mass education with gifted‑student programs that are inherently expensive and risk‑laden. Private institutions, with longer investment horizons and higher risk tolerance, are uniquely positioned to deliver such elite pathways.

Honesty – Transparent Legal Structures

Sabharwal cites an informal survey suggesting that 75 % of capacity across K‑12, engineering, and business education is legally classified as non‑profit while operating on a profit motive. This mislabelling confuses parents, hampers regulators, and deprives the state of legitimate tax revenue. Honest, profit‑oriented legal structures would attract sophisticated investors who bring superior governance, technology, and accountability, ultimately curbing education‑related inflation.

In sum, embracing an “idealism without illusion” mindset—anchored on supply, biodiversity, meritocracy, excellence, and honesty—offers India a pragmatic roadmap to transform its education system from a fragmented patchwork into a world‑class engine of human capital development.