Government of Haryana’s landmark “Pay for Success” program to improve students’ foundational learning outcomes

IndusInd Bank, Central Square Foundation (CSF), Language and Learning Foundation and SBI Capital Markets co-own project; Social Finance India leads the design of pay-for-outcomes structure

  • Project to last till March 2022 – will work on improving learning and reading
  • First Development Impact Bond to use CSR budgets in India
  • 14 crore commitment by IndusInd Bank
  • 2.8 crore commitment by SBI Capital Markets (through SBI Foundation)
  • Program to focus on the ability of Grade 1 and 2 students to understand appropriate texts and understand simple sentences, in line with National Foundational Literacy Mission

 

The Haryana Early literacy Outcomes Development Impact Bond (DIB), a CSR funded Development Impact Bond project aimed at improving foundational language learning is underway in Haryana.

The program is led by Haryana School Shiksha Pariyojna Parishad (HSSPP) in partnership with IndusInd Bank and SBI Capital Markets implemented by Language and Learning Foundation. HSSPP has built a robust programme to help strengthen the academic support provided by the state resource personnel (including the BRPs, ABRPs and others to Hindi teachers) to develop a state specific early literacy and learning package to help improve students’ language learning outcomes.

The project is working to bring Language and Learning Foundation’s evidence-based program to 115,000 children in 3,330 schools across 7 districts in Haryana till March 2022, a significant increase over the current successful intervention covering 3,500 students across 175 Schools. The program is a significant step in India’s quest to break the poverty cycle and meet Sustainable Development Goals by 2030.

India today faces an unprecedented learning crisis. While India has made significant gains towards providing access to education, the foundational learning levels are low and declining further. Only a quarter of all children in Grade 3 can read at ‘grade level’ and only 50% of Grade 5 students can read a Grade 2 text (ASER, 2018). India’s performance in early learning outcomes is low, even by the benchmark of other developing countries. For instance, only 28% of Grade 2 children in Tanzania and 37% in Nepal could not read a single word of a short text, 85% of children in Grade 2 in India could not do so (World Development Report, 2018).

Roopa Satish (Country Head – Corporate & Investment Banking, CSR & Sustainability) of IndusInd Bank said: “School education interventions have been identified as an important vertical under our CSR focus area of education. We are happy to be associated with this programme, as we believe that investing in foundational learning for children in government schools will build their confidence and add to their learning experience. Furthermore, we are excited to be associated with this programme, because of its outcome-based approach, given that it is a pioneering initiative, in the CSR sector in India.”

Adwait Hebbar, Head – Corporate Services at IndusInd Bank added: “If gaps in the reading ability of a child are not addressed in the early grades, it could turn into a very large knowledge-gulf in higher classes. This could have a ripple effect on the outcome of the child’s education. Therefore, this programme will strengthen the education journey for over one lakh children.”

Language and Learning Foundation’s Founder Dhir Jhingran said: “Due to poor foundational learning, student learning levels in India flatline in secondary school, this results in a widening learning deficit that significantly reduces the child’s life chances as well as the government’s return on investment in that child’s education. In fact, only 30% of children enrolling in Grade 1 in India graduate from Grade 12.”

This project pilots a new method of utilizing CSR funds for outcomes payment in India. The project conceptualized by the Tata Trust-backed Social Finance India enables CSR entities to pay for outcomes, instead of inputs and activities. The performance or impact guarantee is provided by the investors or philanthropic foundations. In this case, Central Square Foundation plays the role of the guarantor role in the Development Investment Bond (DIB) and will make up to 20 % in payments in case of underachievement of outcomes. The outcomes will be assessed by Educational Initiatives, an independent and specialist evaluator with over 20 years of experience in this area.

Pay for success projects combine non-profit expertise, private funding and rigorous evaluation to transform how government leaders respond to chronic social problems. Typically, investors provide upfront capital to expand effective social services, and government entities pay for all, or part of the program only if it measurably improves the lives of participants. In a Social Impact Bond (SIB), the government pays for the outcomes and in a DIB, philanthropic foundations.

This DIB will pave the way for CSR funds to be used for outcome payment in the impact bond structure. This proposed model retains the advantage of an impact bond, ensuring that donor funds are only used for verifiable outcomes, focusing on flexible and adaptive program implementation, and transferring the delivery/performance risk to the guarantor.

Government of Haryana is putting immense energy, effort and resources to improve learning outcomes of children in all government schools. Prarambhik Bhasha Shikshan Karyakaram (PBSK) is a unique initiative by the State Government of Haryana. This program includes a particular focus on early language literacy learning. The program is going to be expanded to 7 districts and will cover 3,330 schools and 115,000 students of class 1 &2. This expansion is based on learning and performance of students shown in the past 3 years. We understand that other states are planning similar initiatives based on learning from the Haryana program.

“We are confident that this holds the potential to serve a model for several other states in the country to follow in the years to come as a part of the Foundational Literacy Numeracy Mission announced by the government of India.” said Dr Rajneesh Garg, IPS, State Project Director, HSSP

Ashish Dhawan, Founder and Chairman, Central Square Foundation, who is the risk guarantor in the pioneering model said: “We are excited to be part of this model and replicate the learnings across the education sector. To achieve sustainable impact in foundational learning outcomes, there is a need for clear, well defined metrics that can measure competencies and success at every stage, address system binding constraints and have clear accountability and independent monitoring. This particular DIB covers all of the above.”

“We have brought learnings from our networks in the US, UK, Israel and The Netherlands and designed the Pay for Success initiative that will help us transform the lives of hundreds of thousands of children and set them on path to prosperity,” said Shantanu Ghosh, CEO, Social Finance India, the non-profit that supported the design and financing for the Haryana initiative “We will also be developing new, more cost-effective ways to scale our programs keeping sustainability and innovation at the heart of all design structures .”

“Expanding Language and Learning Foundation’s program is momentous for Haryana and for the Pay for Success field,” said Vikram Gandhi, Founder of Asha Impact and Board Member, Social Finance India. “The whole system is designed based on outcomes and hence innovation has been at the heart of devising outcome-based learning systems for the sudden lockdown in India since March. In the Haryana administration, schoolteachers quickly collaborated and had online classes running. “

“With this Development Impact Bond, we hope to lead and facilitate the movement of $2.5 billion of annual CSR spends in India towards outcome payments and overtime change the key metric in social projects from cost per beneficiary to cost per outcome.” said Sourabh Anand who designed the model at Social Finance India.

 

About Social Finance India

Social Finance India is part of the Social Finance Global Network (spread across UK, US, The Netherlands and Israel) The network focuses its effort on the sustainable development goals including poverty alleviation, health and wellbeing, education, water and sanitation, economic growth and sustainable communities.

 

About the consortium

  • CSR partner (Outcome Payor) – IndusInd Bank & SBI Capital Markets (through SBI Foundation)
  • Risk Guarantor – Central Square Foundation
  • Service Provider – Language and Learning Foundation
  • Project Evaluator – Educational Initiatives

 

Factoids of the project

  • Reading fluency among grade 2 children was extremely low – the oral fluency was 8 words per minute
  • Only 3 of the 16 schools demonstrated independent reading in the classroom as opposed to chorus reading;
  • 45% of instructional time was spent on mechanical learning processes, with only 21% of time on active learning;
  • Most of the oral activities were lesson-centered, relying on questions and answers, but lacking deeper comprehension level strategies; and,

Copying words/letters from the textbook or blackboard was the primary writing strategy in the classroom, lacking evidence of comprehension or ability.