Free schooling financed by government funding dominated our educational scene till the decade of 1980s. This policy was expected to be helpful in providing universal primary education and eradicating mass illiteracy, in addition to being conducive to equity and social justice. The purpose of this article is to critically evaluate the performance of this institutional arrangement, and to see how successful it was in achieving these objectives. We look at the severity and future prognosis of the resource constraint which is one of the major causes of the decline of our government owned school system and examine the state of education in which we find our country after several decades of emphasis on free provision of schooling by the government. Implications of this policy for educational equality and efficient resource allocation have also been studied. The study concludes that the resource constraint that has hampered improvement in the availability and quality of publicly provided education is very severe and hard to overcome. The state of education in the country is far from enviable. We have not been able to make any significant progress in achieving educational equality between regions and genders. There is also evidence to suggest that some misallocation of resources across various levels of education is taking place. Need for rethinking our approach toward providing and financing education is evident.
