The provision of high-quality education and health care to all of the population is considered a core element of public policy in most countries. In India, the government is active in both education and health but the private sector also plays an important role, notably for heath, and to a lesser extent in education. At present, the quality and quantity of the outputs from education, and also form public health care, are holding back the process of economic development. Steps are being taken to draw more children into primary education and the paper considers ways to keep children in school. It also considers institutional changes that may help to improve the performance of the educational system and so boost human capital formation. This working Paper relates to the 2007 Economic Survey of India (www.oecd.org/eco/surveys/india).