India's formal education system is failing: Raghuram Rajan

"India's formal education system is failing and government school system is failing - government is not delivering the goods," Rajan said.

India needs to improve in the field of education, he said, adding that the country needs more organisational training in the field of education.

"Here in the United States, superstar teachers are paid more," he said.

Rajan said that India needed to give incentives to its good teachers to raise the level of education across schools and universities.

He was speaking at Pratham gala fundraiser held here at the Meadows Club in the suburb of Rolling Meadows.

Pratham is India's largest non-profit organisation in the field of primary education that has created systemic changes to educate a vast number of children.

The theme of the gala was "Remember the Dream" that asked all supporters to remember the dream of an India where no child will be deprived of quality education.

"I think it's of critical importance. For a long time we have focused on higher education, but in the last decade we have shifted our focus to primary and secondary education. We need every child in school," said Rajan.

"In Indian primary schools.. half of the students are not in class.     Average schools are better in United States and drop out rate is more in India although students are more hungry for education," Rajan said.

Referring to the fact that higher education is the key to one's well being, Rajan, a professor of finance at the University of Chicago's Graduate School of Business, opined, "Education is a leveller, a game changer."

He said China always emphasised education much more than India and as a result its average literacy rate is better than India's.

"Education is a problem not only for India but world over because of increase in free trade, communications, unemployment rates and low skilled jobs," said Rajan.