Quoting reports that have pointed out that basic reading levels have shown a marked decline, she observed that it was critical to provide children with the right kind of environment to make them learn.
Addressing a gathering after handing over All Children Reading Grand Challenge Awards to five innovators, Powell heaped praises on the Government of India for taking "several positive steps" for providing basic education to every child through the Right to Education Act.
"According to the latest reports, today over 96.6 per cent of children in India ages 6 to 14 years old are enrolled in school. However, quality of education remains a concern and a major challenge across the entire education system," she said.
Citing recent international assessments and national surveys that have concluded that learning levels in India are very low at the primary level, the Ambassador said if the gap in reading ability is not addressed they would continue to lag behind in all subjects as they move through the system.
"The future economic potential of millions of children depends on their ability to learn to read, and read effectively, during their primary school years," she said.
The 2011 Annual Status of Education Report in India revealed that basic reading skills have shown a marked decline in many states across North India.
Powell said USAID fundamentally transformed its approach to education to help address this crisis in quality and that it was not going to measure its success by the number of children in school but by the effectiveness they demonstrate in the classroom as measured by child outcomes.
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As part of the new education strategy, she said, USAID has developed early grade reading assessments designed to help teachers understand the specific needs of their students and their classrooms.
These tools are already making a difference on the ground, changing the way entire nations approach education. By focusing on literacy and measuring impact, USAID's new strategy will help improve the reading skills of 100 million children by 2015, she said.
Five of the 32 awardees of this competition are implementing activities in India.