This paper studies the idea (hypothesis) that increasing government spending on education should improve the quality of the education and access and thus bridge the gap between the private schools and public schools’ performance leading to indifferent choice between the school types and similar outcome. Nationally representative village, schools, and household level data from rural India allow us to study the impact of the spending on the school choice and measure performance gap (if there is any) between the types of schools and their impact on the welfare of the society as a whole. We find that even after the big government spending on education to improve the quality and access, the gap between the public private school’s performance still exits and that lead to the difference in the welfare (outcome) as a whole.