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This paper contends that presence of multiple educational systems - particularly in developing countries - creates conditions and infrastructural divisions that allow for systematic, unequal and access of varying quality to digital learning and literacy. This process creates differentiated capabilities which in turn affect gains or pay-offs over time for the beneficiaries (students) of those systems. Ultimately, this can widen the gap between the rich and the poor and create a limited capabilities loop as technological dependence increases in economies. Therefore, mere spread of digital technologies or ICTs (for example cell phone or the Internet) cannot be seen as a sign of development but rather how well can an individual use it to attain subjective utility and freedom. Using Amartya Sen's capabilities approach to development, preliminary results from a case study [work in progress] on Pakistan's educational system is presented followed by development of Inverted Funnel Paradigm. The paradigm models pay-offs/gains over time for digital learning and literacy continuum. The project has implications for future thinking, research and policy making when it comes to ICTs in schooling systems.