The fact that the CABE committee has not given a target date implies that they want their recommendations to be acted upon immediately. I also suggest that a bold policy framework for promoting private investment in education should be announced and implemented at once. It should be positive and stimulating and provide for an accreditation system that will be cooperative and helpful in ensuring standards and equity. A large programme of investment in about 10000 colleges (one third of the system), perhaps with World Bank Aid and a Consortium of U.S. Colleges including community colleges is called for to upgrade the Higher Education system at its base to balance the agreements already envisaged at high end with 10 major universities in USA and for Agricultural Research & Education. Such a programme will enhance the quality and relevance of education in every part of the country and provide expertise and intellectual and moral leadership for transforming the base of the society and would supplement the forces of globalisation even while correcting some of its inequities and make India a truly developed society. It should be possible to arrive at a broad political consensus for the above strategy and programme.
FINANCING HIGHER & TECHNICAL EDUCATION IN INDIA
The large availability of highly educated and motivated manpower
was an important factor contributing to the phenomenal success of India's IT
software industry. There are many, like the recent McKinsey Report, who warn
that the present growth rate cannot be maintained unless the supply of such
manpower is accelerated. This is true of all sectors of the economy; higher
educated manpower would provide both expertise and needed intellectual and moral
leadership.
The neglect of Higher Education in the past is responsible for the relative
backwardness in India of several regions and sectors of activity. The latest
and perhaps one of the best to document the inadequacies of our Higher and Technical
Education system is the report of CABE committee on financing of Higher &
Technical Education presented to the CABE in June 2005. The committee's chairman
was the Member in Charge of Education in the Planning Commission and include
three Ministers of Education from States, several vice chancellors & education
experts and DG, CII and has therefore special credibility. The Report of the
committee draws special attention (page 22) to the ill-effects of past underspending
(per student cost declined by 30% between 1990-91 and 2002-2003, resulting in
faculty deficiencies, infrastructure inadequacies, poor support for research
and declining scholarships). Apart from the deleterious consequences on quality
& equity, even growth is inadequate in that the Higher Education system
covers only 10% of relevant age group (15-24) whereas the report is of the view
that at least a minimum of 20% should be covered (compared to over to 40% in
many developed and developing countries).
Kudos to the committee for highlighting all this and calling for raising the
current centre & state govts outlay on higher & technical education
from the present 0.5% of GDP (2003-2004) to 1.5% of GDP (target date not specified)
i.e. from around 12500 crores per annum in 2003-2004 to around 38000 crores
or more. Even this will be inadequate, as capital investment needed in infrastructures
do not seem to be adequately provided for in these estimates. Since the committee
was asked to recommend a fair share of GDP that should go to Higher & Technical
Education out of targeted 6% annual Government outlay on all Education, the
committee's recommendation of 1.5% for Higher Education is contingent upon central
and state governments raising their outlays to 6% from the present 4% (2003-2004).
This target of 6% of GDP for Education was first recommended
by Kothari commission in 1966 which had accepted the then Planning Commission
projection of economic growth from 1966 to 1986 at 6% annum. All of us know
the actual growth was only half of that. In 1986 the National Policy on Education
reiterated 6% of GDP for education as the goal without clarifying whether this
was government outlay or it also included private contribution to education
(Kothari commission had included private contribution also). Subsequent to 1986
all political parties have accepted 6% of GDP from govt funds as the necessary
annual outlay on Education. Some of them have included this in their election
manifestos.
When despite all this political consensus the actual outlay from government
funds has not exceeded 4% over such a long period, surely there must be a structural
problem or constraint. Since 1990s we have committed ourselves nationally and
internationally to limit our fiscal and budgetary deficits and we take pride
in bringing down these deficits. The tax base is narrow, much tax is avoided,
much income is undeclared and there are obvious limits to how much can be provided
for education, as security internal and external and several other sectors may
need large funds. Economic growth & buoyancy in tax revenues do help but
there are limits to taxation and therefore the Committee of CABE is unrealistic
in recommending - "State funding of Higher Education out of tax and non-tax
revenues will remain the best and the only sustainable way of financing higher
education. This has both theoretical and empirical advantages. To increase the
revenues of Government so that it increase its allocations to higher education,
one may have to think of additional general and special taxes for higher education
rather than looking at user charges like student fees." (pages 50-51 CABE
committee report).
What makes this recommendation even more unrealistic is the fact that the committee
assumes that 1.5% GDP (25%) of annual outlay can be earmarked out of 6% projected
outlay for Education. This profoundly underestimates the needs of the secondary
sector. Another report on universalisation of secondary education submitted
to CABE at the same meeting, rightly projects the need of the elementary education
at 4%, secondary at 2.5% and Higher at 1.5% which is possible only when the
government outlay reaches 8% of GDP. If the outlay remains at 6% of GDP (a difficult
goal in any case) the share of Elementary would be 3%, of secondary 2% and Higher
1%.
My recommendation is therefore that all political parties must arrive at a consensus
in national interest to raise the non-government contribution in all sectors
of education to as much as feasible so that over all we reach 9% of GDP as national
outlay on Education with 6% from Government and 3% from non-government sector.
When I talk of such contribution from private sector, I do not include in this
expenses of transport, uniform, books and coaching classes. I include only institutional
expenditure and contribution towards the same. I consider 6% from govt. outlay
and 3% from non-govt sources more realistic. In higher education this means
1% GDP from Govt. and .5% from private. In 2003-2004 prices this means 25000
crores from government and 12500 crores from non-government in terms of annual
outlay. In addition there could be need for substantial capital outlays from
government and non-government sources. A few comments on the "debunking"
of non-govt contribution by CABE committee would be in order (though they do
recommend experimental & innovative efforts).
(a) Cost recovery. The committee feels that
the ceiling should be 20% of the costs. But where the courses are relevant and
are of good quality and lead to good jobs, students will be willing to pay 100%
of the costs or even more. We need not fix a ceiling. A college or a university
will have both market oriented and need based courses. The extent of cost recovery
will vary from institution to institution and on mix of courses.
(b) Educational Loans. The committee seems to be against educational
loans on grounds of equity. But if the loans are provided on the basis of recommendations
of the educational institutions, (who should be given a quota for aiding poor
students) this objection can be met. Recovery can be ensured through Tax Authorities
by following the suggestion made by EPSI and others through a PAN number which
will continue with the students after graduation.
(c) Industry & Philanthropic contributions. The committee
feels only those institutions which get govt funding get these contributions.
It also says that voluntary donations and contributions by private corporate
sector is an important feature of advanced countries and our corporate sector
is yet to learn this basic truth. But the past & present need not be replicated
in the future; our corporate governance is learning fast and could become more
socially oriented. They will realize wealth creation and corporate prosperity
is better served by unconditional and wide distribution of contributions rather
than funding of "family or corporate foundations" as has been the
habit in the past.
(d) Private Investment in Higher & Technical Education.
It is in regard to this that the committee report is most negative and most
unrealistic. It declares - "A detailed regulatory framework has to be developed
that would allow only genuinely interested private sector that has philanthrophy
and education and not profit as the main consideration to enter higher education
sector. Tendencies to open profit seeking private institutions need to be curbed
altogether, lest higher education be subject to vulgar forms of commercialization.
At the same time, philanthrophy in education which has rapidly declined to insignificant
levels during the last two decades, needs to be encouraged by government through
appropriate fiscal incentives. On the whole the overall growth of private sector
in education cannot but be limited." (page 50). I think we should strongly
disagree with this view and the mindset underlying the same. In fact the committee
itself has stated at page 40 - "Currently private self-financing colleges
in engineering and management education outnumber public institutions by several
times. In absolute numbers and also as a proportion of the total government
colleges turn out to be negligible. About 85% of engineering colleges in India
are self-financing. In Andhra Pradesh there were 95 self financing private engineering
colleges compared to only 11 government colleges. Similarly there were 303 self
financing medical colleges compared to 25 government colleges. In fact the system
of higher education in India is more privatized than in most developed countries.
The casualty is not just equity, which is well known but also quality of education."I
may add that the fastest growth in secondary education has been in private self
financing schools and also in pre-primary and primary English medium schools.
The reason for growth and private investment in private professional
colleges and other private self financing schools is that parents and students
are willing to pay. Cash flow in these educational institutions is extremely
good. As one person put it "In hotels, we pay after eating food, but in
education we pay even before we enter (and we don't know what we will get)."
There is in other words effective demand backed up by cash. But barriers to
entry and restriction of supply have led to severe shortages of quality places
resulting in black market and corrupt practices. The blame for this has ultimately
to be borne by government which has failed to provide adequate opportunities
even for meritorious students either through its own institutions or by encouraging
private institutions.
This is not to deny that there are several deficiencies in terms of quality
and equity in private institutions. These deficiencies in public institutions
are even worse. To offer low cost low quality education is as great a cheating
as high cost exploitation of students in the private sector.
ACCREDITATION & SELF REGULATION
A large number of accreditation bodies of experienced educationists each handling
a limited number of both public and private institutions and working cooperatively
and with educational institutions can contribute to the continuing improvement
of academic standards, quality, relevance and equity. These accreditation bodies
may be franchised by AICTE/UGC etc and can replace the largely irrelevant and
ineffective and confusing inspectorate system that has been operating and has
gained considerable insight into the problems, which insight they can provide
to the accreditation agencies and coordinate, promote and regulate their work.
There is nothing more inequitable than denial of opportunities to meritorious
students to pursue their desired course of studies. Special provisions for the
backward and corrections for historical injustices are necessary but social
justice cannot be provided on the basis of individual injustice. Both have to
be tackled together and only a positive promotional approach and large scale
enhancement of opportunities and removal of shortages of quality places can
meet this situation.
The Hon'ble Supreme Court has reiterated the fundamental right of citizens to
follow chosen professions; including the right to teach and to establish institutions
for the purpose with reasonable restrictions for ensuring quality and equity.
The Court has ruled that there can be no profiteering but a reasonable surplus
may be made. 10 to 15% annually is considered reasonable surplus. These are
equivalent to post-tax profits, after provision for depreciation on all other
costs. The Delhi Government has permitted 10% school fees for creating a Development
Fund. These are important guidelines which the private sector must accept and
enforce in letter and spirit to create confidence in the public mind. These
limits are quite reasonable. The private sector in education must also realise
that education is a process and not a product and that final examination results
or job offers or profits (which may be fortutious) alone do not indicate or
guarantee good education. They must give up proprietorship attitudes, hire and
fire practices, cost cutting and other dubious smart measures, allow academic
autonomy and promote good educational climate.
Foreign Investment
Under GATS, National Treatment is an important principle. If we offer Higher
Education as a service under GATS, we should be ready to accept universities
from other WTO members to establish their branches in India so long as they
conform to national laws for private institutes. We have not reached this stage
as yet. Presently, bi-lateral agreements may be a better procedure to keep ourselves
abreast of latest developments abroad and create a natural demand for our education
by raising quality and relevance.
The recent agreement with USA which provides for 10 major universities in USA
to collaborate with a number of institutions in India to upgrade research and
learning is a good example. Of even greater relevance is the agreement for a
"Ever-Green Revolution" under which a number of U.S. Institutions
will collaborate with ICAR and Agricultural Universities and research centers.
These are 'high-end" collaborations, such as we had for IIMs and IITs in
the past. However, what we need for system improvement is a large "low-end
collaborative arrangement". One can visualize an agreement with World Bank
credit or soft loan support and a consortium of U.S. Colleges including community
colleges to upgrade let us say 10000 colleges in this country (roughly two thirds
of the system) in terms of infrastructure, academic offerings, community interaction,
promotion of small enterprises and educational and health services, training
and extension facilities.
Foreign Universities in India
A debatable question is with reference to a number of universities operating
in India via the FDI route. The committee suggests that foreign universities
that enter India with a view to exploiting the situation here and essentially
to raise resources need to be prevented. But another view could be that they
enable many Indian students to obtain foreign degrees or dual degrees at much
cheaper costs than going abroad to acquire degrees. The real answer to malpractice
is to go after malpractices/ and not to stop practice as such. Because there
are quacks, we do not abolish the Medical Profession. Certainly more regulatory
work is needed in this area.
Industry and User Collaboration
Universities & colleges must alter their regulations to allow for active
participation of industry and others using Higher Education Manpower in all
aspects of academic planning, delivery of curriculum and evaluation. Industry
& user agencies on their part must open their facilities for training, extension
& research in collaboration with Higher Education institutions in the vicinity
and also provide part-time faculty making their expertise and experience available
to Higher Education Institutions.
Summing Up
Rapid economic growth brings with it many social conflicts and challenges as
well as opportunities. Higher Education on an adequate scale and depth can be
a powerful instrument for meeting these challenges and making the best of the
opportunities. The present world wide upward growth of the economy may last
upto 1915 or 1920. (Upward phase of 'Kondratiev wave' commencing from about
1990) and if by then we build a dynamic and quality oriented Higher Education
system, we would be able to meet all the challenges with confidence. There is
hardly any time to be lost and strong political leadership is needed urgently
to move ahead at the required pace.