View of a Corporate Honocho on Education

coll-finder2Without the contribution of the private sector India may not have scaled such a height in the education sector. Earlier schools, colleges and universities were run by public charity minded private people. Today most of them want to open an education institution to mint millions of rupees. No problem if they charge high, give good quality education, pay the staff well and impact the student’s lives. Alas! these are not happening. But only money gets poured into their coffers. The country needs to put an end into this menace and reform the education system. The education tribunal should speed up the hearings and bring justice to the exploited students and parents. The quality assessment should be rigorous and the government should weed out the inferior ones quickly.

Rahul Bajaj writes in The Times of India (30 July 2009)

The demand for quality education is intense and students and parents are going to great lengths to access it. The problems are on the supply
side. With Kapil Sibal as the new human resources development minister, perhaps winds of change will blow.

I need to free education from the licence-permit raj. Let colleges set their own fees and salaries, curriculum and exams and expansion plans. The current system obstructs the ethical and promotes the unethical through over-regulation. We also need to substantially increase vocational training. Industry has to step forward to create a market for the vocationally trained. However, the government’s rigid labour policy is hindering this by discouraging employment-creation in the organised sector.

Our higher education system consists of four kinds of institutions: centrally run institutions like IITs, IIMs, etc; state-run universities; grant colleges run by private institutions; and unaided institutions. Unaided institutions are largely affiliated to universities or are deemed universities or private universities. The majority of students in the country are now in unaided private institutions. This fact needs to be emphasised.

The crux of the matter is that the government system, including aided colleges, has so much subsidy that it can only cater to a minority. IIT Bombay has a budget of Rs 120 crore a year, of which Rs 100 crore comes from the central government. With 5,000 students, this means a subsidy of Rs 2 lakh per student per year. This is not sustainable and is the key reason why the government system has not expanded. The private sector has to step in, and it has.

Unaided, self-financing institutions are of two types: those for conventional courses and for professional courses. Conventional course fees are set by the university and are usually low, from Rs 8,000 to Rs 22,000 per student per year. This leads to them being manned by ill-paid, temporary teachers. Many institutions attach a fictional add-on course to hike fees. Numerous colleges charge Rs 35,000 to 60,000 per year.

In professional courses, fees are higher. They are sanctioned by state-level Shikshan Shulk Samitis based on cost plus 7 per cent, but the core cost is of teachers and this can be fudged. So is the case with capital investment. However, if one runs the system ethically, one lands up with a loss. Thus, the current system of regulation seems to have largely bred unethical and corrupt behaviour.

In deemed or private universities, fees are high. Whether quality is good is open to doubt. But deemed universities have to go through a much better process of vetting than private universities, since they have to be accredited by the National Assessment and Accreditation Council (NAAC) and have a track record.

While i support entry of foreign universities, subject to some regulations, fixing the domestic sector, to me, is more important. For fees of less than Rs 75,000 per year, the fee and salary structure should be left to the discretion of institutions. With this, ethical institutions would have surpluses to expand and, within a short time of, say, 3-5 years, unethical institutions would either fold up or change. I am sure the results would be as positive and as dramatic as have occurred in industry after 1991 with the abandoning of the control mentality. We should let foreign universities come in but they are going to address only our peripheral needs, not our basic needs. We seem to have a choice between government-run low-cost, low-quality institutions or private high-cost and, hopefully, high-quality institutions. I believe a third way has to be found.

And it exists. The US’s best universities are private universities, like Harvard or MIT. Their fees constitute less than 20 per cent of their income, quite like our government institutions. Here the comparison ends since they earn the balance, from endowments from their alumni and faculty-generated projects and technologies. We won’t reach this in one step. But it should be our long-term objective. Another source is society itself. Tagore, writing a century ago, felt we had survived as a nation for so long because the core processes were taken care of by society, not governments. If we were to devote even a small percentage of our profits/incomes say, 1 per cent to supporting education, much would be achieved.

Industry is the primary end-user of products of education. The government should use people from industry to evaluate proposals and institutions. Every NAAC and All India Council for Technical Education committee should have people from industry.

As in corporate governance, the key is transparency. If data on cut-offs, percentage of students passing, number of permanent faculty, number of placements, fees etc is easily accessible to students and parents, they can make informed judgements. Education is too important to be held hostage to outmoded thinking. The time has come to reform it, based on a progressive vision, a clear understanding of ground realities and the courage to cut through the nettles it is enveloped in.


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