Now that the Left support is out of the way, the United Progressive Alliance (UPA) government should go full throttle with reforms in the education sector. The government should show similar political will as it did in pushing the nuclear deal. Three policy decisions should be taken immediately: first, allow profit educational institutions; second, restructure the regulatory mechanism, and third; allow foreign universities to start campuses in India. These reforms are necessary to create more number of good educational institutes in the country.
If we compare India with developed countries, we are already way behind in the number of universities. In Japan, for instance, there are about 10 times more universities for about 10 times less population than ours. About 75% of them are private. As of now in India, only about 7% of our youth go for higher education. If this figure goes up by another 5%, we will face a severe shortage of institutes for higher learning. The government would be unable to meet this demand.
In India, many of the colleges of higher learning in the present university system fall short of standards. Students spend most of their time chilling outside the classrooms. Often the academic discipline inculcated in a school system is lost in the university campuses. As a result, there is a growing trend of students opting for BBA (bachelor’s in business administration) in private business schools after 12th grade, instead of going for regular undergraduate programmes in government universities.
The underserved higher education market has also led to a proliferation of dubious schools. The only way to weed them out is to crowd them out by facilitating the creation of better institutes even if it means allowing foreign universities and for-profit institutes to start operations here. This will also force the existing players to elevate their standards.
We have seen this in other sectors such as manufacturing. With the coming of foreign players, Indian companies which were complacent with limited competition in the protected market suddenly were forced to improve their systems and processes for survival. In any case, foreign institutes will in no way be a threat to our economy or culture as some politicians make it out to be. Rather, by developing our human resource and also by creating new knowledge, good educational institutions give much more to society than they take from it. It could also to some extent contain the present outflow of about $4 billion (Rs18,760 crore) that is spent by our students for better education abroad. But, putting restrictions on them like what they should teach, how much fees they should charge, the students they should select or quotas for some castes would be a retrograde step. This will deter many good universities from setting up campuses here.
Regulation is needed but it should not be the kind of quota and inspection raj as it is now. It facilitates the creation of small-scale edu-preneur who has to spend a great deal of time and resources in negotiating bureaucratic hurdles. The regulator’s job should be to redress grievances of students and parents. It should also be empowered to book schools that give false advertisement which has now become a major problem across the country.
Similarly, allowing for-profit institutes will facilitate large scale capital flow into this sector. They can also raise money from different sources such as the stock market or equity funds. This will also enable edu-preneurs to make money in the right way.
lUnder present circumstances, where only not-for-profit trusts and societies are allowed to run educational institutes, it is leading to generation of black money and bad governance. Since there exists a profit motive in most cases, the main promoters have to devise ways to siphon off money and hire a director, not necessarily a good administrator, but who can keep under wraps their illegal activities. The mindset of some political leaders that profit motives and service to the society are mutually exclusive is itself reactionary. If for-profit companies are allowed to run schools, we will see corporate houses enter this field in a big way. Education will be delivered in a much more professional way.
Reforms in education, besides giving more choices to students, will also help improve the working conditions and pay of faculty as more money will flow into this sector. As economic reforms of the nineties helped create more employment opportunities, reforms in education will help our human resource become more employable.
Premchand Palety is director of Centre for Forecasting and Research (C fore) in New Delhi, from where he keeps a close eye on India’s business schools.