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Development And Financing Of Higher Education In India An Analysis

Updated: June 4, 2011 1:30 pm

Education has been recognised as a unique investment in man. It is instrumental in accelerating the process of socio-economic development and cultural regeneration. Higher education, being at the apex of the educational system, is essential for meeting the manpower requirements of the highest caliber in crucial areas of national development. It is also an important contributing factor for ensuring social equity and justice by providing vertical mobility to deprived sections of society by making higher levels of knowledge accessible to them, and in the process, improving the quality of life. The crucial role of higher education, as outlined above, underlines the importance of providing adequate resources for its development.

            The uncomfortable situation for unaided institutions took some of them to the Deemed-to-be-University route to get the degree-granting powers. Since deemed university status does not restrict its growth in terms of setting up its campuses anywhere in the county, it intensified the competition in higher education in the country. Around the same time many state governments, taking advantage of the education being on the Concurrent list of the Constitution, moved towards establishing private universities through legislation.

            By the end of Tenth Plan, the Indian higher education system grew into one of the largest in the world with 378 universities, 18,064 colleges, faculty strength of 4.92 lakh and an estimated enrolment of 140 lakh students. The higher education institutions included 23 central universities, 216 state universities, 110 deemed universities, 11 private universities and 33 institutions of national importance, established through central legislation and another five through state legislations. Pawan Agarwal, analysing primary data for the year 2005-06, summarises the ownership and financing arrangements in various types of higher education institutions in India.

            According to the latest documented data (UGC Annual Report 2007-08) as on March 31, 2008, the number of universities had gone up to 408, including 25 central, 242 state, 103 deemed-to-be universities, five institutions established under state legislation, 33 institutes of national importance and 22,064 colleges in the higher education sector. The number of students in the higher education sector is 123.77 lakh and number of teachers in the sector has increased to 5.22 lakh.

            We thus see the emergence of new types of providers of higher education in the post-1980 period. During this period, the private institutions proliferated, distance education programmes gained wider acceptance, the public universities and colleges started self-financing programmes and foreign institutions started offering programmes, either by themselves or with partnership with Indian institutions, thus leading to a rapid growth of the non-university sector.

            Despite the expansion that had occurred, Eleventh-Plan approach towards higher education recognised the deficiencies in the availability of requisite manpower:

(a)        It specifically recognised that the system was under stress to provide a sufficient volume of skilled human power, which is equipped with the required knowledge and technical skills, to cater to the demands of the globalising economy; and

(b)        Demographic advantage (70 per cent of Indian population being below the age of 35 years) can only be realised if we expand opportunities for our youth on a massive scale and in diverse fields of basic sciences, engineering and technology, healthcare, architecture, management, etc.

Eleventh-Plan approach was, therefore, geared not only towards enhancing Gross Enrolment Ratio (GER) through development of manpower in diverse fields but also bridging the gap: regional, rural/urban, gender and social, which according to the UGC 2004-05, data was quite alarming.

            Eleventh-Plan efforts have been directed to achieve a target of 15 per cent GER by 2011-2012 and to achieve this, enrolment in universities/colleges is to be substantially raised at an annual rate of 8.9 per cent to reach 21 million by 2011-2012. Half of incremental enrollment targeted for higher education is expected to be contributed by private sector, which was found to have contributed substantially during 2001-2006.

            Thus, during the Eleventh Plan, Government of India has decided to term the plan as “Education Plan”. Quantitative expansion in enrolment has been sought to be achieved through: expansion of existing institutions, both government and private; creation of new government-funded universities and colleges; facilitating/removing barriers in creation of new universities and colleges; special programmes for targeted expansion in central universities; support to state universities and colleges and additional assistance to under-funded institutions, implementation of the recommendations of Oversight and Sachar Committee.

            The Eleventh Plan has, in particular, recognised the need for expansion of basic sciences and technical education, and as such the government has moved in the direction of setting up of eight new IITs, seven new IIMs, 10 New NITs, three IISERs, 20 IIITs and two new SPAs. Setting up of 125 polytechnics in districts which do not have any so far. In establishing these institutions, the scope for Public-Private Partnership (PPP) has been proposed to be explored.

            Further, in order to overcome imbalances in technical education, the AICTE has taken certain initiatives. In order to reduce the imbalance between engineering education and polytechnic education, the council has permitted a second shift in an existing polytechnic and also a second shift of polytechnic in an existing engineering institution. Keeping in view the regional imbalance in student intake among various states of the country, the Council has allowed a second shift of engineering in existing colleges, only in those states where the number of seats available in engineering colleges per lakh of population is less than the all-India average. For balanced growth of various streams of education in engineering and technology, the Council has taken a policy decision to allow establishment of new engineering institutions, with at least three conventional branches as a mandatory requirement in states, where the number of seats available in engineering colleges per lakh of population is more than the all-India average (Economic Survey, 2010).

            The higher and technical education in India is being increasingly privatised in multiple ways. On the one hand, the public institutions are resorting to cost-recovery methods to stem out from the financial crisis. On the other, private institutions including foreign education providers are cropping up in large numbers and changing the very face of higher and technical education. Besides conventional system of education, access to education through the open- and distance-learning system has also been envisaged to contribute to the doubling of GER in higher education. Accordingly, open- and distance-learning system has acquired a major contributing role in this direction. The DEC, set up by the IGNOU, coordinates the activities of state open universities and correspondence courses of conventional universities. DEC also, along with AICTE, coordinates technical, management and non-IT (applied technology) courses of distance education. Some of the issues being thrown up by this emerging model of funding that needs careful examination and resolution are those that arise out of:

■          Fees charged from students;

■          Self-financing courses and seats with in the state funded institutions of higher learning;

■          Functioning of Distance Education;

■          Privatisation; and

■          Internationalisation of higher education.

            We provide an assessment of the issues involved with indications for possible resolution:

■          Fees: Proponents of enhancing fees assert that fee levels remain very low compared to the past. Though it is necessary that fees should not be at an absurdly low level, it may not be fair to expect the fees to provide substantial resources to higher education. In fact, it is noted by several researchers that the cost-recovery level through fees is not high anywhere in the world. It has been noted that in many universities, the fee income exceeds the recommendations made by the Punnayya Committee. Any increase in fees beyond affordable levels has regressive effects on the level and composition of enrolments. The state, therefore, must intervene to arrest this craze for fee enhancement. Charging of differential fees based on income level could, however, be explored.

■          Self-financing courses and seats: Another method resorted to by several institutions to raise income, is to create both self-financing seats in the normal courses as well as independent self-financing courses. Though no data are available on the nature and extent of self-financing courses and seats, it is generally believed that this practice is picking up, and even the mainstream universities and colleges are adopting it to generate additional revenues. If the trend continues, a time may come when the higher education system would gradually be restructured to offer only self-financing (market-driven) courses to be financially self-reliant. This would not only lead to truncated growth of higher education but will also weaken our society, as courses that are non-professional are not market-driven. This practice can be arrested only if State provides sufficient funds necessary for infrastructure improvement and incentives for retaining quality teachers in this system.

■          Functioning of Distance Education: Among the various policy initiatives, distance education is an important one to achieve the targeted GER. We, in this country, have developed Open and Distance Education (ODE) system at higher-education level, to supplement its face-to-face conventional education system, with the objective to provide opportunity for education to larger segment of population from marginalised groups to senior citizens, working adults and physically disadvantaged. The system has one national open university, 13 state open universities and one open university in the private sector. In addition to this, there are approximately a little more than 140 dual-mode universities. As per the latest available information on the enrolment of students, the State Open University (SOU) and Directorate of Distance Education of Universities have enrolled approximately one million fresh students in the academic year 2008-09.

            While no one can dispute its contribution to access and equity in higher education at low cost, its quality of education is under question. Distance and open learning, if used as it was originally planned and provided for (in-service students), it serves its purpose, but when it is used as a tool for raising the GER in higher education it leads to deterioration in quality, for reasons which are both the lack of academic and physical infrastructure and other student-support facilities, which are essential for its success. To achieve this, it is essential that the Distance Education Council (DEC), which promotes ODE and coordinates its standards, monitors the system rigoursly otherwise it will continue to produce poor-quality graduates, post graduates and students with research degrees. Such students entering the university/college system for teaching will perpetuate the already deteriorating quality teacher. The reform measure taken in this regard; NET being the minimum essential qualification and other UGC guidelines on PhD, is a step in the right direction, if only it does not oscillate between one step forward and two steps backward—as has been the case for nearly well over two decades.

            Yet another problem noted in the case of distance courses has been its use by the dual-mode universities with the aim of generating revenues for themselves. Such revenues, generated through distance mode, are not always used for the benefit of distant learners but utilised to finance mainstream activities of the university. It accentuates the deterioration in the quality of education delivered to the underprivileged. The quality deterioration is not taking place only in the dual-mode universities; it is true in the case of all other providers of distance education as well. The problem here is akin to that of the university system as a whole, which has developed an inbuilt process of metabolic degeneration. What kind of response would be the most appropriate is still under debate, as it involves trade-off between quantity and quality.

■          Privatisation: A matter of concern is that, unlike in the past, the private institutions of present genre are motivated by profit. The large growth of these institutions, it is argued, represents commercialisation of higher education. These institutions make huge profits. This raises questions of affordability and equity. They do not even reserve seats for the marginalised groups with severe implications of equity. These institutions do not hesitate to admit students with poor academic credentials. These institutions also attempt to be financially efficient, by reducing costs on vital components which adversely affects the quality. The contribution of private sector to research- and advanced-level education is also found to be limited. It is rightly observed, by IG Patel when he says: “Higher education is far too expensive to be made privately profitable, unless it is reserved for the rich or is of very poor quality”.

            Moreover, given the vast expansion needed to achieve the threshold level of GER (15 per cent), it is important that we recognise the limitations of the private sector. Disciplines such as social sciences, physical sciences, chemical sciences, biological sciences, mathematical sciences, astronomical sciences, archaeology, anthropology and languages are unlikely to attract the private sector, even though they are very vital in improving a nation’s competitiveness through fundamental research and also in inculcating democratic, moral and spiritual values. The state, therefore, should take the lead role in establishing institutions in these areas.

            The government on its own part has pledged to raise public expenditure on education to 6 per cent of GDP. It envisages an outlay of about Rs 2.70 lakh crore for education and is four-fold increase over the Tenth-Plan allocation of Rs 0.54 lakh crore at 2006-2007 prices. This reflects the high priority being given to the education sector by the central government and represents a creditable progress towards raising the public spending of the centre and state combined to 6 per cent of GDP. These attempts though laudable, the trends clearly show that the public funding to higher education is not given its due importance as in the earlier decades.

            The intra-sectoral allocation of funds is slowly settling down towards 3 per cent of GDP to primary, 1.5 per cent to secondary and the remaining to higher education. As a result, the growth of public higher education has been stunted and the sector is unable to meet the growing demand. The result of this expenditure will be known only when a comprehensive review is undertaken. We may, however, note here that the funds earmarked for higher and technical education are not commensurate with the required quantative expansion and, hence, the participation of the private sector and emergence of private institutions cannot simply be wished away. In the context of the limited capacity of the public institutions and the existence of differentiated demand, we need to ensure how the two can co-exist. The private sector, with philanthropic notions, needs to be encouraged and others with the sole aim of making quick money need to be eliminated. It is, therefore, imperative to strengthen the regulatory mechanism so that the divisive nature of private education is contained.

■          Internationalisation of higher education: The present-day trends in internationalisation of higher education are not in the traditional sense of sharing experiences, but by way of international trade in educational services. Foreign institutions are entering the country in a big way, taking advantage of differential and excessive demand for higher education. However, majority of these education providers are mediocre, who try to cash in the craze for foreign degrees; quite a few are not accredited in their own countries. While it may not be desirable to close the door for all foreign institutions, we need to evolve such a policy that it attracts only the genuine institutions. Foreign institutions accredited in their homeland should be allowed to offer only those programmes which they offer in their country, and they should be subjected to the same regulations as applicable to domestic providers. Even the fee charged for various programmes should be determined within the regulatory framework prescribed for all institutions of higher learning. Foreign Universities Bill, when it takes shape, may turn out to be the right move in this direction.

            Higher education has generally been recognised as a “public good”, at least as a “quasi-public good”. Consequently, we see that state played a more active role in the financing of higher education for nearly three decades after Independence. In fact, India’s educational policy has been woven around improvement of access (quantative expansion) along with equity and excellence. Early on, it was realised that a strong, self-reliant and modern industrial economy could be built only on the foundations of higher education. This gave rise to state funding. However, owing to several factors including the new economic policies, adopted since the 1990s, state funding to education in general and higher education in particular, has declined in real terms.

            The trends observed in the growth of higher education suggest that in the context of financing of higher education, the educational policy has oscillated between the Constitutional commitment of providing universal elementary education, the secondary education as a preparatory as well as terminal education and higher education. Having regard to these realities, a consensus of a sort seems to have emerged to allocate funds to elementary, secondary, higher and technical education. In this context, if we look into the priority accorded to education and higher education since the 1990s, the priority given to higher and technical education has declined even as their importance in facing the new global challenges is growing. To meet the increasing demand for higher education including technical education, the state has allowed private initiatives; both conventional and distance mode, foreign education providers and, above all, has adopted open and distance learning to enhance access and equity at affordable cost. The system, however, is riddled with the crisis of quality.

            We can, therefore, say that while there is an increasing demand for higher education in the growing Indian economy, unfortunately, the expansion of public-sector higher education has slowed down at a time when it should have been expanded fast to increase the access. Eleventh-Plan initiatives are steps in this direction. The state has, however, not matched its efforts to meet the necessary quantitative expansion and qualitative improvement of higher education. It has allowed non-state players to enter into this field. These players have commercialised the education sector and are operating it for private profit. Thus, the system, as it has evolved, has raised question over the desirability of the present revenue model of higher education funding in the country.

By Dr Sc Sharma

(The writer is Principal (Retd), Ram Lal Anand College, University of Delhi)

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