PRIVATELY FUNDED HIGHER EDUCATION: ISSUES AND POLICY PRESCRIPTIONS (By-Niraj Kumar Seth)
PRIVATELY
FUNDED HIGHER EDUCATION: ISSUES AND POLICY PRESCRIPTIONS
Authored By-Niraj Kumar Seth
“Education is the most powerful
weapon which you can use to change the world”
-Nelson Mandela
Abstract
The
essay attempts to explore key issues in higher education being funded by
private or corporate sector and suggest policy measures for the two most
important ones. The author believes that privatization is a reality in Indian
higher education sector, as nearly 78% of colleges and 39% of universities are
privately managed, which cannot be undone. A better strategy is to be prepared
for the inevitable, by devising policies that aim to harness private funding in
the right direction. Regulations on standards, infrastructure, quality, equity,
affordability and accessibility should be devised and strongly implemented.
Government should play the role of a facilitator and not the gatekeeper.
Keywords:
Education, Policy, Corporate, Privatization, University
Introduction
India
is well placed to reap its huge demographic dividend in the form of a bulge in
its workforce in its youth. We need to be prepared to capitalize this once in a
lifetime opportunity for any nation. Higher education shall play the most
significant role in this endeavor, as India needs highly skilled workforce,
ready for the most disruptive 21st century technologies. However, according to
the 2018-19 AISHE report, Gross Enrollment Ratio(‘GER’) in higher education in
India was merely 26.3% for 18-23 years of age group in 2019. The figure for
Scheduled castes and scheduled tribes was 23% and 17.2% respectively, below the
national average.[1]
GER in developed countries is around 50-80%. The National Education
Policy(‘NEP’) 2020 targets at 50% GER with access, quality, equity,
affordability and accountability as its pillars to address poor literacy rates
and high dropouts. India’s public expenditure on education was only 3.4% of GDP
in 2020, while it’s around 5-6% in developed countries.[2]
Also, India spends a meagre 0.7% of its GDP as investment in research and
development(‘R&D) as compared to 4.3% of GDP by Israel.[3]
NEP 2020 aims to increase public expenditure on education and R&D to 6% and
2% of GDP respectively.[4]
Sustainable Development Goals(‘SDG’) 4 of the United Nations to which India too
has signed requires countries to ensure equal access for all to affordable and
quality technical, vocational and tertiary education, including universities by
2030.[5]
Therefore, there is an urgent need for India to create capacity and improve
quality, accessibility and affordability in higher education, otherwise the
demographic dividend would become a demographic burden. India needs to increase
its spending on higher education and utilize all possible means possible to
that end, including the untapped financial resources with private and corporate
sector.
Arguments In Support Of Private/Corporate Funding In
Higher Education
Critics
say that government’s record in provisioning of higher education has been
dismal and that there is a huge gap between demand and supply. They allege that
government has abdicated its responsibility to provide tertiary education to
all those who desire and deserve and therefore there is a need to rope in
corporate funding into higher education sector. Private sector participation,
they believe, shall increase the possibilities for individual choices in the
type and quality of higher education and improve its accessibility to the
masses. They claim that 'education services’ falls under the definition of
‘Service’ as laid down under Article 3 of General Agreement on Trade in
Services(‘GATS’) under the aegis of World Trade Organization(‘WTO’) and
therefore education is now a tradable service like banking or insurance.[6]
Educationist believe that the focus of the government should be primarily on
school education, so as to ensure no child is out of school. Since higher
education involves imparting of skills and close engagement with industry,
private sector should be allowed to complement public effort in a big way. Such
private initiatives in higher education have made the US and the UK the higher
education magnet of the world, drawing the best and brightest from all around
the world. Some critics believe accessibility is more important than
affordability and quality in higher education. Costs and quality, they say, can
be taken care of later, as higher education becomes near universal with
public-private partnership. Private financing has the potential to bring down
financial burden of government and fiscal deficit and tap the hitherto untapped
Corporate Social Responsibilities(‘CSR’) funds of large corporate. Association
of industry with academics shall also make education more job-ready to meet the
demands of industry. This shall also give impetus to vocational education and
skill training.
Key Issues In Private/Corporate Funding In Higher
Education (400)
Privatization
is not the remedy for all illnesses that plague the higher education sector of
India. They too have their own flaws and set of challenges. The objective is
not to deter private participation in higher education but to recognize key
issues and design adequate policies to address them. It’s alleged that academic
freedom is not part of the culture of private HEIs, as they are mostly financed
by businessmen, who are dependent on government to protect their business
interest. This makes faculty members more vulnerable, as academics depend on
policies of donors. Rampant malpractices in the form of illegal charges to
allocate seats from management quotas and collection of high capitation fees by
private run medical HEIs are the most serious issues. Private HEIs are obsessed
with marks and academic results and pay less attention on sports, all round
development and most importantly, R&D. As experience of the US and Korea
tell us, likely cost of private education is much higher than public education.
The most important reason for this cost differential may have to do with profit
objective of private HEIs. They work like business enterprises, aiming to make
money through provisioning of higher education, which is regarded as a ‘public
good’, even today by public HEIs. Academic content and management of institutions
are totally in hands of business communities. Students, teachers and other
employees often complain of exploitation in the form of unexplained fees
components, meagre salaries to teachers, poor service conditions,
misrepresentation in prospectus, etc. Often
low cost HEIs with poor infrastructure turn out to be fly-by-night operators,
leaving students stranded. The IIPM case is the perfect example of such
fraudulent private educational initiatives, based on false promises and high
promotional spending.[7]
Even today the defrauded students are seeking justice against IIPM and its
owners who robbed them of lakhs in the name of ‘higher education’. Moreover,
elite private HEIs are unaffordable and create sharp class, caste and gender
divide in the education system. Not just private HEIs exacerbate inequalities
in society but also lack diversity, in terms of gender, economic strata, and
academic streams. Most of these private HEIs start with inadequate
infrastructure and with availability of space per students and other facilities
far lower than public HEIs. Teacher-pupil ratio in private HEIs is also higher
than public HEIs and most often they employ retired, part time and under
qualified teachers, who end up getting underpaid.
Recommendations - Addressing Inequity And Lack Of
Diversity
The
two most serious issues related to private funding of higher education
institutions are firstly, lack of diversity and equitable access and secondly,
poor infrastructure and capacity. Issues relating inequity has four dimension -
gender, geographical, ethnic and economic. Lack of diversity is mainly due to
admission based strictly on test scores, which is advantageous for students who
can afford private tuitions and come from educated families. Another aspect of
diversity is related to absence of private HEIs in liberal arts and science
education. One policy solution could be mandating the private HEIs to admit a
percentage (say 25%) of students from disadvantaged groups
from
their neighborhood for free or concessional education, in line with similar
mandate by Right to Education Act, 2009 for private schools. Secondly, CSR
funding of large corporates should be harnessed to provide economic support and
scholarships to students as an incentive for private HEIs to admit more girl
students and students from poor economic strata. CSR funding could also be
utilized for setting up private HEIs in remote and backward regions to address
geographical equity issues. Hostel facilities or sponsored accommodation could
also be one solution. Thirdly, Non-governmental organizations (‘NGO’) should be
roped in to set up liberal arts and science colleges in towns and villages.
Local industries too should be encouraged to participate in such endeavors
through tax incentives. Fourthly, private HEIs should be mandated to constitute
an ‘Equity and Diversity committee’ to recommend measures to improve equity and
diversity in the HEI. Fifthly, open universities should be set up and distance
learning programs should be encouraged to provide quality education, accessible
at least cost to all. Private HEIs should be provided financial support in the
form of interest subvention and concessional loans to absorb such technologies
that reduce costs related to physical infrastructure. A combination of online and
offline mode of imparting instructions can achieve both the objectives, namely,
cost reduction and improved access to students from remote regions, girls and
those from economically disadvantaged sections. However, extant digital divide
must be addressed for this to work effectively.
Recommendations - Addressing Poor Infrastructure And
Capacity
The
second key issue is related to poor infrastructure and capacity, which is
mainly due to inadequate financial capacity of private HEIs. Policies aimed at bringing
more corporate funding, both in the form of new HEIs as well as up-gradation of
existing HEIs should be adopted. Firstly, Schedule 7 of companies Act, 2013
allows companies to spend their CSR funding on education and it should be
harnessed to add capacity and infrastructure to existing HEIs.[8]
Secondly, Social audits should mandatorily be carried out to assess the
adequacy of infrastructure and also the pay and service conditions of teachers.
Thirdly, graduate tax could be one of the ways to raise funds and sustain the
recurring infrastructure needs of private HEIs. Alumni should be encouraged to
contribute financially. Thirdly, special education zones should be built, as
recommended by the NEP 2020, where corporatized entities can set up their own HEIs
with least government intervention and world class infrastructure. Students too
shall be facilitated with scholarships and
concessional
education loans for this to be effective. Fourthly, possibilities of foreign
collaboration and 100% Foreign Direct Investment(‘FDI’) should be explored to
bring in foreign funds in higher education in India. Fifthly, regulations
should be framed to ensure that all private HEIs operate with adequate physical
infrastructure such as labs, libraries, hostels, etc. and that teachers are
paid regularly and decently. Teacher-pupil ratio should also be kept low and
HEIs must have infrastructure to harness digital technology in education.
Sixthly, establishment of a national database of academic qualifications in
electronic form shall be extremely beneficial to HEIs, teachers and students
alike. Teachers form the core of infrastructure in higher education and must be
paid adequately.
Conclusion
Neither
complete privatization nor absolute government control is a solution. We need
to learn from experience of developed countries and most of them have a mix of
public and private HEIs. Private participation is a reality now, as 77.8%
colleges and 385 out of 993 universities in India are privately managed.[9]
Hence, a middle path, which encourages private participation under strong
regulatory supervision by government seems to be the most plausible solution.
References
1. Newspaper articles -
Kiran
Bhatty & Christophe Jaffrelot, What Ashoka University controversy says about
the failures of private institutions, Indianexpress, Apr 2, 2021.
Lakshmi
Priya, How Does the National Education Policy Accelerate the Privatisation
of Higher Education? EPW, Jul 30, 2020.
Pulapre
Balakrishnan, The Case Against Privatisation of Education, The Hindu,
May 10, 2014.
Privatisation
of Higher Education, Business
Standard, Feb 7, 2017.
Budget
wish list: Allot at least 2% of GDP to R&D,
Financial Express, Feb 1, 2021.
Task
force recommends setting up special educational zones, The Hindu, Dec 1, 2020.
Suresh
Mony, NEP 2020: Increasing GER in higher education, how to make vision a
reality, Hindustan Times, Oct 29, 2020.
2.
Research Papers -
Mahrukh
Mirza & Zaibun Nisa, Privatisation of Higher Education: A Study on
Students’ Perspective,
SSRN (2020).
Jandhyala
B. G. Tilak, The Privatisation of Higher Education, Prospects (1991).
K.
M. Joshi, Indian Higher Education: Some Reflection, Intellectual
Economics (2013).
Sanat Kaul, Higher Education in India: Seizing the
Opportunity, Indian Council for Research on International Economic
Relations (2006).
3.
Reports -
All
India Survey on Higher Education 2018-19,
Department of Higher Education, Ministry of Human Resource Development (2019).
See: https://www.education.gov.in/sites/upload_files/mhrd/files/statistics-new/AISHE%20Final%20Report%202018-19.pdf.
The
17 Goals, Department of Economic and Social Affairs Sustainable Development,
United Nations. See: https://sdgs.un.org/goals.