FROM THE RINGSIDE
Restoring India’s missing middle
N K Singh
Posted online: Sunday, November 04, 2007 at 0000 hrs Print Email
N K Singh
The prime minister had recently observed that there were issues beyond the nuclear deal that deserve priority attention. Those relating to infrastructure were intensively reviewed this week. But there are many others, like education and climate change, which deserve equal attention.
On education, particularly, there is recognition across the political spectrum on the need for basic reforms. A recent World Bank report entitled ‘To Make India an Innovation-Driven Society’ highlighted measures to reap the benefits of a demographic dividend.
Not surprisingly these relate to improved skill inculcation based on changing demand, enhanced Private Public Partnership, increased fiscal and managerial autonomy to universities and colleges, enforcement of quality and testing standards to sustain quality and joint training programmes with the industry.
The urgency on education was also recognised by the HRD Minister, who with some anguish described higher education in India as a sick child at a recent conference of Vice Chancellors. Bhakul Dholakia, soon after his retirement as director of the prestigious IIM, Ahmedabad, felt that excessive governmental control and interference, absence of autonomy and flexibility in the functioning of the management board crippled even centres of excellence.
Clearly there is a need for basic changes, and while multiple action is needed both by the centre and the states some things are obvious:
First, how to get more private investment into education? While the profit motive, as against altruism and the social obligation of the state, which must remain significant, excluding profitability all together cannot incentivise fresh investments. This is particularly true for higher and technical education and creating centres of excellence.
While there is need to maintain and adhere to the prescribed academic bench marks through a rigorous process of accreditation to some extent market forces does act as an impartial arbitrator. Implementing legitimate considerations of equity does not make the economics of investment in education morally repugnant. Students from lesser accepted academic institutions are likely to receive poorer jobs and salaries and this generates enough pressure to improve and sustain the educational standards. The recommendation of the National Knowledge Commission for an independent regulator in higher education to work at arms length with the ministry deserves early consideration.
Second the need for greater autonomy in terms of recruitments, decision making by the management board, redefining accountability pattern determination of fees and supplementary revenue streams needs a basic rethink.
The social obligations emanating from various legislations and other guidelines do need to be enforced but micro-managing decisions which suffocate fresh and pragmatic thinking is hardly the way forward.
Third, the issue of growing competition in institutions of higher learning cannot any longer be brushed under the carpet. The total number of Indian students seeking admissions in the United States and Europe and the remittances being made in multiple ways to sustain their education is staggering sum of money. Many institutions of higher learning like INSEAD and Wharton have established footprints in Singapore and others are in the process of doing so. It is worrisome that the Regulation of Foreign Universities Entry & Operation (Maintenance of Quality & Prevention of Commercialisation) Bill 2007, even in its emasculated form, continues to languish without parliamentary approval. It is only the more affluent who can afford to go to Harvard, Stanford or even Singapore and it is ironic that exaggerated fears, unfounded nationalism, and under the garb of maintaining quality an excessively protectionist approach has been pursued.
Fourth, the need to balance quality with equity has many unresolved issues. For instance quota versus a merit-order system or market determined fees versus protecting the poor through concessional arrangements need to be judiciously harmonised.
Teacher training, faculty recruitment and faculty retention constitute daunting challenges. High quality faculty would increasingly seek a market-determined salary and this has an inevitable pass-through in student fees and consequential liabilities. This prima facie may militate against the principle of equity. Aggressive marketing of merit scholarships at concessional and subsidised finance from banking institutions need deeper penetration. More generous private endowments and foundations as part of corporate social responsibility for the meritorious but poor students can resolve part of the dilemma.
India has a missing middle in its development strategy in terms of labour intensive employment generating activity as well adequate high quality technical personnel. Supply-side inelasticity represents the failure of an HRD policy to leverage its large surplus manpower.
We cannot afford to fritter our main comparative factor advantage.