Policy matters

Perils of privatisation

Print edition : August 17, 2018

The police disperse students of Panjab University, Chandigarh, who were protesting against a fee hike, on April 11, 2017. Photo: AKHILESH KUMAR

The government’s push towards greater privatisation of higher education will further marginalise the weaker sections of society and undo the gains achieved through social justice.

Two years ago, while presenting the Union Budget for 2016-17 in Parliament, Union Finance Minister Arun Jaitley made two significant references to higher education. The first was that “an enabling regulatory architecture” will be provided to 10 public and 10 private institutions to emerge as world-class teaching and research institutions. The second was his announcement of a proposal to set up a Higher Education Financing Agency (HEFA) with an initial capital base of Rs.1,000 crore that would “leverage funds from the market and supplement them with donations and CSR [corporate social responsibility] funds” to finance infrastructure development in higher education institutions.

Being part of a Budget speech, these announcements were clear signs that the National Democratic Alliance government led by Prime Minister Narendra Modi was keen on pushing the agenda of privatisation and commercialisation of higher education. Even in the group of 20 institutions that were to be accorded privileged status, 50 per cent was “reserved” for private universities, even though public universities still account for over four-fifths of all university enrolments and held most top positions in any ranking.

A slew of policy actions and announcements in recent times indicate that a big push towards privatisation of the university system has now well and truly begun. The push will drastically change the face of Indian higher education, but not necessarily for the better. The process of privatisation of higher education is not a new development.

Since the early 1990s, the liberal economic policy framework betrayed a strong tendency towards privatisation.

The institutional mix has changed as the number of private higher education institutions has increased tremendously. Simultaneously, the extent and proportion of public funding to finance public and private institutions of higher education has fallen.

Increasing cost

The combination of stagnation in public expenditure on higher education as a proportion of the gross domestic product and expansion of enrolment has resulted in increases in the cost of higher education. Enrolment has seen significant growth as higher education degrees are increasingly considered to be essential for securing a future and/or achieving upward social mobility.

According to the All India Survey on Higher Education (AISHE), enrolment in higher education institutions has grown more than sixfold since 1991 to reach a level of around 35 million in 2015-16, of which 6.7 million was in university departments.

The gross enrolment ratio (GER), which is the total enrolment as a ratio of the population in the relevant age group (18-23 years), has increased from less than 5 per cent in the early 1990s to nearly 25 per cent in 2016-17. Even in 2005-06, it was only around 11 per cent, which means that the last decade has seen one of the greatest expansion in enrolment.

This expansion has also altered the social composition of students, with a noticeable increase in the proportion of women and students from the Scheduled Castes (S.C.), the Scheduled Tribes (S.T.) and Other Backward Classes (OBCs).

In undergraduate education, which accounts for the major part of higher education enrolment, private institutions had already come to hold a dominant position. However, the public university system has also expanded with the creation of new institutions and a rise in the enrolment levels in existing ones. Several new universities and technological institutions were established in the Central sector and there was a massive increase in enrolment in Central institutions (54 per cent) after the introduction of reservation for OBCs during the term of the first United Progressive Alliance government.

Changing social composition

Public universities also led the process of change in the social composition of students. This was the result of reservations and the cost of education being kept lower when compared with private institutions.

In private universities and private deemed universities, the S.C./S.T./OBC student population accounted for only 27 per cent of the total enrolment, but it was more than 50 per cent in public universities. Similarly, women constitute just a third of the enrolment in private universities as compared with 45 per cent in public institutions. It was the public university system that enabled this despite continuous policy pressure for reducing reliance on government grants. This positive situation is bound to change if the Central government’s plans for greater privatisation are implemented.

HEFA was established as a collaborative institution between the Government of India and Canara Bank and registered as a company on May 31, 2017. It then secured a licence from the Reserve Bank of India to operate as a non-banking finance company. By the end of the year, over Rs.2,000 crore worth of projects of six institutions (five IITs and one NIT) had been approved and the Ministry for Human Resource Development (MHRD) is now pushing Central universities to seek HEFA financing.

In the system of government grants, the entire amount is transferred to public educational institutions. However, under the HEFA financing scheme, institutions have to take loans to build their infrastructure. Government grants can only be used by higher education institutions to pay the interest on the loan. To repay the principal the institutions will be required to generate their own resources, which would only be possible by charging higher fees or by commercialising research undertaken in them.

Interestingly, in the last few months the University Grants Commission (UGC) and the MHRD have also introduced a new system of making transfer of grants conditional on the Central universities signing tripartite memoranda of understanding (MoUs) with them under which the universities have to commit themselves to achieving “performance targets” that include raising fees and user charges.

The other component of the Finance Minister’s 2016 announcement, that is, creation of a separate regulatory architecture for chosen institutions, has become a reality in two parts. The MHRD announced recently that six institutions have been granted the status of being “Institutions of Eminence”, which attracted controversy for more than one reason. This was based on an expert committee’s assessment of applications invited under a UGC scheme announced in September 2017, which had envisaged 10 public and 10 private institutions being accorded that status.

In February 2018 the UGC’s “Graded Autonomy” Regulations were notified and in March 2018, 60 institutions, including five Central universities, 21 State universities, 24 deemed universities and two private universities, were granted greater “autonomy’ under the Regulations.

The “Institutions of Eminence” and “Graded Autonomy” schemes have a common feature—they grant greater “autonomy” to the selected institutions or freedom from regulations to generate and use resources from non-public sources (that is, sources other than government grants), including the fees charged to students. In other words, autonomy here means that regulations restricting higher education institutions from being ruled by private and commercial interests are being eased.

Paradoxically, while “autonomy” may reduce government regulation and control of private institutions, things seem to be moving in the opposite direction for public institutions. A few months after the Finance Minister’s announcement, in May 2016, new UGC Regulations were announced for the award of MPhil and PhD degrees. The imposition of these regulations on the universities resulted in drastic cuts in admissions to research programmes and measures amounting to micro-management of universities by the UGC and the MHRD.

The tripartite MoUs that Central universities have been forced to sign will lead to greater monitoring of these universities by the government. The decision to abolish the UGC and create a new Higher Education Commission of India (HECI) is also a move in the same direction.

On one hand, the removal of the UGC from the process of disbursal of government grants threatens universities with the prospect of being subjected to even greater government conditionalities attached to grants than they face now.

On the other hand, the problems associated with the government’s control over even supposedly autonomous regulators such as the UGC will increase because the HECI composition gives it the appearance of a government department.

There is also no change in the process of appointment of Vice Chancellors laid down in the Acts of Central and State public universities, which will make them de facto political appointments; appointments of several university officers are also controlled through this process.

Similarly, there is no move to cede effective government control over the nomination of several members of the administrative bodies of public universities such as the Executive Councils.

The idea of university autonomy is based on the concept of self-governance and absence of control over their decision-making by outside forces, authorities or bodies.

In reality, government control over the public universities has not lessened. University autonomy in reality has been extremely circumscribed; its erosion has been more rapid under the current regime. The past four years of the NDA government have also seen tremendous unrest in several universities. Government control is being used to push for increased privatisation of public universities, which have to depend less and less on government funds now.

The consequences

The enormous increase in the numbers of students entering and emerging from higher education institutions has not been matched by commensurate job opportunities. The mushrooming of private institutions has led to a fall in the quality of education. The expansion of the education system has, no doubt, enabled more students to access higher education but they are unable to find the careers that justify the cost and time spent on education because jobs are available only to a privileged few from select institutions.

The gulf between students’ aspirations and the ability of the higher education system to satisfy these aspirations will only widen unless the government drops its emphasis on privatisation.

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