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End The Licence Raj

The government must give freer rein to market forces to increase the supply of quality higher education…

Even as the mercury soars, in Delhi University the rush for college admissions begins. Each year the number of applicants increases, the cut-off marks rise higher, and more students turn away disappointed. Less visible but equally consequential is the exodus of children of affluent families to foreign universities. Indians spend more than $4 billion abroad annually on higher education, a huge amount for a developing country. Eastern states like Bihar and Bengal witness the migration of students to Delhi for general courses and to Karnataka, Tamil Nadu and Madhya Pradesh for engineering and medical courses. All this is symptomatic of the vast gulf in our country between the demand and supply of quality higher education. And as any HR manager will tell you, our universities and colleges are also failing in one of their basic objectives of producing a sufficient number of high-quality, employable candidates.

Public institutes: stuck in a quagmire
With government spending on higher education languishing at an abysmal 0.37 per cent of GDP, government-funded universities and colleges suffer due to inadequate funding. The government baulks at the idea of hiking fees, believing this will deny access to students from unprivileged backgrounds. But then quality higher education is expensive all over the world.
Granted lifetime tenure, the faculty at many government institutes has little incentive to perform. The syllabus is out of sync with the needs of the job market. Hence the median quality of education at government universities and colleges has plunged very low.

Private institutes: choking under state control
The licence raj may have ended within industry but it continues to thrive in higher education. An entrepreneur who wants to set up a higher-education institute finds the entry barriers to be high. All colleges have to get affiliated to a university, a process that is fraught with difficulties.
Only those who can pull strings within the government and the bureaucracy find the going easy. Hence, you have powerful politicians heading trusts that run hundreds of institutions.
In India higher education institutes can’t be run as for-profit enterprises. How will then corporates invest the crores required if they can’t earn legitimate returns on their investments?
Even in the running of private institutes, the promoter has to deal with state interference in matters such as how much fee can be charged, the procedure for admission, and the curriculum that can be taught. In regulating private institutes, the underlying premise of the government, the judiciary and the education bureaucracy (UGC and the various councils that regulate professional education) is one of suspicion. Private institutes lack the necessary freedom so necessary for developing centres of excellence.
In the matter of allowing foreign universities into India, the government has not been proactive and welcoming. If reputed foreign institutes came into the country, Indians would be able to get degrees from them at a fraction of the cost they now incur abroad.

The way forward
Clearly, the state must relax its vice-like grip on higher education. It must cut down on its role as a player and focus on being a referee, ensuring that minimum standards are maintained and malpractices curbed. Norms for entry and operation must be eased. As more players come into the field, competition will weed out the poor-quality institutes. At present even the execrable ones are money spinners due to inadequate supply.
To meet its goal of providing equal opportunities to all, the government should offer scholarships and loans at subsidised rates of interest to meritorious but disadvantaged students. In Britain, the stiff fee charged from foreign students goes into subsidising the education of local students. By making our universities and colleges more vibrant (say, by striking alliances with foreign colleges and universities), India too could emerge as an education hub for the region. This would, to some extent, ameliorate the resource crunch in higher education.
Kiran Karnik, former head of Nasscom, has suggested setting up of Special Education Zones where higher education institutes, including foreign ones, can be set up free of the bureaucratic rules that stymie growth in the country. This idea is worth pursuing.
From just doing low-end outsourced work, India has now emerged as a hub for high-end research and development in software, pharma, high-tech engineering and biotech. Will we be able to come up with adequate supply of technical and scientific manpower required to man the jobs that are coming our way, and at reasonable wages? Unless we demonstrate urgency in overhauling our higher education system, we could well miss the bus.

An icon tumbles
Rajat Gupta exemplifies how unbridled greed can cause the downfall of one in whose accomplishments Indians once took pride
The Bible says: “What does it profit a man if he gains the whole world, yet suffers the loss of his own soul.” Adherents to this sentiment appear to be in short supply these days. The fall from grace of Rajat Gupta, former managing director of the world’s most eminent consultancy firm, Mckinsey, exemplifies how unbridled greed can cause the downfall of one whose achievements once inspired a generation.
According to a recent story by Bloomberg, Gupta was doing very well monetarily as the head of Mckinsey, yet when he began moving among hedge fund managers, he asked himself: “If these guys can make so much money, why can’t I?” That led him to associate with dubious characters, and indulge in acts like leaking confidential information (about the companies on whose boards he served) to discredited hedge fund manager Rajaratnam. That has led to his current travails vis-à-vis the Securities and Exchange Commission, the US securities regulator.
In life you find that competence and character are two distinct attributes. A person may be brilliant, rich and powerful, but to automatically assume that he also possesses character is a fallacy. On the other hand, you at times find the highest standards of probity in one who occupies a rather humble station in life.

Avoiding temptation
Gupta’s motives can be understood but not condoned. The lure of earning easy lucre can sometimes be overwhelming. Earning an honest farthing is slow and painstaking. The honest plodder appears to be on the slow coach while those who have shed their scruples seem to jet ahead. Yet, when retribution arrives, all their riches count for nothing. Therefore, if not a sense of morality, then at least the fear of being manacled and taken away like a common criminal and the thought of spending years in lockup should keep one on the straight and narrow path.
We are lucky to be born in India in an age when the economy is on steroids. Find out what abilities you possess, see what societal needs these abilities can fulfil, and get to work with manic zeal. Hard work, enterprise and a modicum of ingenuity will take a young man places in this day and age.
Alongside material growth, nurture your intellectual and spiritual wellsprings. The people you associate with will have a bearing on your thoughts, beliefs and conduct. Try to find a life partner who is more interested in living, learning, loving and growing (as Stephen Covey says) rather than only in accumulating material goods. Dissociate yourself from friends and acquaintances who speak only of their latest acquisitions. Envy is hard to control, so do not let it rear its ugly head. Use books, art or spirituality as inoculation against it.
Wealth is important, but once you have earned it, respect and recognition become equally, if not more, crucial. At a function to felicitate my father when he was retiring from service, a colleague said: “In this day, to be able to retire from your job without the taint of a scandal is high achievement.” I would paraphrase this to say that to avoid any act that would bring one ignominy and regret in later life is high wisdom.