The issues of higher education in India - Source - The Economic Times!

The missing edge: Reforming higher education Fifteen years back a Swedish steel company quoted Rs 30 crore for selling a technology to Steel Authority of India Ltd (SAIL). Indian Institute of Science (IISC), Bangalore and Indian Institute of Technology (IIT) Madras analysed the process and their elementary analysis revealed that the technology was not up to the mark. The next day the price dropped to Rs 15 crore. “Such is the power of higher education,” says MS Ananth, director, IIT Madras. Unfortunately, higher education in India has lost its edge. There is little innovation — thanks to too little investment, ill-devised regulatory framework, and lack of relevance. None of these problems are difficult to fix and at least one step towards all this was taken last week. The government decided to invite suggestions to revamp the All India Council of Technical Education (AICTE). In some ways, AICTE’s approach symbolises many of the wrongs. It is opposed to joint degrees by Indian and Western universities (Mumbai based B-school SP Jain’s tie-up with MIT was turned down). Its criteria to grant recognition to universities have been described as very restrictive. The requirement of 25 acres of land for campuses has made it almost impossible for institutions to start operations in large cities. But at the same time it has given persmision to many universities that operate out of just a few rooms. If you thought AICTE is the long and short of it, think again. There are more than 12 statutory professional councils. The problem is not with the number, but with the fact that most of these organisations are regulators — they look at the quality of inputs. No one measures the quality of institutes. Checking for quality This approach needs to change. Mr. Ananth says, “There is no such thing as control. It is only on paper and gives rise to corruption.” A way out could be by having a body for accreditation rather than control the colleges. This will ensure that students are not cheated on standards. Something on the lines of ABET, an accreditation body in the US, that is a recognised accreditor for college and university programs in applied science, computing, engineering, and technology. The difference between accrediting and regulating is that the former guarantees the quality in institutions already up and running whereas regulators have the power of starting institutions. Some might argue that decentralising power might dilute the quality in education. This problem can be resolved by granting autonomy to each one of the 16,885 colleges operating in India. While accreditation shall evaluate the academic qualifications or standards of an institution, autonomy will make the entities responsible to impart quality education. At the moment, colleges with widely diverging quality levels are affiliated to the same university. “The colleges offering high standards suffer in the bargain as the students from both good and bad colleges receive the same degree,” adds Mr Ananth. The way to weed out the bad would be to let investment flow to those institutes that are delivering high-quality students. Says Nitin Potdar, partner at law firm J Sagar Associates, “We need special education zones not special economic zones.” In the last two years, Potdar has been approached by four big foreign universities looking to start operations in India. Non-transparency and ‘licence raj’ in the system, says Potdar, drove these institutions away. Traditionalists have been vehemently opposing foreign education, fearing it might lead to commodification of knowledge. Worse still, other feel that Western countries will follow their economic model and produce ‘technical clerks’, who in turn will pander to their demands. India doesn’t have a choice, unfortunately. The present expenditure on education by the Centre and states is Rs 91,000 crore. Another Rs 7,000 crore IS collected through education cess (3.32% of GDP). Singapore spends 4% of its GDP on education. Though there is an increase of 150% in central spending on higher education in 2007-08 (at Rs 6,354 crore over Rs 2,550.50 crore this year), the fact remains that India will continue to lag behind its Asian counterparts. Currently India spends 0.5% of its GDP on education. This needs to go up to 1.5% of GDP. Also, Rs 100,000 crore per year is required for Vocational Education & Training. The government isn’t coming up with this amount. Who is afraid of FDI? The suspicion about foreign investment upsets Krishan Khanna, chairman and founder of iWatch, a National Citizens Movement for Transforming India. Pointing towards people walking in the lobby of the posh Hilton Towers in Mumbai, Khanna says, “These folks aren’t affected by the state of higher education in the country as they can afford to pursue foreign education. Until the sector is open to investments, people will have to resign to the sub-standard state of higher education in India. Goddess of learning, Saraswati, will have to be deregulated and unchained, like the Goddess of wealth Lakshmi was in 1991.” Education is perhaps going through the same phase as insurance, print media and real estate a few years ago. After years of opposition, FDI was finally allowed in these sectors. In India, nearly 160,000 students go overseas to pursue higher and technical education. This results in a foreign exchange out flow of about $10 billion per year. “This amount is sufficient to build 40 IIMs or 20 IITs per year! Further rationing of higher education seats allows a few people to corner the market and that leads to a black market and the menace of capitation fees,” adds Khanna. Other countries that have allowed foreign investment have benefited immensely. Dubai, a dwarf compared to India, has already taken steps in this direction. Four years ago, Dubai opened its doors to international training centres, professional centres and HR companies. Dubai Knowledge Village’s (DKV) partners include diverse nationalities such as Australians, Indians, Pakistanis, Iranians, Russians, Belgians, English and Irish. Further, DKV has 100% foreign ownership and tax exemption. Take another instance, Singapore has established itself as a regional hub providing quality education at a much lower cost compared to the US. As a result it has above 66,000 international students representing over 60 nationalities. The presence of 7,000 multinational companies in Singapore offers unique industry networking and employment opportunities. If similar models are thought of in the Indian context, infusion of FDI will ensure Indian colleges leverage the technology, infrastructure and expertise of the foreign schools like Harvard, Wharton, London Business School and INSEAD. Letting in the corporations The next step would be to let the private sector play a greater role. In the global context, India is lagging behind in terms of number of universities it has. While Japan has 4,000 universities for its 127 million people and the US has 3,650 universities for its 301 million, India has only 348 universities for its 1.2 billion people. Since the government has primary and secondary education to fund, the sensible thing to do would to let the corporations take a crack at this opportunity. In Japan, 75% of all higher education institutions are privately held, in India this percentage is around 30%. And most of the successful private educational institutions here have one thing in common — regulatory hurdles they all have managed to overcome. To be fair, some companies have enetered this sector and roughed it out. Vedanta University CEO V Krishnan recalls being questioned on the large piece of land acquired for the university. Authorities thought that 6,000 acres was a huge chunk for this fully residential university. “We made our intent clear that we are not looking for any sops or incentives and that the land has been acquired at more than market rate from the public. Of course there will be delays and regulatory hurdles. But being Indians, we understand the challenges here,” says Krishnan. Vedanta has eight colleges including schools of arts and science, engineering and law colleges, schools for management, medicine, design and architecture, education and communication and has received a generous grant of $1 billion from Anil Agarwal. The university that claims to have research in its DNA will see its first batch graduate in 2009. By 2010, the entire university will be fully operational with a capacity of 100,000 students. Krishnan hopes that companies like Infosys, Tatas take active part in this direction too. “What I have seen is anything big and good you start others follow. The demand for higher education, research is very high,” he adds. Apart from the recent entrant Vedanta University, the veterans like ICFAI and Manipal University are grappling with the same regulatory issues. Manipal University, a deemed university that started with a medical college in 1953, has 24 colleges now. Not only will it set up four more campuses in India with an initial investment of around Rs 100-130 crore, it has plans of going global. The fact that the small town of Manipal has become an education hub for domestic and international students is a testimony to the university’s success. Manipal University vice-chancellor Dr R P Warrier says, “Regulation has to be good and it has to facilitate the growth of higher education rather than restrict it.” Likewise, the 24-year old ICFAI has 19 business schools, six engineering colleges with an annual student intake of 5,000. According to ICFAI chief academic officer Dr V Pandu Ranga Rao, there are two basic challenges the University faces. “Firstly, multiplicity of regulators makes things very difficult and delayed. Secondly, an even bigger problem is the shortage of quality faculty,” he says. There is a clear mismatch between the demand for skills and the supply to the market from the universities. Darlie Koshy, director, National Institute of Design (NID), supports the competency study group adopted by Chile. Under this, the budget is divided among education sectors in the order of importance of the industry it is relevant to. Of the 440 million youth currently employed, around 58% are in the service sector, 28% are in the manufacturing sector and another 15% are in the agriculture sector. Therefore the allocation for education should be in this order too. “At a time when we talk about country being driving by design and innovation, there are none of these in the budget. There are 400 design schools in India, but there are around 30,000-40,000 such schools in China,” says Mr Koshy. Keeping it all relevant How relevant is the higher education in India? While China has 500,000 vocational schools, training about 60 million people per year, India has about 12,000 centres, training about 3 million people per year. In his speech on Independence day Prime Minister Manmohan Singh said that the government will soon launch a mission on vocational education and skill development. “We will open 1600 new industrial training institutes (ITIs) and polytechnics, 10,000 new vocational schools and 50,000 new skill-development centres. We will ensure that annually, over 100 lakh students get vocational training which is a four-fold increase from today’s level,” Mr. Singh said. This looks like a good way out as the archaic courses in the system have generated many unemployed youth. The example of polytechnics producing engineers is the most obvious in this context. However, The Institute of Charterd Accountants of India (ICAI) has come forth and made some amendments. Unlike in the earlier years where people would pursue CA during college, from last year onwards students are encouraged to pursue the profession from class 10 onwards by seeking provisional admission. Says ICAI president Sunil Talati, “Right after class 12 a student can take common proficiency test (CPT) (something like CAT). So from now onwards its not mandatory for a CA to be a graduate.” NIIT, a private player in the field of IT education and training is another such example. Leveraging on its robust IT systems and sensing the demand for education programs for working professionals, NIIT launched NIIT Imperia in 2006. Under this program, NIIT has tied up with IIMs (Ahmedabad, Kolkata, Indore) to bring the latter’s executive management programs to 15 centres in 12 locations. NIIT Imperia has extended its offerings and reach to Tier II towns including Bhubaneswar, Nagpur, Vishakhapatnam and Chandigarh too. Further NIIT has established Institute of Finance, Banking & Insurance (IFBI) to develop talent pool for banking and financial services sector. It has partnered with ICICI Bank, HDFC Bank and Yes Bank to expand its offerings for the banking sector. NIIT IFBI has also partnered with ICICI Securities and ICICI Prudential for developing manpower for insurance sector. There is no sure-shot formula for reforming higher education. Change in government policies and FDI infusion in the sector may bring about wonders but what is also needed is a change in the way society thinks. We need an environment that nurtures both knowledge and skills. Thus the polytechnics shouldn’t produce engineers who don’t find employment. Rather, they should do what they are best at doing — producing skilled workforce. As Mr. Ananth puts it across, “Education has one use — survival. There are two type of survival skills. The first is for individuals and that involves vocational courses, something like training for call centres where the job description is laid down and is targeted to a market. The second is meant for civilisation. And this happens through higher education.” India would do well to heed these words. (With inputs from Mailini Goyal)