Fresh approach to higher education
The Confederation of Indian Industry has submitted a proposal to the government to allow private investors in higher education to make profits and distribute the same. If foreign investors come into the higher education sector, not only can they make profits, but they should also be permitted to repatriate them. The government appears to be sympathetic to the main idea underlying the proposal. The CII believes that this proposal will improve the quality and quantity of investments in education, and investors will be more conscious about long-term profitability. This, in turn, would help them focus on high standards of inputs and facilities. Presently, private investors in higher education are allowed to create surplus from their operations, but that money cannot be distributed. It can only be used to augment a corpus of funds for the institution, or the surplus can be used for improving and expanding the institution. Hence most educational institutions that run with private funds are in the form of societies or trusts. Private investors look upon higher education as an opportunity for parking funds for philanthropy, or for getting tax breaks. They do not usually get involved in daily operations. Hence quality suffers. This has indeed been the trend of investments in higher education during the past three decades. There are only a handful of exceptions.
How would allowing profits to be made change that? Higher education offers enormous opportunities for large investments with financial rewards. However, there are two main concerns that stakeholders have. First of all, there is the question of affordability and access. What if the fees are beyond the reach of most meritorious students? One way out of this is creating a scholarship fund for needy students. Each institution could create its own kitty and cross-subsidize the needy. The State could also have funds for soft loans or funds for scholarships. This system works reasonably well in other nations that have world-class higher education systems. The second concern is about greedy investors looking for short-term profits at the expense of quality. This can be mitigated by having a regulatory institution, comprising selected academicians of impeccable international repute, monitor quality. The government and bureaucracy should stay clear of this regulatory process. When investors are allowed to make profits, they usually nurture the venture with care and concern. The proposal, if it helps maintain standards and accessibility of education, is worth a look.