Looking beyond Mr. Joshi

Business Standard, 17 March 2004

The controversy about the IIMs will be resolved, particularly because we can expect a fresh draw of the cards after the elections. But the deeper question remains. How should higher education in India be organised?

Fiscal stress at the level of the centre and states has thrown up questions about higher education that were never asked before. When government funding promised to provide a stream of resources to universities, issues such as student fees, and endowment funds, could remain in the background. However, for the last few years, it is easy to see that the comfortable equilibrium is breaking down.

With no signs of the fiscal situation improving, to assume that universities will be able to offer decent salaries and adequate facilities for research and teaching is to live in a fool’s paradise. Already, the quality of education and research in most institutes is very poor. No one can realistically claim that in the current structure, things are going to get better. There is no reason at all why things should get better. By merely making the review process of merit promotions of teachers tougher, as has been done by the UGC, the system cannot be expected to see a sea change. It is important to think in terms of developing more suitable models, before the situation deteriorates further.

This is not to say that a handful of islands of excellence do not exist. Mr. Narayana Murthy of Infosys famously commented that since his son failed to get into IIT, he went to Cornell instead. But there are only five IITs. In social sciences, institutions like the Delhi School of Economics and JNU, are also limited in number. However, these centres of excellence are also suffering from the same resource crunch as the others. They are also unable to provide top-end facilities to students and teachers, and unable to attract the best talent, as salaries that can be offered are constrained by the system. If IIMs had been able to break free of the fee structures to provide better facilities, it now appears that this will no longer be possible.

How are universities and institutes of higher education to provide better facilities to staff and students? Today India takes great pride in the vast talent of highly educated people, that offers her a unique comparative advantage. Earlier, it was about IITians in the silicon valley. Today, we see not just BPO, but also R&D labs being moved into India. This can become a major source of growth in the economy.

However, these are the products of a system that was ensured by the availability of public funding. The fiscal stress of the government is expected to reduce real resources available to higher education. How will we be able to organise higher education so that cuts in public spending do not lead to a deterioration of one of our most precious resources?

The problem calls for a fresh exploration into the management principles. As a key feature, universities will need to devise fee structures for mainstream and continuing-education programs, which will produce a large chunk of their revenues. A central feature of this must be a much greater user-centric focus in devising educational offerings. If students want to learn economics and not political science, then the university will need to rapidly shed staff in the political science department and replace them by staff in the economics department.

To some extent, this is already happening. As universities are faced with a resources crunch, programmes have been devised to offer courses that students are willing to pay for. The fee from these are raising resources for other programmes. However, this is being done, not as part of a systematic move to reduce dependence on the government, but as long as the likes of Mr Joshi are willing to turn a blind eye towards it. As in the case of IIMs, this can unfortunately be reversed. Even small attempts at supplementing university resources are in danger as long as the universities do not have complete autonomy.

Only when universities have autonomy will they be able to be truly dynamic and nimble. Autonomy is unlikely to happen as long as an institution is dependent on the government for resources. As with firms, successful universities will be those which are nimble footed in such reorganisation; which are able to quickly create and close down departments and centres in response to changing needs of the country.

Another key feature which explains the success of well run universities, such as in the US, is labour market flexibility. The rigidity of the "IIT-IIM" or "UGC" pay scales needs to be dispensed with. There is a need for much more of a market where universities compete with each other in offering attractive compensation to lure the best researchers.

What are the difficulties with the above model?

Fears abound that reduction in government funding will mark the end of social science teaching and research. A look at some of the institutions that have been promoted in Mr. Joshi’s regime, such as Vedic Studies, Sanskrit and Hindu philosophy, reveal that social science research is not without political flavour even when funded by public money. Let us not be naive in thinking that additional resources will not flow to these areas, but to truly autonomous centres.

Universities such as Harvard and MIT have not closed down their social science departments. There are enough students all over the world wanting to go for higher education without wishing to become scientists or engineers. Suitably attractive courses in languages, arts and social sciences can surely be devised, to cater to teaching and research in such subjects.

Another difficulty with the above model is that it felt that higher education is a public good, and the government must therefore, provide this public good. Again, this raises the question of provision vs. production, a question that is often discussed in the context of education vouchers in primary education. In the case of higher education, instead student loans can be provided to pay for the higher fee. Surely, the IIM (A) student who bagged a $100,000 per year job at Morgan Stanley can afford to pay back the loan. Provisions such as repayment of loans, if and when the student gets a job, and over a 20 or 30 year period, such as in Germany, can ease Mr. Joshi’s conscience. Public subsidy in student loans would allow a better allocation of resources than with Mr Joshi dictating the courses and the fees.

Only an acceptance of the reality that the current model cannot continue, will be able to generate the discussion and debate that is necessary for finding new and suitable models for higher education in India. Unless university teachers and educationists take up this responsibility today, the coming years would see many unfortunate stories like the IIMs.