Rustom Kerawalla, Chairman, Ampersand Group, 0
In a post-Covid-19 world, the Indian education system has been in the throes of two major challenges: access and quality. Issues such as lack of proper infrastructure facilities, high student-teacher ratio and shortage of trained teachers, have been impacting the quality of overall education for quite a while now.
While taking into account the Gross Enrollment Ratio (GER), which is calculated as a percentage of total number of students enrolled in a specific level of education divided by the total population within the relevant age-group (18-24 years), the GER for elementary education, is over 100 percent and for secondary education, this ratio is over 50 percent. As enrollment in elementary education has been maximised, and enrollment and drop-outs in secondary education are being addressed, the pool of students seeking higher education opportunities will increase over the next few years. It is anticipated that there will be a greater demand for university education in India.
It may be noted that over the past 10 years, the Central government expenditure on higher education, has been fairly constant at around 1-1.5 percent of its total expenditure. Over a period of time, various expert committees have observed the importance of private sector investment in higher education to raise this expenditure. Currently, India spends 1 percent of its Gross Domestic Product(GDP) on higher education. Contrastingly, the US spends about 3 percent of its GDP on higher education, while Russia and Brazil spend 1 percent and 0.5 percent respectively. The US, Chile and Korea also show high proportions of private expenditure on higher education, which is between 1.7 percent and 2.1 percent of the GDP.It is imperative to improve the quality of various education institutions along with quantitative expansion.
An Uphill Task
In India, private players often face challenges in setting up and operating educational institutions. From a regulatory perspective in particular, educational institutions are allowed to be set up either by the Central, State, local government or the private sector by establishing a trust or society. There are strict norms around infrastructure and other facilities, process of application, registration as a society or trust to obtain the land, establish a particular educational institution.
In addition, there are complex regulatory operational challenges to the private sector, which is detrimental to their existence and contribution to the growing quality. High land costs, unavailability of land, high teacher salaries and 25 percent reservation for economically weaker section (EWS) impact the viability of educational institutions.
Apart from the multiple licenses required to open and run an educational institutions, there are requirement of several documents, which discourages and deters new entrants from going through the process of opening a new institution.
The Supreme Court of India has interpreted the nature of educational institutions to be charitable and not-for-profit. This way, supernormal or illegal profits cannot be made by providing education. If a revenue surplus is generated it is to be used by the educational institution for the purpose of its expansion and education development.
The government can look towards formulating the standard operation procedures(SOPs) for private players to operate and manage educational institutions on the lines of critical sectors like defence, space and infrastructure.
As enrollment in elementary education has been maximised, and enrollment and drop-outs in secondary education are being addressed, the pool of students seeking higher education opportunities will increase over the next few years
Today, Special Economic Zones (SEZs) enjoy the single-window clearance system, this can be implemented in the education sector as well.
The government can develop a mechanism of easing the entry barriers by doing away with multiple licensing system and having a single-window clearance to encourage investment in the education sector.
Private-unaided educational institutions should, based on the Supreme Court guidelines, be permitted to develop their own admission policies, subject to limited controls exercised to ensure that the parameters are merit-based, especially in practical cases where applicants far exceed a particular educational institution’s capacity.
The government can look towards allowing hub and spoke model where neighborhood educational institutions are covered in the main institution’s ambit, therefore, enabling resource pooling, accessing rural areas and maintaining consistent quality with low costs.
Similarly, resource pooling of government institutions also by private players can be encouraged to ensure effective utilization of government and private resources.
In addition, the government can consider allowing two-three year time-frame for setting up of educational institution from the time of application by a particular society or trust.
Further, provisions can be made to provide subsidized land for educational institutions as against current availability of institutional land or agricultural land for commercial use.
In addition, the government can look towards allowing companies to set up educational institutions. A company structure, on one hand, allows increased flexibility for building geographical expanse. On the other hand, it paves way for better governance structures and mandates disclosures according to the requirements of the Companies Act. Companies are also subject to mandatory external audit, which ensures transparency.
Taking a leaf out of the experiences of other global nations, there are several private, not-for-profit education institutions that have been operating successfully in countries like the US and UK.
Overall, this will improve the performance of educational institutions in achieving certain objectives, such as graduation of students, academic improvement and retention of disadvantaged groups.