Awaiting budget goodies

Written by Kirtika Suneja | Updated: Mar 13 2012, 22:48pm hrs
The government has proposed numerous legislations to open up the higher education sector in the country, but a lack of clarity on these reform measures has left all stakeholders in the dark. The expectations of educationists from Budget 2012 is clear. They want a roadmap on the involvement of private sector in the higher education space and tax incentives that will help in achieving the governments target of increasing the gross enrolment ratio (GER) from 15% currently to 20% by 2017 and 25% by 2022.

Many Bills have not seen the light of day and a clear roadmap needs to be announced for enactments of these, along with financial backing to support them. Moreover, the GER is to be increased and only private sector participation can help achieve that. However, this is unlikely to come unless incentives are available, says Riad Joseph, partner at advisory firm Ernst &Young (EY).

According to EY, the higher education system in India comprises over 31,000 institutions and needs an investment of R10 lakh crore by 2020 to create an additional capacity of 2.5 crore seats. The private sector, which accounts for 52% of the total enrolment, would invest R50,000 crore per year in the countrys higher education sector.

Many well-established, reputed private sector higher educational institutions in India are run as non-profit bodies in both text and spirit. However, various restrictions are placed on these institutions when it comes to fund generation from the alumni and private sector. Another important area of reform is reduction in loan rates for full-time and part-time educational programmes. Today, many working professionals hesitate to take loans because the interest rates are high, notes Fr E Abraham, SJ, the director of XLRI.

Projects costs are high and the government can consider tax breaks for corporates who are setting up not-for-profit institutes along with reducing interest rates, explains Dr Rajan Saxena, vice-chancellor, NMIMS.

Besides tax incentives and exemptions for the sector, experts also want that vocational educationan ambitious scheme of the governmentshould be taken forward.

In fact, the All India Council for Technical Education has launched the National Vocational Education Qualification Framework to be implemented in polytechnics, engineering colleges and other colleges in the university system from 2012-13. The programmes are sector-specific and sectors like IT, media, entertainment, telecommunications, mobile communications, automobile, construction, retail, food processing, tourism, hotels, jewellery design and fashion design and many others have been identified for implementation.

NVEQF, no doubt, has the potential to be one of the biggest innovations in Indian higher education regulation over the last decade. But as with any complex policy innovation, the idea is only the end of the beginning. The complexity of operationalising credit transfer and equivalence, recognition of prior learning, credit for on-the-job training, etc, have the potential to overwhelm any framework.

The Budget also needs to focus on two factorsskill development and financial autonomy of higher education institutions, as per Shobha Mishra Ghosh, director of Ficcis education committee. With the mandate of skilling 5 lakh people in a few years, the government will have to encourage skill development and training programmes in the interiors of the country besides incentivising the private sector for doing so. Second, the Budget should make higher education institutes less dependent on fees and more on institutional lending, she says.

Not only institutional lending, IMT Ghaziabads director Bibek Banerjee wants education institutes to have greater access to capital and priority sector lending aligned to research.

We have traditionally looked at government support but capacity building can also be done through soft loans and tax sops, he opines.

Corroborates Abraham: In Europe and North America, institutions of repute in the higher education space are allowed to access funds and resources from the alumni and private sector, and many institutes like Harvard have multi-billion endowment funds, which open doors to deserving students who come from under-privileged backgrounds. Besides, institutions can undertake research in public policy areas without having to depend on grants etc. Thus, individuals and organisations must be given full tax benefits if they wish to donate funds to educational bodies.

Education should be given infrastructure status. This will encourage investments into the sector, and enable the private sector to garner the necessary funding to set up educational institutions across the length and breadth of India. A 10-year tax holiday to the vocational sector as skilling 5 crore people every year will require the combined effort of the private and public sector, says Satya Narayanan R, chairman, CL Educate (previously Career Launcher).

The prestigious Indian Institutes of Management, especially the new ones, want Budget 2012 to focus on infrastructure development and promoting education of women.

The new IIMs need funds to create infrastructure and construct their own campuses as we are yet to shift. We would also appreciate if women education is promoted because less than 15% of the IIM students are women. We need more number of women candidates at higher level positions by giving them greater opportunity, says P Rameshan, director of IIM Rohtak.