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Union Budget FY22: Who pays for financing universities?

Union Budget 2021 India: When universities depend on state finance, their independence and standards suffer

However, education being the greatest boon of a socialist welfare state, the government could evaluate the option of a direct benefit transfer to students who need and deserve to get a scholarship to be able to fund their education.

By Shantanu Rooj

Indian Union Budget 2021-22: The story of Indian higher education is less about expansion and more about inflation of qualifications. In everything, from cash to reputation, most universities are living off the past. Owing to their self-governed and self-financed autonomous structure, some are still in relatively good shape; the autonomy limits the power of regulators, provides independently-managed funds and ensures protection for the excellent. Other state universities have worse problems—in a system unacceptable to modern democracy, quantity, quality and fees of courses are state-controlled. Barring a few really focused ones, most students, with qualification in hand, will arrive in the job market, feeling cheated; their most precious investment ending up with dubious returns.

The Union Budget FY22 revealed new realities—it cut down funds to the higher education sector to Rs 54,873 crore from Rs 59,845 crore the previous year. The government decided to fast-track the implementation of the NEP and has committed to bring in a single higher education regulator this year. It also demonstrated its commitment to apprenticeship by committing Rs 3,000 crore towards apprenticeship training. Evidently, universities will need to think of new ways of financing to remain sustainable. Amongst many things that must be attempted to make the system self-healing, there must be concerted efforts to make Indian universities more competitive.

A crucial part of competition is allowing financial autonomy to universities and allowing flexibility in setting their course fees. Most Indian universities charge little or nothing. But fees have two clear advantages:

One, ensuring the university is answerable to nobody in its planning; medicine, engineering and law are expensive to teach, so they cost more. But these would be the university’s own decisions; it can raise money from fees or get sponsorships or subsidise it from its reserves.

Two, fees also mean that students are much more powerful customers—hugely under-priced goods and services are generally wasted, and university education is no exception. Students from American universities, during their visits to India, are often surprised to attend lectures with no visual aids, out-of-date hand-outs, and drawings and non-relatable case stories. Such complacency will find no place when students have a choice. However, education being the greatest boon of a socialist welfare state, the government could evaluate the option of a direct benefit transfer to students who need and deserve to get a scholarship to be able to fund their education.

Degree apprenticeships surely present a winning product—these address the need of building soft skills while learning academic papers (on-job training helps build crucial skills that students need when they enter the job market), create an employer-funded education model (the stipend earned helps subsidise university fees) and create a readily employable workforce (the industry actively participates in course-creation, training and assessments). Universities should invest themselves in creating innovative products in partnership with industry—the research-driven culture of the university and the innovation-driven mindset of the industry can together revolutionise the system.

For Indian universities, the question is to whether to wait for de-nationalisation or start a move towards freedom on their own initiative. State supervision, coupled with diminishing budgets, gives universities the image of a failing nationalised industry, rather than of world-class outfits devoted to the innovative business of bringing original thinking. Can they stop talking about reforms and actually introduce some themselves? Meanwhile, American universities, hugely wealthier, happier and brainier, march relentlessly on.

The author is founder & CEO, Schoolguru Eduserve, a TeamLease Group company

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