Liberalise education - do away with the Education Raj

In an article in the Economic Times (April 18, 2005), Prof. Pankaj Jalote of IIT Kanpur writing in the context of the recent Supreme Court decision derecognising over 100 private universities in Chattisgarh, argues for liberalising higher education and doing away with the Education Raj.  Here is what he said.

On the face of it, this concern for the quality of education is well place. But experience has shown that quality can't be ensured by legislation or the government deciding who can produce quality goods or services. If that were true, we would have had high quality in the License Raj.

Quality comes, first and foremost , by the consumer of the good or service demanding it. And the consumer can demand when there are choices available to him, so that he can punish poor quality by switching. Hence, multiplicity of sources and abundance of supply are essential to ensure quality. To allow the consumer to take an informed decision, there has to be information available about the good or service. With information and competition, the consumer is smart enough to make good choices. This is particularly true in the area of higher education, where, by definition, the consumer is already quite well educated and ambitious.

The current set-up aims to control education quality by giving out licenses to those the government sees fit to provide education. When there are licenses, distrotions naturally come. Even the rules for university affiliation are like licenses, and are often cornered by people with political connections. However, there are no mechanisms to ensure that information on universities or colleges is available to students and their parents. So, we have a reversal from the desired situation - in supply, where the government shouldn't play an active role, it is very active; and in ensuring that sufficient information is available, where perhaps only the government can play the necessary role, it is doing little.

A parallel can be drawn with the industrial sector. Earlier, we had the license system where who can produce wha,t and how much, was decided by the government. That situation as we know, was neither conducive to quality nor efficiency. Later the rules were liberalised and industry was freed. The results are here for all to see. Now, pretty much anyone can start a public company, but the company has to disclose relevant data to the shareholders, regulatory bodies and stock exchanges.

We need a similar liberalisation in education and the field of higher education should be thrown open. To ensure that only serious long-term players enter, a minimum investment (say Rs. 50 crores) should be stipulated before anyone can start a university. However, once in existence, the university must be obligated to file with a regulatory body (or equivalent) all the information needed by students and their parents, who are the main purchasers of the service. This will include information about the fees and other finances, about infrastructure and investments in it, faculty and their qualifications, on  and off-campus placements and the like. Basically all the information needed to make an informed decision.

The regulator can then ensure that the information is available publicly. By making the information public, students themselves will become the watchdog to ensure that the information is correct. Just ensuring that this information is available publicly will be a great service to young education seekers, who otherwise rely on gossip and touts to inform them about the quality of universities and colleges.

One should not confuse regulation with accreditation. The regulation structure is being suggested to ensure that information is provided by institutes and that the rules of the game are followed. Accreditation on the other hand, is a "seal of approval". It is like the ISI stamp provided to a product, or the ISO certification given to a plant. So a university can be UGC or AICTE accredited or not - but the quality of education they provide is not dependent on that accreditation. Just like the ISI mark is not necessary to produce a good, accreditation is desirable, but should remain voluntary.

I completely agree with Prof. Jalote on the need to liberalise higher education. I had argued in an earlier post that the government should only look to be the regulator (like TRAI or IRDA) and set the broad guidelines for all educational institutions to follow and then let independent rating agencies (like CRISIL, ICRA and CARE) evaluate each educational institution and publicly announce its ratings of all institutions to enable students to make informed decisions in their choice of educational institutions.

Prof. Jalote's idea of making it mandatory for all institutions to file periodic reports with regulator is an excellent one. These reports along with the ratings by the agencies will help students to separate the wheat from the chaff and the chaff will then slowly begin to disappear all by itself.

Comments

[Abi]

Satyanarayan,

This is a truly wonderful blog. I greatly appreciate the time and effort that you put into collecting and disseminating news, views, ideas and insights about education in India. I am truly grateful.

Coming to this particular post, I too have expressed strong agreement with Pankaj's views. I was not, however, aware of your own views on this subject. I have clarified this point over at my blog in an update to this post (sorry about giving the full URL; your blog does not allow me to provide hyperlinks!):
http://nanopolitan.blogspot.com/2005/04/education-raj.html

[Naveen]

We tend to forget that government departments have a behaviour of their own that helps them in perpetuating beyond necessity. We also tend to forget that the traditional notion of education may be radically discarded and new forms of cheaper and effective education might emerge. In the face of this Pankaj Jalote's suggestions might be tweaked.

One, do not put entry barriers for opening institutions in the form of Rs 50 crores. This will only make it incumbent for institutions to price their products that much high to recover their investments. Technology is going to rapidly change the way education is delivered!

Two, pass an Act that government higher education departments will henceforth be be self-financing and concerned only with rating of educational institutions, nothing else. Do not make it mandatory for information to be made available to govt institutions for they will end up supplying data like this! "300 new schools opened last year" whereas in reality 1300 schools are needed!
Let them compete to provide the best information. The more competition among information suppliers, the better will it be for the consumer. If the govt dept is not self-financing and supplies information, it will supply at very low cost to the consumer. This will result in crowding out of the private supplier of information.

Let them carry on their literacy drives in the meantime!

Researching Reality

[Satya]

Thank you for your encouraging words, Abi. You mail was the first time I came across your blog and I must say I am very happy to have come across your blog and will follow your blog regularly. I wish and hope more academicians like you start blogging - it would help raise the level and intensity of public debate on various issues.

[Niket]

Currently, our economics is dominated by the socialist view and politics by a need to control everything. Especially with regards to education, the widespread belief seems to be one of increasing government control. However, most op-eds, bloggers, etc seem to agree on removal of what you term as "education raj". I was wondering if you are aware of anyone who has articulated his views on continuing the education / licence / quota "raj". I wonder if there may be well-meaning people on the other side of the fence who believe such a move would actually dilute the standards of education. The reason I say this is because I often wonder if there are any blockades to doing away with the "raj" other than lethargy or vested (political) interests.

[uwanjarr]

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[Chat]

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[Chat]

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[Sudesh]

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