Solution to the reservation issue? It's the supply, stupid!
Why have we been debating reservations right from the 1950s and not made them redundant yet? Its only because the supply of educational opportunities continues to remain limited and scarce. If there were enough high quality insitutions (schools, colleges, IITs, IIMs, and institutions of all other kinds), no one would need to clamour for reservations or endlessly debate the percentages. But as long as the supply is restricted, there is no alternative to reservations - indeed they are necessary.
This scarcity of educational opportunities is of our own doing. Our successes in the food and telecom sectors in addressing scarcities are pointers to what could have been in the education sector. There's no reason why we can't replicate the success in the education sector too.
The Food Sector experience
There was a time when we were not able to grow enough food in the country to feed all our people and had to go with a begging bowl asking other countries to send us food. At that time, food had to be rationed so everyone would get a basic minimum quantity. Thanks to the Green Revolution, we now produce enough food to feed everyone and more, though there may still be logistical and quality challenges in getting the food to one and all. Today's ration shops are only in name - they've now morphed into a distribution channel for subsidised food to the economically weaker sections of society.
Not only do we produce enough for ourselves, today we have enough of a food surplus to be able to export agricultural produce of various kinds. The government did not take on the responsibility for producing all the food by itself - it relied on private citizens and organisations who produced the food for profit. Despite private for-profit involvement, there has been no profiteering in this sector. If anything, profiteering was rampant in the ration era where food was diverted from the ration shops to the black market.
The Government plays an important regulatory role in terms of ensuring food quality by enforcing the Prevention of Food Adulteration Act of 1954 and also setting up and managing the ISI and Agmark Standard for quality and purity of food products.
The Telecom Sector experience
There was a time when getting a phone line meant a waiting list of a few years. The lucky ones were able to jump the queue through special quotas for doctors, government officials etc. Thanks to the new telecom policy which opened up the telecom sector to private investment, today, every one in India can think of getting oneself a mobile phone at a very affordable price for the handset and very attractive schemes for monthly usage. Indeed the prices of both mobile handsets and the monthly plans have been consistently dropping. While both state-owned BSNL and the private telecom operators are for-profit organisations, making profits, there has been no profiteering in the telecom sector.
The Government plays an important regulatory role through the Telecom Regulatory Authority of India (TRAI) to regulate both private and the state owned telecom operators. TRAI lays down the standards for provision of telecom services and enforces those standards to ensure that the telecom operators provide a minimum quality of service to customers.
Lessons from the food and telecom sector
The factors that led to expansion of supply of food and the provision of telecom services to the entire population and the shift from a rationing scenario to a siutation of plenty were simple.
- The Government relied on private participation to produce food / provide telecom services to augument the government's own efforts to expand supply.
- The Government allowed the private sector to get involved on a for-profit basis to make it attractive for private sector participation
- The Government devised and enforced regulations, which were aimed at regulating the quality of the food/telecom service.
The Opportunity Revolution
The Opportunity Revolution should be based on a set of simple principles
- Our fundamental mission must be to provide educational opportunities for all our citizens right from the primary level through to higher education. That is the end to aim for, and all possible means to achieve that end must be used.
- The Government clearly does not have enough financial resouces to provide education for all citizens all by itself. So the Government must actively invite private sector participation at all levels to augument the government's own efforts.
- The private sector must be allowed to operate on a for-profit basis. That has worked very well in both the food and telecom sectors and could work well in the education sector too. Allowing for-profit involvement in education is likely to result in a huge amount of private sector investment in education to rapidly expand the supply of eductional opportunities.
- The Government must regulate the quality of education provided by both the state-run institutions as well as private sector institutions. The Government must NOT aim to regulate the growth of the education sector, indeed it must encourage unprecendented growth without compromising on quality. All educational institutions must be required to obtain quality ratings from independent rating authorities like CRISIL, ICRA or CARE. Educational institutions must be held responsible for any fall in quality below minimum published standards and subject to penalties, just like in the food and telecom sectors.
- The Government must ensure that all educational institutions operate transparently in terms of their finances and publish detailed financial and other academic information and make it available to students, parents and the public at large to enable them to make informed choices on which institutions to attend.
- The Government must allow the educational institutions the freedom to set their fee structures and not insist on capping the fees at figures like 20% of operating costs, as has been suggested.

Thank you for writing this Satya. I argue along similar lines with people in and outside academia. Those outside don't seem to understand the demand-supply mismatch even though they experience it when they want admissions.
Those inside look at me funny for suggesting that education could be a business. They seem to forget that their attitude has spawned a parallel (black?) market in education where we must make-do with questionable quality for exorbitant prices.
For example, HUDA sold school land in Gurgaon for tens of crores to non-profit organisations. The economics of such transactions is crazy. How do these charitable bodies justify the expense even if the money was donated to them? Was there no better use of the funds?
A for-profit education industry with reasonable regulatory overview is clearly the way forward.
Posted by: Amit Wilson | April 13, 2006 at 11:22 AM
I would endorse Satya's views here completely. Improving the present education sector is a very pressing need of today. Especially when the entire world is looking to India as the next emerging nation in the knowledge area.
Students ought to be given an opportunity to take their choice of subjects and discipline. Government should phase themselves out of the quota system and create an atmosphere of quality and plenty in the education sector.
Posted by: Saikumar | April 13, 2006 at 05:02 PM
Well, what is the reason for the scarcity of the educational institutes? It's the demand stupid. Pre-liberalization, our economy simply didn't have the traction to absorb any amount of skilled man power. Now the situation is rapidly reversing and as a result we see increase in capacity of our educational institute. Two more IIMs, some more IITs etc. Not to mention many more private institutions.
Unfortunately, the reservation issue is completely different. Even if we had abundant seats, it would crop up. Reservation is a manifestation os collectivist ideology, which finds its root in the ideas of communism, wealth re-distributoin etc.
Posted by: Some Dude | April 13, 2006 at 05:27 PM
I accept with your argument. This will definitely work. Exploding private engineering colleges in south India (exclude Kerala) can be thought as a pilot example and that piolot program is great success in the sense that they made engineering education available to most people which made IT revolution possible in India.
The concept of reservation is itself a farce. I dont know when people come-out of this illusion.
Raja
http://malapati.blogspot.com/
Posted by: Malaati Raja Sekhar | April 14, 2006 at 04:18 PM
Govt. cannot provide education to all is quite correct but what about private sector money making machines like IIPM, Amity and Rai? Are they not for profit? And lesser said about their quality of education, the better. And there is tremendous demand for their product too!
I am no fan of AICTE, and it would be wonderful to have independent rankings but they can go like IIPM getting high ranking and later it got withdrawn by Outlook/Cfore.
It doesn't seem to be so simple, silly.
Posted by: Mridula | April 14, 2006 at 04:57 PM
And what happens when there is an abundance of engineers, doctors and MBAs contending for a limited number of jobs? It's not possible to expand the number of jobs (Job Revolution?) to accomodate all of them, is it? In these days of jobless economic growths, it's even more adverse. So what we would have in the end is millions of highly qualified, jobless youth. And the same issues we are discussing now (competence, merit, historical disadvantages etc.) would crop up then, after an 'opportunity revolution' has taken its toll (like Mridula has mentioned) on gullible people.
Posted by: Voice on Wings | April 15, 2006 at 11:08 AM
Amit, there's not much we can do but keep the focus on the supply issue and hope that policy makers will begin to see reason sooner than later.
Some Dude, yes, the demand has gone up in the last 10-15 years, while the supply has fallen far behind demand. Hence the clamour for reservations to split the small pie. If there were abundant seats, the reservation issue wouldn't be a demand-supply issue anymore, but rather an issue of whether to let underprepared SC/ST/OBC students enter higher education institutions. Their entry would not affect the chances of non-SC/ST/OBC students.
Mridula, yes, institutions like IIPM and others are beyond the pale of regulation and leave much to be desired. The tremendous demand for their courses is just a reflection of the supply side scarcity. People want something so bad that they're willing to take anything they can get. What we need is strong regulation of quality, not regulation of supply.
The rankings by Outlook and other such magazines are shallow and done with the intention of selling copies of their magazine rather than a focus on evaluating institutions critically. What we need are not so much rankings (as in which institution is ranked first) but ratings (as in whether a particular institution is a Grade A, B or C institution). Ratings must be be made mandatory for all educational institutions and done by specialised, reputed rating institutions like CRISIL, ICRA or CARE who are already ranking all maritime educational institutions in India.
Posted by: Satya | April 15, 2006 at 11:48 AM
Voice on Wings, are you suggesting that since there might be a possibility that not every one who gets a higher education might get a job when they graduate, they ought not to go in for higher education at all, even if they have an aptitude/ability for it? Better to have uneducated, unemployed than educated, unemployed? I don't think so.
Ultimately, its incumbent on us as a society to try and ensure though social, economic and political policy choices that enough jobs are created for all. That is another supply issue that will need to be addressed.
The choice of courses offered in our institutions will also need to change in tune with the times and the kinds of jobs that will be available as a result of our policy choices and market demands.
Posted by: Satya | April 15, 2006 at 12:16 PM
"Voice on Wings, are you suggesting that since there might be a possibility that not every one who gets a higher education might get a job when they graduate, they ought not to go in for higher education at all, even if they have an aptitude/ability for it? Better to have uneducated, unemployed than educated, unemployed? I don't think so."
I am not advocating illiteracy. I'm saying that this question of social inequality has to be addressed, and cannot be wished away by 'clever' proposals for alternatives. Coz the question will come back to haunt us, with far greater impact, once all the alternatives have been exhausted.
Posted by: Voice on Wings | April 15, 2006 at 01:10 PM
Please do not compare Amity University with the likes of IIPM and Rai. There is a huge difference in terms of quality of faculty, students and infrastructure.
Posted by: Rahul | April 15, 2006 at 07:45 PM
This is no reservation in india.This may sound strange but the fact is true. Reservation needs to be fulfilled in true spirit of the constitution. however, it has not been happening so far.
Posted by: samson s. chiru | May 04, 2006 at 05:18 PM
I think the IITs and IIMs should be commercialized. They should be open for investment from private individuals and companies. Who can invest in new infrastructure and faculty and should be guarenteed a good return once the students graduated using the new facity start earning.
Posted by: pavan | May 14, 2006 at 08:58 PM
It is time that we understood the real meaning of the issue.
Soon it will not be a case of mere discrimination against legitimate fundamental rights of so called upper cast citizens, but a case of PERSECUTION. Hitler had started the same way dividing German society and started a drift that changed the course of world history.
Does parliamentary democracy in India mean that bunch of politicians can kill the legitimate and fundamental rights of a certain section of society and start depriving them?
The constitution of India as it stands now, has lost the ability to protect rights of people who are being persecuted by the state on the basis of cast and religion -i.e. so called upper castes and Hindus!
Is it not the time for petitioning the issue in UNHRC? Is it also not a time to start applying to foreign consulates and demand political asylum on the ground of persecution by the state?
Beware world! If situation deteriorates in India by the action of screwed up Indian politicians then the whole world will suffer due to massive migration of people form India.
Posted by: m s waldia | May 16, 2006 at 09:56 AM
costs of migration in education is high.
the analogy to food and telecom sectors fails in the aspect of switching costs. my sense is that if as a student, i am displeased with my college/school, the costs of moving to another service provider is very high and usually prohibitively so.
there is no one certain method of solving the immensely complex issue of quality education for all. there has to be mulitple experiments and attempts happening in different partnerships.
Posted by: sriram | May 19, 2006 at 10:50 AM
What is reservation?
For some middle class & high middle class OBCs, who think they are going to be benefitted by it because they cannot work hard to qualify, reservation is their greed.
For poor & rural people, reservation is some word for which people in cities fight.
For elderly common people who have nothing to gain or loose from reservation, its government's wicked policy to rule over people.
For politicians, this illogical word "Reservation" is vote gaining and ruling magic.
For studious & visionary people, Reservation is a high speed vehicle to destroy India.
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