The following article of mine appeared in the op-ed section (fe Insight) in the Financial Express today (August 23, 2005).
Without doubt, as a society, we must strive to provide opportunities for quality higher education for all. In the ideal scenario, the state ought to provide such opportunities for all and subsidise it for those from the poorer sections. Article 41 of the Constitution (one of the Directive Principles of State Policy) as it relates to education, says: “The state shall, within the limits of its economic capacity and development, make effective provision for securing the right to education.”
The state has, so far, failed in its efforts to provide opportunities for higher education to all and is fully aware that within the limits of its economic capacity, it cannot do so in the foreseeable future. The private sector has been playing an important role in supplementing the state’s efforts at increasing the overall supply of higher education. Taking the private sector’s role for granted, the state has conveniently abdicated its responsibility to provide education for all, and has been forcing the private sector to subsidise education for the socially backward sections.
Two main issues brought to the fore by the recent Supreme Court judgement are restrictions on the state’s ability to impose reservations for the socially backward sections and set the fee structure with caps in unaided private institutions. The SC has ruled that the state cannot enforce its reservation policies in minority or non-minority unaided institutions and that such institutions are free to devise their own fee structures, as long as they don’t charge capitation fees and do not indulge in profiteering. The ruling is difficult to fault.
All political parties, without exception, are worried that the removal of reservations in private institutions would be a big blow to social justice, and they have a point. Socially backward sections have been benefiting from access to higher education through reservations, which are not purely merit-based, and they will lose out. There is talk of bringing about legislation to enable reservations in private institutions to continue. This legislation is certain to be passed in one form or another, given the overwhelming support for it across the political spectrum.
What are the implications of continuing with reservations? Reservations per se may not be a problem for private unaided institutions, if the state agrees to pay the full fees for those students who join the private institutions under the reservation quotas. Private institutions would have no cause for complaint. The problem arises if the state caps the fees for students in the reservation quota far lower than the full fees, without agreeing to compensate private institutions for the lower fee income, thereby preventing these institutions from recovering their costs from fees, let alone making a surplus. More than the reservations, it is the state’s control over the fee cap that is simply untenable.
Rather than worrying about the state imposing reservations on private unaided institutions, we need to focus on preventing the state from forcing the private sector to bear the burden of subsidising education for the socially backward classes. Our aim should be to try and ensure that any new legislation that is passed makes it compulsory for the state to bear the full costs of funding the education of all students admitted under the reservation quota in private institutions. If it cannot bear the costs itself, it could at least provide loans to students to be paid back over a long term.
At the same time, any new legislation must also ensure that all educational institutions, public and private, are transparent, non-exploitative and accountable to society, especially in devising their fee structure. As in the financial sector, all educational institutions must also be required to periodically disclose the details of their finances and operations. This would prevent them from charging capitation fees or profiteering.
It will be financially unviable for private institutions to subsidise education on a sustainable basis, if the state doesn’t take care of the subsidy. If forced to do so, most private institutions will fold up and there will also be no incentive for the private sector to set up any new institutions.
One of the most important challenges before us today is to increase the supply of higher education. Efforts need to be focussed on ensuring that any new legislation doesn’t affect our ability to do so.
