Sync Education System With Entrepreneurs

There is urgent need for the Narendra Modi government at centre to make arrangements for making the national educational system for entrepreneurial developments

By MM Ansari

The Prime Minister Narendra Modi has rightly expressed the concerns of his government for improving quality and relevance of education and skills training so as to improve productivity of resources and to reap the benefits of ‘population dividend’. And, to realize this goal, a number of high-powered committees have been constituted to suggest ways and measures for comprehensive reforms of all types and levels of education.

While the Committees headed by TSR Subramanian for review of entire education system, Hari Gautam for reform of University Grants Commission (UGC) and MK Kaw for review of AICTE have duly submitted their Reports, the K Kasturirangan Committee’s Report on ‘New Education policy’ is still awaited for the last more than one year. All these expert committees have strived for outlining measures for reforming all types and levels of education with a view to promoting innovative practices and entrepreneurial training of working population. But, the outcomes of the government’s efforts thus far to transform education, to match the average global standards, are disappointing. Consider the following:

Why quality education and skills development? In the era of knowledge and technology driven economy and the society, educational reforms are critical for empowering the youth, who are not only one of the largest in the world but also the youngest with the average age of less than thirty years. As education and training of manpower have intense and pervasive impact on socioeconomic transformation and quality of life, successful educational reforms will obviously determine India’s chances of becoming an economic superpower in the foreseeable future.

There is consensus among the development experts that in the globalized world, economic competiveness and success of a country and its ability to improve quality of life of people, is determined by utilization of new technologies and application of innovative practices, which in turn depends on performance and accountability of higher education institutions (HEIs) that are responsible for preparing and producing competent manpower to effectively manage the society and economy.

Improving quality and fostering excellence in HEIs is therefore a major challenge as most graduates who seek employment in the complex corporate world lack expertise and experience of business education, which the companies needs. HEIs also oversee the performance lower levels of education, namely elementary and secondary education, by way of modernizing curricula, teachers training and skills development support. And, there is much to be desired in so far as quality and relevance of elementary and secondary education are concerned.

In this backdrop, the Prime Minister Narendra Modi, in his Convocation address at Patna University on October 14, 2017 said, “Indian universities have not found any place among the world’s top 500. Isn’t it ironical that the country where its universities like Nalanda, Vikramshila, Taxila, Vallabhi had attracted the entire world about 1300 or 1500 years back did not find any place among the top 500 universities of the world? Don’t you think that we should erase this slur and change the situation?”

To ‘change the situation’, the Modi government has duly invested considerable time and resources to reform the overall education system, including higher education and research. As pointed out above, a number of Expert Groups, namely the Committees headed by TSR Subramanian, K Kasturirangan, Hari Gautam (for UGC) and MK Kaw (for AICTE) have been constituted and these committees have provided the necessary feedback for evolving the policy guidelines. Yet, the government has neither finalized the New Education Policy (NEP) nor the Committees’ reports are put in public domain for the benefits of various stakeholders, mainly institutions and educationist. The government may fulfill its promise of adopting an acceptable NEP that should ensure strengthening institutions to catch up with global standards. There has been piecemeal effort to make policy intervention in respects of greater autonomy and funding reforms, which have created more confusion in the management of institutions. A few of the major issues affecting quality and funding of HEIs are briefly discussed.

Inaction for meeting shortage of faculty: Teaching and research programs in most HEIs suffer due to shortage of faculty to the extent of 35 to 45 percent due mainly to ineffective governance in recruitment of staff. It may be recalled that in a meeting with the President Ram Nath Kovind on January 6, 2018, the Vice Chacellors of seventeen Central Universities discussed teething issues faced by them, including uneven pace of campus development and faculty shortage. All the new elite institutions like IITs/IIMs face a similar problem.

Declining allocation of financial resources: The funding bodies, namely MHRD/UGC are required to disburse funds commensurate with requirements for full staffing and infrastructure for research and innovation. The government is however unable to reverse the declining trend in allocation of financial resources for education sector. Budgetary allocation for instance has of late decelerated from 3.2 percent of gross domestic product (GDP) in 2014 to 2.6 percent in 2017, which belies the expectation of raising this ratio to 6 percent of GDP, as promised by the government. The share of higher education and research is merely 0.6 per cent of GDP, which is why quality of teaching, research and innovation is abysmally low as compared to best performing HEIs of the world.


Lack of utilization of secondary and higher education cess: Unfortunately, the accumulated funds that are collected by the Central government under ‘research and development cess’, have not been efficiently utilized for the purpose for which it is levied, on the basis of one per cent from Income Taxpayers.

In its report to the Parliament, December 20, 2017, the Comptroller and Auditor General (CAG), has observed that the Central government in the last ten years collected Rs 83,497 crore by way of secondary and higher education cess between FY07 and FY17, but funds were not  utilized for fulfilling the commitments made in the Finance Act for promotion of secondary and higher education as merely 7.73% was utilized towards the objectives of levying the said cess. CAG has therefore concluded that “the commitment of furthering secondary and higher education cess as envisaged in the Finance Act was not transparently ascertainable”. Clearly, it is not the paucity of funds but lacks of political will that is responsible for unacceptably low performance of HEIs. The government must do the needful and utilize the funds earmarked for higher education and research.

Increasing privatization and commercialization of education: With a view to reducing financial burden on the government as well as improving accountability of institutions, privatization of higher education has steadily increased so much so that over eighty percent of universities and colleges are under private management, which enroll over sixty percent of students. And, this trend is rising due to commercial viability of such institutions. A significant majority, over three-fourths, of self-financing institutions are not accredited for quality assurance. The graduates of most private HEIs are not well prepared in terms of entrepreneurial capacity to effectively function in the knowledge economy. A significant majority of university graduates are termed as ‘unemployable’, which contribute to wastage of resources.

Growing non-performance assets on account of education loans: More importantly, for financing higher education, the costs of which are prohibitive, students’ loans scheme provides an option for all those who cannot afford to meet educational expenses from their current incomes. Evidence shows that as many as nearly 3.0 million students, most of whom pursue technical, professional and management education in private universities avail of loan facility. According to Indian Bank’s Association (IBA), the total outstanding amount of education loan at end of the fiscal 2016–17 was Rs. 67,678.5 crore out of which Rs. 5,191.72 crore was Non-Performing Assets (NPAs). NPAs contributed by education have grown from 5.7 per cent to 7.67 per cent at March-end 2017, which is attributable to inability of graduates to payback outstanding loans due to unemployment or underemployment.

A high ratio of outstanding loans or non-recovery of students’ loans is a pointer of inefficient management of loans, which has potential for not only destabilizing the lending Banks due to rising NPAs but also to provoke unemployed beneficiaries to demand for loan waivers as given to farmers in different states. The government may therefore increase the allocation of scholarships and grants to mitigate the burden of loans on students from weaker sections. The recent developments in higher education funding have potential to aggravate educational disparity between the students from rich and the poor families, which does not augur well for reaping the benefits of ‘population dividend’.

Lack of accreditation of institutions for quality assurance: The National Assessment and Accreditation Council and National Board of Accreditation that are responsible for accelerating the process of accreditation have failed to expeditiously accomplish the mandatory task of accreditation of HEIs, which is why quality of teaching, research and innovation has suffered. The Central government must have provided infrastructure support, commensurate with the task of accreditation of a large number of HEIs to ensure development of entrepreneurial capacity and innovative practices, which in turn is critical for ensuring economic efficiency and success in global markets.

Graded functional autonomy and Institutions of Eminence: Recently, as many as 62 public and private universities that are accredited in the highest grades have been granted ‘graded’ autonomy for expansion and diversification of their teaching and research programs. And, at least, six institutions have been granted the status of Eminence, of which one of them, namely Jio Institute does not exist as of now. These institutions are allowed to raise funds from alternative sources, including upward revision of tuition fees and various user charges to recover the full costs of educational services. Besides, they are free to adopt their own admissions and recruitment policy. This policy approach has a serious repercussion for both the beneficiary students and the institutions as well.

First, the overall enrolments in such institutions that are accorded special status have less than five percent of the gross enrolment, over 3 crore; and, therefore, these institutions will have limited impact on quality of teaching and research in the university sector. Policy of transforming education must therefore encompass entire system rather than initiating ad hoc and selective approaches to improve performance of institutions. The seriousness and sincerity of the government to reform the system is exposed from the fact MHRD chose a ‘non-existent and non-operational’ institution for recognition of ‘Institution of Eminence’, while the universities that have produced statesmen who fought for Independence, ensured a vibrant and functional democracy, designed programs for making a deep dent into areas of poverty alleviation and liquidation of illiteracy, have been left out. Why?

Second, due to higher costs of technical and professional courses, students from economically weaker families would not be able to pay for the costs of education from their current or future incomes. In absence of adequate scholarships and government grants, education loan is not a viable option. As pointed out above, NPAs on account of education loan is high and rising due to unemployment or underemployment. Eventually, educational as well as income inequalities between those who can and cannot afford will perpetuate. In fact, educational inequality is perceived to be the major contributor to socioeconomic disparity in our society, which the government has not factored into its policymaking.


Third, as regards institutions’ abilities to raise funds through increase in fees and user charges are concerned, the private universities may continue to recover more than the costs of education, with or without quality assurance. They are already generating surpluses for institutional proliferation. As most private HEIs are established by the top business and industrial houses as well as leading politicians, they are allowed to ‘commercialize education’ in garb of spreading education.

Fourth, the public universities may be hit hard in the environment of highly politicized university campuses of the central universities, namely Allahabad, Aligarh, Banaras, Delhi and Hyderabad. The university authorities, led by the Vice Chancellors appointed by the Central government, would not be able to raise and recover the costs of teaching and research from the students, as every political party is very active to seize an opportunity to oppose the administration and disturb academic environment on one pretext or the other. Recall that the four-year employment oriented graduate program of the University of Delhi, which was a step towards linking education and training with the world of work, had to be discontinued due to political interference.

Interest free loans under HEFA: The public universities have been asked to take interest free loans from the newly established Higher Education Financing Agency (HEFA), which may cater for a handful of well established accredited institutions leaving a large number of institutions out of its purview. Moreover, with the proposed Higher Education Commission of India (Repeal of UGC) Act 2018 an attempt is made to scrap of funding powers of University Grants Commission (UGC). And, the responsibility of funding HEIs has gradually been taken over by the MHRD. In fact, the record of MHRD’s direct funding of institutions, namely IITs, NITs and IIMs is not entirely satisfactory. All the new IITs/IIMs continue to suffer for want of funds for recruitment of faculty, development of research infrastructure and for promotion of academia-institute interface. An equally important concern is about judicious allocation of funds among the states’ sector HEIs under the scheme of Rashtrya Uchhtar Shiksha Abhiyan (RUSA). The states are governed by different shades of political parties. Funding of institutions is bound to be politicized. Therefore, the responsibility of funding HEIs should be vested with an autonomous and professional body, which has unfortunately not been done.

To conclude, the purpose of raising above issues is to suggest that the New Education Policy, which is still in the making and in the process of adoption by the Modi government, must focus on: equalization of opportunities for quality education across the socioeconomic groups and regions; ii) channelizing required funds from alternative sources for promoting entrepreneurial education and training for empowering youth and to match their skills to global standards; and, iii) making concerted efforts for promoting research and innovation in the frontier areas of knowledge, which are critical for improving productivity and competiveness of economy in the global markets.

(Author is Former Member, UGC & CIC. Currently he is an Advisor at Global Yes Institute)