Why higher education in India must not bow to the market

Written by Madhu Prasad | Published on: December 14, 2015
as a whole has been in deep crisis for the past 25 years.

With the initiation of neoliberal economic "reforms" by the Narsimha Rao government in 1991, the process of privatisation of higher education and later the entry of 100% FDI in the sector was initiated as the state began to withdraw from directly funding higher education. There was a cumulative decline in funding as a percentage of GNP from 0.46% (1990-01) to 0.34% (2004-05) and in budgetary expenditure from 2.09% to 1.72%, which by 2004-05 was further reduced to 1.60%. In higher education alone, the decline as a percentage of GNP was from 0.46% in 1990-01 to 0.36 in 2004-05.[4] The trend accelerated over the period of the Eleventh Five-Year Plan (2006-07 to 2011-12). This resulted in opening up space for private higher educational institutions (HEI). In 2000-01 these constituted 42.6% of all HEI’s with an student enrolment share of 32.89%, but registered a more than 60% increase between 2007 and 2012 to reach 64% of all HEI’s, with a jump in the enrolment share from 54% to 59%.[5] The GER rose to 18%, up 7% from a GER of 12% at the start of the Plan.

Although under current regulations, private and FDI funded HEI’s must function as "not-for-profit" institutions, private funding in higher education is not philanthropic in character any more. It has increasingly become "investment" oriented and this means that students are now paying significantly higher costs for the education they receive. Individual private expenditure had risen by 10.8% in 2005-6. Poorer sections were hardest hit with a rise of 12.4%. The outcome has not been purely economic in character. The investment oriented approach has altered the purpose of higher education and hence the nature of knowledge itself. Education is viewed not only by private education "providers" but also by parents and students as a means to recoup their investments in the sector. Returns drive the former, but students are also lured towards higher-end placements in the job market and hence towards courses that facilitate this process. Like current policy makers, students, parents, media and society at large have now become accustomed to regarding higher education as a “private good” where the user-pays principle, however painful, appears to be appropriately applied.

The development of GATS constantly enlarges the scope of the liberalisation regime and prevents reworking of even those trade agreements that may prove to be detrimental to a country’s and its peoples' interest."

These are serious issues. Restricting higher education — on the one hand, by limiting access to those who can afford it and, on the other, by endorsing an instrumentalist view of the nature of knowledge — directly impacts the character and structure of higher education in India.
Yet policy makers have appeared indifferent to these disturbing repercussions. The failure of the state to meet its constitutional obligation to provide free and compulsory elementary education for decades, even after the implementation of an inadequate and discriminatory Right to Free and Compulsory Education Act (2009), is blamed on a supposed inherent inability of the state to provide adequately for education. Secondly, the responsibility for declining standards particularly in higher education is placed at the doorstep of fee controls and reservation policies, both state regulatory policies which have opened up some avenues for the marginalised and underprivileged. The solution offered by policy makers, government, media pundits and even sections of the intelligentsia is that the "market" alone can pull the education sector out of its present crisis. Raising the bogey of state responsibility and state regulation as the root cause of the problem has resulted in the central feature of the "reforms" process being the blatant promotion of unregulated privatisation in the entire education sector.
The role of the World Bank (WB) and other international agencies including the WTO has been significant in these developments. After WB announced in 1994 that higher education was a "private or quasi-private good" that merited no state subsidies (Higher Education: The lessons of experience. WB Report p3), the Finance Ministry in 1997 aggressively advocated subsidy cuts for what was dubbed a “non-merit good”. In 1998 MHRD minister