The logic behind subsidizing higher education ended decades ago. This is especially true in the case of courses where the job market is thriving. Two candidates for ending the run of freebies come to one’s mind immediately: management and engineering.
On Thursday, the Union government announced a fourfold increase in the fee charged from students at the Indian Institutes of Technology (IITs). This is a good start. Currently, a student pays Rs 50,000 a year as fees. This amount has now been revised upward to Rs 2 lakh. For a four-year engineering course, this translates to Rs 8 lakh. The cost to IITs is around that amount, implying a subsidy of Rs 6 lakh per student.
Were the government to leave matters there, the decision could have only been welcomed. The plan is to “recover” money from students once they gain employment after finishing their studies. This is to be done through a tripartite agreement involving students, IITs and employers. The money will be recovered in a staggered fashion.
The same result could have been achieved by charging students upfront. In case of management courses, where fees are much higher, students often borrow money from financial institutions to fund their education. Repaying the borrowed money is their problem and that of the lenders. Yet, the government could not resist the temptation to make the increase look like a levy on those who enter the big, bad corporate world.
Those who go into academia won’t have to pay extra.One reason for this is the government’s effort to engineer incentives. In recent years, there’s been a big expansion of IITs and Indian Institutes of Management (IIMs). This process was started without proper planning. There is no doubt that a growing economy needs better-trained and talented workforce, but that requires a certain emphasis on quality. If IIT and IIM graduates command high salaries, that’s directly linked to the quality of their training. This, in turn, depends on high-quality faculty at these institutions. In this impressive scheme, getting the right faculty was a key weakness.
By charging higher fees, the government wants to create incentives to attract these graduates to choose academic careers, hoping they will join the new institutes at a later date. The plan being to waive the recovery of the amount spent on their education. For a variety of reasons, this is unlikely to work. It’s quite possible that the best talent will continue to go where it does now—to the private sector. It will take more than a waiver to attract the best and the brightest to turn into teachers.
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