THE PRIVATISATION AND PRICING OF PROFESSIONAL EDUCATION THE PRIVATISATION AND PRICING OF PROFESSIONAL EDUCATION
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THE PRIVATISATION AND PRICING OF
PROFESSIONAL EDUCATION THE PRIVATISATION AND PRICING OF
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THE PRIVATISATION AND PRICING OF
PROFESSIONAL EDUCATION
With Special Reference to Medical Education
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G.G. Christo
Centre for Policy Research
Dharma Marg, Chanakyapuri
New Delhi 110021
October 1996
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THE PRIVATISATION AND PRICING OF
PROFESSIONAL EDUCATION
With Special Reference to Medical Education
M. S. Rsma-sh MaEcs!
College Dcno&lc>re-54
7 1
.
RECEIVED
G.G. Christo
Centre for Policy Research
Dharma Marg, Chanakyapuri
New Delhi 110021
October 1996
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QUOTES
The transition of a society from backwardness to advance is accompanied by the
change of education from a consumption luxury to a productive investment.
- CD Deshmukh
If you think education is expensive, try illiteracy
- Derek Bok
The private sector should be involved and indeed encouraged to augment the
much needed resources in the field of education, thereby making as much
progress in achieving the constitutional goals in this respect.
- Constitution Bench of the Supreme Court of India
THE PRIVATISATION AND PRICING OF PROFESSIONAL EDUCATION
With Special Reference to Medical Education
Table of Contents
Foreword
1.
Introduction
1
2.
The case for privatisatioh
2
3.
The initiatives of the Supreme Court
5
4.
The cost of medical education
10
5.
The admission of foreign students
20
6.
The financing of student fees
26
7.
The social dimension
29
8.
Regulation of private professional education
31
9.
Summary of recommendations
36
Acknowledgements
37
References
38
FOREWORD
The university system in India is unable to cope with the scale of demands made
on it. Colleges are overcrowded, faculty and facilities are inadequate and government
grants do not cover budgetary deficits. Six per cent of the GDP is being proposed to be
allocated to education in the Ninth Plan, compared to 3.71 per cent in the Eighth Plan.
But a major portion of the increase is earmarked for primary education. For universities
the resource crunch will continue, and indeed is likely to grow.
In this era of privatisation and larger role for the people themselves, it is important
to consider the potential contribution of the private sector in higher education.
The
introduction of the Private Universities Bill in the Rajya Sabha in August 1995 is a step
in the right direction.
This study examines several aspects of the privatisation of professional education
and offers certain strategies to ensure the economic viability of private colleges,
preserving at the same time, the social responsibilities and quality of educational
institutions.
On 9 August 1996, the Supreme Court handed down a judgement which called
upon the Central and State governments and statutory councils to come up with a
scheme to regulate admissions and fees in private professional colleges. In the light of
this development, this study assumes added significance. It is our hope that it will help
more focussed and informed debate on the issue leading to appropriate policy action.
September 'I2, 1996
Centre for Policy Research
New Delhi 110021
Dr VA Pai Panandiker
Director
-•V> •'
1.
INTRODUCTION
The Unni Krishnan judgement delivered by the Supreme Court on February 4,
1993 has come to be known as the "Capitation fees case". It was a landmark judgement
because it represented the first comprehensive attempt by any branch of government to
address the controversial facets of private professional colleges. But this judgement
served a wider purpose by bringing into focus the larger picture of private professional
education. After the exhaustive decryment of the unsavory practices of capitation fee
colleges, in which politicians, academicians and the media all lent their shrill voices, there
has since been a more sedate dialogue on the benefits of privatisation and other
economic aspects of higher education.
The University Grants Commission, the Association of Indian Universities and the
central and state governments have delivered pronouncements of concept and policy
changes that mark a distinct departure from the traditional attitude of state-provided
higher education. Evidence of this new thinking is the introduction of the Private
Universities Bill in the Rajya Sabha, changes in the fee structure at the Indian Institutes
of Technology and the introduction of NRI quotas in government medical colleges.
These developments are not only reflective of hard realities, such as the resource
crunch facing the universities but also of a new demeanour of open-mindedness. The
Supreme Court had as its narrow objective the regulation of capitation fee colleges but
unwittingly achieved setting in motion the bandwagon of pragmatism in professional
education.
1
--An‘-.i.’ 'i-
••
2.
THE CASE FOR PRIVATISATION
Even in this era of privatisation as a national policy there is still resistance to the
privatisation of higher education. Since education in India originated from religious orders
and the gurukul and gurushishya relationships, any form of compensation, other than
nominal, is even today looked upon as mercenary. "Education has never been commerce
in this country. Making it one is opposed to the ethos, tradition and sensibilities of this
nation"1 While costing is a well-accepted exercise in industry and agriculture, pricing of
education has been alien to our culture. Of course, these contentions are not trotted out
when it comes to medical care, arguably the most sacrosanct priority of the social sector.
When one is sick there is a rush for the best private nursing home.
The other argument proffered is that it is the government’s responsibility to provide
higher education. But the constitutional right to education is only upto the age of 14.
Education beyond that, as underscored in the Unni Krishnan judgement must be within
the capacity of the government.
The public has a right to demand free, universal primary education. But we find
that urban parents are quite prepared to pay capitation fees (in the guise of development
fees, building fees etc.) for admission of their children to elementary or high schools.
Because of the craze for English-medium education, profit-minded entrepreneurs set up
school sheds on backlots with convent sounding names and do good business. But when
it comes to nominal fee increases in college, students go on strike.
This patent hypocrisy is also demonstrated by the flourishing of tutorial colleges
and coaching academies where substantial fees are collected for unregulated academic
programmes. The phenomenon of parallel colleges is unique to our country. Fees are
cheerfully paid for driving schools and computer institutes but when it comes to formal
education there is fierce resistance to reasonable fees.
2
But apart from constitutional rights and public expectations of state - provided
higher education there are other issues that recommend an expanded role for the private
sector in higher education.
2.1
Optimal utilization of government resources
Six percent of the GDP has been allotted to education for the Ninth Plan compared
to 3.7% for the Eighth Plan. For "Education for All by 2000" to be remotely approached
further resources must be provided for primary education. Forty-four percent of primary
schools do not have pukka buildings and 32.7% do not have blackboards.2
Educational backwardness in India goes side by side with social and economic
backwardness and some of the significant indicators of development such as infant
mortality rate, fertility rate etc. are correlated to education".3 The returns of education to
society in terms of development are more pronounced from primary and secondary
education than it is for tertiary education in which the prime beneficiary is the individual.
About 15% of the education budget goes on tertiary education though only 6% of
all students are in colleges and universities. Added to this is the unacceptable
phenomenon of receding revenues from fees. The education of college students is being
increasingly subsidized. In 1987-88 colleges fees accounted for only 1.68% of the cost
of higher education having diminished from 15% in the 1950s. The Punnayya Committee
(1992-93) set up by the UGC recommended that tuition, admission, examination, hostel
and other fees be raised with immediate effect and that the universities generate 15-25%
of their recurring expenditure but the report is only gathering dust.4
Who are the beneficiaries of this largesse? A survey by the UGC in 1981 revealed
that 70% of university students were from the top 20% of income earners.5 Since indirect
taxation is paid mainly by the poor, "university education is acting as a conduit for
transferring resources from the poor to the rich", according to Malcolm Adisheshiah.6
3
2.2
Effieieney and innovation
Accordir
ln3 to public perPQnt.
Perception has
-'--CenCV
educationists hav,
quality at lower
ar|d to remain eompetltive
r
Pr'''a,e CC"e^ must chaPr°V'deS h6""
be’naHy-conscious Since th
har9e bigher fees
a„d have <he
“are not ha„acappM
,7 tW'm0Vin9 bu^t'K r
abS“b
1
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Information and
tech„„,gyj they are able to k
decision■making
requ/rements Private ■
■ ^nvate inst/tutii
ms tend to network more efffci
01
a,'°nal
Internationa,
or9anizations.
'ently and innovatively With
In a
^eent surrey ofmed(ca|
t0P 20 of the
COlle9es. five private
cation though the c0Vera" mtio of priVate t0
's small.6 Also among medical co
„eges h
«n8 similar Cities a„d
ones are
run more economically.9
^7'“' inS“Mons
acdards the private
It is
necessary to eg
c°ntribute *° ^e development ot higher
°< edocafc„a,
ontreprene urs to
,7''°" "lf^ provide
9°od education
cal!s 'or appropriate
and
^s, ensum
AC (claus
e 2c Of section
that
no
student
secures
^Udy by reason econonti,
12) which
admission
to
a
P*e,and thereby preyen,sa
°m secur,n9 admission.
course of
more meritorious
candidate
admit on meri' Thereisalack0(reaL
be invo^^"*"0" benCh 01 ,he ^eme Coup „bs
°f—d
Ms respec-y
‘
the ::z^r,e——
Progress In achieving the r
,n
Constitutionai goafc i„
4
3.
THE INITIATIVES OF THE SUPREME COURT
The long arm of judicial activism in the 1990s extended to professional education
with the Supreme Court mandating regulations that normally lie in the preserve of
government, statutory bodies and college administrations. The court deemed it fit to
prescribe schemes that encompassed admissions, fee structures, quotas for SC/STs and
NRIs, loan schemes and institutional subsidies.
Given the lethargy of the statutory councils, the undisguised nexus between state
governments and capitation fee colleges and the ensuing erosion of standards and ethics,
there was widespread commendation of the Supreme Court’s intervention by parents,
academicians, the media and the general public. The court had certain limitations: firstly,
inadequate inputs from the UGC, MCI, AICTE and government, especially in regards to
the cost of education, and secondly, inadequate time because of the impending opening
of colleges. In spite of deficiencies in the judgements, the groundwork for the regulation
of private professional colleges was firmly laid.
A brief analysis of the major judgements are presented. More detailed accounts
can be found elsewhere.10’17
3.1
The Mohini Jain Case (1992)
For the first time, the Supreme Court gave a directive principle the status of a
fundamental right. The right to education is only a directive principle. Article 45 of the
Constitution states that the government shall provide free and compulsory primary
education to all children upto the age of 14 years. The two-judge bench went a step
further and averred that there is a right to all levels of education and that this was
concomitant with the right to life guaranteed by Article 21 and the dignity of the individual
as expressed in the preamble of the constitution.
As capitation fees result in poor
students being denied admission, such fees infract Article 14 which guarantees equality
of opportunity.
5
■ •'/
The judgement was a severe blow to the privatisation of education and brought to
the fore difficulties in the definition of capitation fees and as costs of education in private
institutions had to be met by student fees, the future of private colleges were left in doubt.
But a dilemma was now faced by the state since the implication was clear that
even higher education had to be provided to all citizens and each person could perhaps
demand a professional course of his choice. No mention in the judgement was made of
Article 41 which provides that the state shall make effective provision for securing the
right to education within the limits of its economic capacity and development. Since the
state at present is not economically or developmentally capable, the state could
recognise/approve private institutions to impart higher education. Therefore the judges
should have clearly defined the role of private professional education and set out a
framework for their fees and admissions. For if private colleges must charge the same
fees as government colleges, then one could also demand that private hospitals must
charge the same fees as government hospitals.
3.2
The Unni Krishnan Case (1993)
The judgement in the Mohini Jain case brought sharply into focus the issue of
capitation fee colleges but raised practical problems and left grey areas. Under threat of
"decapitation" the managements of some of these colleges brought writ petitions before
the Supreme Court. These were collectively disposed of by a five-judge constitution bench
in what has come to be known as the "capitation fees case". The main features of the
Unni Krishnan judgement were:
a.
The right to education upto the age of 14 was affirmed. Beyond that the
state has only a limited responsibility.
b.
The role of private institutions in imparting higher education was granted
and also the necessity to charge fees from their students to meet the cost
6
of running their institutions. This provision tacitly approved the concept of
self-financing colleges.
c.
A scheme for the admission and fees for students in three categories: 50%
free seats and 50% payment seats (later amended to include 10% NRI). In
each category candidates were to be admitted on merit inter se.
The Unni Krishnan judgement made notable departures from the Mohini Jain case
On the whole it was found to be implementable and the existence of private colleges were
ensured for the time being. But it raised several new thorny issues.
3.2.1
Legitimising self-financed education was a progressive move. However in its
anxiety to maintain a notion of social justice, a scheme of free and payment seats
was evolved so that a rich student would not "steal a march over a poor
meritorious student on account of his economic capacity". In this scheme the
payment student would not only pay for his own seat but also finance the cost of
a “free seat" classmate. When one considers the constitution bench’s earlier
statement that higher education is not a fundamental right, it seems unreasonable
to compel a citizen to pay for the education of another.
3.2.2 The scheme faltered in imposing the same fee structure for all colleges irrespective
of the variation in operating costs from college to college. A medical college with
excellent facilities, a full-time faculty and having its own multispecialty teaching
hospital will have higher operating costs than one with meagre facilities, honorary
faculty and which uses a government hospital for clinical teaching. For the latter
category the fees prescribed by the court was an undeserved bonus while good
colleges could not meet their recurring expenditures and were forced to prune
faculty, library facilities etc and to raise patient fees.
3.2.3 The judgement also floundered in its implementation. The inefficiency and
corruption of the state governments exposed and compounded the weaknesses
7
of the scheme. There was large scale bribery for allotment of seats and choice of
college. There have been repeated delays and errors in the filling of seats. In the
two years since the scheme came into force almost 5000 seats have remained
unfilled in Karnataka.
3.2.4 The statutory bodies were assigned the task of formulating a coordinated national
policy on admissions and fees. Work has hardly begun on this task resulting in
confusion over actual costs of professional education and whether capital costs are
to be included while computing student fee structures.
3.2.5 No provision for a student loan scheme was conceived. Some meritorious students
who obtained payment seats were unable to join because of economic constraints.
3.2.6 No mention was made regarding the applicability of the judgement to minority
educational institutions.
3.3
The TMA Pai Foundation case (1995)
Because of some of the unresolved issues of the Unni Krishnan case a two-judge
bench issued interim orders with the following notable features:
a.
The scheme of fees was modified. Noting that "contrary to the intention of
the scheme, boys from well-to-do families were taking free seats, leaving
the payment seats to students from the rural areas and backward
communities" the court reduced the disparity in the fees of free and
payment students and ordered the dispensation of low interest loans to both
categories of students. A differential fee structure for medical colleges was
made depending on whether they had their own teaching hospital or used
government hospitals. The quota for NRI students was raised to 15%.
Overall the fees revenues for the colleges were raised.
8
b.
All free seats were reserved for domiciled students from that state.
c.
A subsidy of Rs 5000 per student per year was granted to all medical
colleges in India to be paid by the central government.
In its haste to issue the modified scheme in time for the new academic year the
court unwittingly strayed into previously unentered territory. These inadvertent excursions
have important implications and far-reaching consequences.
3.3.1
The concept of self-financed education based on cost that was admirably
espoused by the Unni Krishnan bench received a setback on two counts. Firstly
the order to the nationalised banks to dispense low interest loans is a subsidy paid
for by the exchequer and taxpayer. Secondly the grant to be paid to the private
colleges by the central government had imposed an inexplicable burden on the
state. These measures will cost the taxpayer Rs 20 crores in the first year of the
scheme for medical and dental colleges alone and when in full stream will cost the
exchequer more than Rs 100 crores a year.
3.3.2 Government largesse in the scheme has been extended to all colleges including
14 unrecognized private medical colleges and 26 unrecognized dental colleges.
Should substandard colleges receive the same financial approbation as good
institutions?
Considering the importance of the issues, the gravity of their implications and the
short time frame, the Supreme Court has done a magnificent job in bringing together the
constitutional, legal, administrative, academic and financial aspects and ramifications of
a complex subject. Not only that it has entered strongly into the implementation
modalities.
The loose ends of partially unresolved matters were now to be tied up by the state
governments and statutory bodies.
9
/
4.
A-.:? ■:
THE COST OF MEDICAL EDUCATION
‘ It was only upon the directive of the Supreme Court that the statutory bodies took
up the costing of professional education.
The Medical Council of India commissioned
AF Ferguson & Co. to undertake the exercise.
The cost of medical education is compounded by the expense of operating a
teaching hospital which is essential for the training of medical students. However, some
private medical colleges utilize government hospitals and their medical staff and therefore
have little or no expense on those accounts while most of the better private medical
colleges run their own multispecialty teaching hospital which adds appreciably to the cost
of medical education. However it is important to point out that hospitals themselves have
a social responsibility to serve poor patients, especially if they are to be used as "teaching
cases". But they are also to be run in a financially competent manner. Therefore it is not
justifiable for the entire cost of running the hospital to be included in the computation of
the cost of medical education.18
4.1
The Ferguson Study
Ferguson added 30% of the hospital cost to the medical college cost in accordance
with the norms laid down by the MCI. For the study six private medical colleges were
selected and categorized as A, B or C according to the quality of facilities, faculty,
academic programme and hospital services. (Table 1)
10
• in
Table 1
Criteria for categorisation of medical colleges
1.
Levels of academic programmes: UG, PG, higher specialities
2.
Physical facilities and quality of maintenance
3.
Academic standards
4.
Full time faculty and remuneration
5.
Hospital facilities
6.
Research activities
The six institutions were categorised (Table 2) with A representing the highest
level. The apex court has recognised that the cost of education may vary, even within
the same faculty from institution to institution. The facilities provided, equipment,
infrastructure, standard and quality of education obtaining may vary.
Table 2
Categorisation of selected private medical colleges
College
Category
Christian Medical College, Vellore
A
Kasturba Medical College, Manipal
A
Dayanand Medical College, Ludhiana
B
Sri Ramchandra Medical College, Madras
B
Pramukhswami Medical College, Karamsad
C
JSS Medical College, Mysore
C
11
Colleges in category C
had government hospitals made available to them for
teaching, therefore the yearly cost per student for the MBBS is less as reflected in Table
3. The hospital expenditure is also included.
Table 3
Cost of MBBS training by category
Category
Full Course
Ps in lakhs
Per year (1994-95)
in lakhs
A
14.25
3.20
B
10.00
2.20
C
8.50
1.20
For medical colleges which have their own teaching hospitals (Category A & B) the
level of hospital income will affect the overall cost of medical education. If the hospital
income is substantial and the student intake is small e.g. CMC Vellore, the entire MBBS
course may cost no more than Rs 2.3 lakhs but if hospital income is nominal and the
student intake is large e.g. KMC Manipal the cost for the MBBS course works out to Rs
9.35 lakhs. If the MCI norm of including 30% of the hospital cost is applied the cost at
KMC Manipal is reduced to Rs 6.24 lakhs.
4.2
An alternative scheme for the categorization of medical colleges
Categorizing medical colleges could be accomplished by considering: student
admissions, academic programmes, teaching hospital facilities and financial aspects.
Based on these criteria, medical institutions can be grouped into four categories: A, B,
C, & D. This scheme is more comprehensive than the Ferguson study and includes both
government and private medical colleges19.
12
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Student admissions
4.2.1
The modus of selection, the composition of the applicant pool and the ability to
.
attract foreign students are the prime components of the admission process. For
the premier medical colleges having their own entrance examinations at multiple
centres is a necessity because of the thousands of hopefuls who wish to enter a
prestigious institution. Admissions to these institutions are generally on an all-lndia
basis, but there are some reserved seats: for SC/STs in the government medical
college and for minority students in the church-operated and other minority
institutions.
A substantial number of foreign students apply to the self-financing private
institutions. A few are admitted to central government institutions on government
scholarships. Because of their economic capacity foreign students seek admission
to the best medical colleges.
On the basis of the character of student admissions medical colleges can be
grouped as in Table 4.
Table 4
Categorization of medical colleges by student admissions
Entrance exam
Applicant pool
Foreign student applicants
A. Own entrance exam
all-lndia
many foreign students
B.
Govt, entrance exam
partly all-lndia
few foreign students
C.
Govt, entrance exam
state
no foreign students
D.
Govt, entrance exam
state
no foreign students
13
4.2.2 Academic programmes
The range of courses, extent of research activity and the quality of support
facilities varies considerably among medical colleges. Category A colleges will
have higher speciality training such as DM and MCh and degree courses in
paramedical disciplines. Commitment to research is manifested in specialised
research labs and substantial publications. Support facilities for academics and
research are well developed. Table 5.
Table 5
Categorization of medical colleges by academic programmes
Levels of courses
Research
Support facilities
A.
Undergraduate
research labs
library: computerized services
Postgraduate
PhD programmes
literature search
higher speciality
external grants
international journals
back volumes
allied health
substantial publications medical education department
conferences
diagnostic labs
International affiliations
undergraduate
departmental
library: some international journals
postgraduate
some publications
some grants
medical education department
diagnostic labs
C.
undergraduate
minimal research
and publications
library: minimal facilities
D.
undergraduate
minimal research
and publications
library: minimal facilities
B.
14
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4.2.3 Teaching hospital
. To a large extent, the quality of a medical college is determined by the quality of
the clinical teaching facilities. The best private medical colleges operate their own
highly specialized tertiary care hospitals. In addition to the main specialities, these
hospitals will have sophisticated care units for cancer, burns, fertility etc.
Diagnostic services and patient amenities are also highly developed. Based on the
facilities of the teaching hospitals, medical colleges can
can
Table 6.
Table 6
be grouped
as
Categorization of medical colleges by hospital facilities
Level of clinical
Special centres services
Diagnostics
A. tertiary multispeciality
cancer, burns
transplant, prosthetics
CT, MRI, cardiac
cath, endoscopy
labs: clinical
biochemistry, virology
private wards
health insurance
dietary section
B. multispeciality
none
ultrasound
specialized x’ray
private wards
C. few specialities
none
standard x’ray and labs
semi-private wards
none
minimal x’ray and labs
no private wards
D. general
Patient amenities
4.2.4 Financial aspects
Three important variables contribute substantially to the balance sheet of medical
colleges (Table 7). Firstly whether a college is self-financed or receives
government grants. The church-operated colleges draw
sponsoring churches. Most of the other private colleoes
15
on grants from the
are tuition driven.
in
The second factor is faculty compensation. Private colleges which operate their
own hospital generally have full time faculty on UGC scale salaries who are not
permitted private practice. Some of the central government institutions are in this
category. For these colleges, the salary expenditure is high. Some private colleges
utilize government hospitals for clinical teaching. For these institutions and the
state government medical colleges, the salary burden is much lower since the
faculty are either on state government pay scales or draw an honorarium and are
permitted private practice.
The third variable is the ownership of the teaching hospitals.
Private teaching
hospitals have more facilities than government hospitals. At the same time they
cannot charge high fees as this will lead to a fall in patient numbers and reduce
the quality of clinical teaching. So the combination of costly facilities and low
revenues from patients add a considerable financial burden to these medical
colleges.
Table 7
Categorization of medical colleges by financial aspects
Financing
Faculty salary
Hospital ownership
Annual cost
per student
A.
Self-financing
no govt, subsidy
full time
UGC scales
private
Rs. 2.25 lakhs
B.
Self-financing
no govt, subsidy
full time
UGC scales
mostly private
Rs. 1.75 lakhs
C.
Subsidized
honorary
mostly govt.
Rs. 1.25-1.50 lakhs
government
Rs. 0.75-1.00 bfchs
state govt, scales
D.
Subsidized
honorary
state govt, scales
16
4.2.5 Other criteria
In addition to the four key areas already outlined, certain other criteria could be
evaluated for the categorization of medical colleges into the four groups.
a.
The mission, goals and objectives of an institution are a useful yardstick to
evaluate its functioning.
b.
Continuing academic development such as new courses, innovative
methodology of teaching,
faculty
development,
research
initiatives,
collaborative programmes with universities abroad, consultancies and
organization of scientific conferences must be given weightage
c.
Management information systems ; the development of administrative,
financial,
academic,
medical,
clinical
and
research
databases
is
indispensable to bringing efficiency of operations to optimal levels.
d.
Cost: efficiency indicators such as percentage of total budget for academic
purposes, proportion of budget for administrative and salary costs,
expenditure on student amenities, allocations for research should be given
consideration.
4.3
Strategies to reduce the cost of medical education and the fees
For private colleges which receive no government grants, recovery of the cost is
essential. In the USA, tuition fees are about four times higher in private universities
compared to state universities.20 The annual cost of a medical education is high
and the fees worked out on the basis of cost would be out of reach even for most
middle class families.
17
S. 4* • J AV
4.3.1
J
• ’• f J
*r
Increase patient fees
In order to reduce the financial burden of the teaching hospital, fees for patient
services can be raised. This however will result in a decreased number of patients
so that there may not be adequate patient material for clinical teaching. Poor
patients tend to go to large teaching hospitals providing adequate cases for
teaching. Paying patients are less willing to be examined and treated by
undergraduate and postgraduate trainees. So it is not feasible to raise patient fees
beyond a point and a large proportion of beds in a teaching hospital must remain
free or heavily subsidised.
4.3.2 Admission of foreign students and NRIs
There are.many positive aspects to the admission of foreign students and children
of NRIs. These are elaborated upon in the next section. An important benefit is the
subsidy of the education of Indian students by their foreign/NRI classmates who
pay higher fees. Differential fee structures for out-of-state and foreign students are
used at most universities in the USA and UK.
Prior to the Unni Krishnan judgement private medical colleges were permitted to
admit upto 50% foreign students. For foreign students the advantages were low
cost, high quality education and the fact that degrees from several Indian medical
colleges are recognized in the UK, USA and other countries. This scenario
changed drastically with the Supreme Court fixing the ceiling on NRI/foreign
students at 10%. This had the effect of reduced revenues for private medical
colleges and hence increased cost of education for Indian students.
Kasturba Medical College, Manipal has been successful in attracting foreign
students over the last thirty years. They have estimated the variable subsidy
obtainable by Indian students depending on the percentage of foreign/NRI students
admitted. (Table 8).21
18
Table 8
Subsidy of medical education by foreign/NRI students at Manipal
Cost per student per year = Rs 1.39 lakhs
Cost per student for full course = Rs 6.24 lakhs
Plan
Category
of student
No. of
students
Fees-full course
(4!/2 yrs)
Fees-per year
A
Foreign/NRI
10%
$ 50,000
$11,111
Indian
90%
Rs 5.18 lakhs
Rs 1.15 lakhs
Foreign/NRI
15%
$ 50,000
$ 11,111
Indian .
85%
Rs 4.50 lakhs
Rs 1.00 lakh
Foreign/NRI
25%
$ 50,000
$11,111
Indian
75%
Rs 2.93 lakhs
Rs 0.65 lakh
Foreign/NRI
30%
$ 50,000
$ 11,111
Indian
70%
Rs 2.03 lakhs
Rs 0.45 lakh
B
C
D
*fees for foreign students as per Supreme Court scheme which has permitted a 15% quota for NRI/foreign
students (Plan B in table)
The objection is often heard that foreign students deprive deserving Indian students
of seats. But if foreign students are not admitted, the fees would be prohibitively high and
only rich families could send their children to private medical colleges. With foreign
student subsidy, medical education can be accessible to lower income groups. A scheme
for the financing of fees is discussed in a subsequent section.
19
5.
THE ADMISSION OF FOREIGN STUDENTS IN INDIAN UNIVERSITIES
India was once considered the land of knowledge and enlightenment. In ancient
times scholars from all over Asia and Europe used to flock to Taxila, Nalanda and other
Indian centres of learning. Apart from arts, culture and religion, these scholars came to
study medicine, law and martial sciences.
But despite having a vastly expanded university system and a historical advantage,
modern India has failed to provide international or even regional leadership in higher
education. From the surrounding countries of Asia and Africa only students who cannot
afford to go to the West or Australia come to India.
5.1
The example of other countries
With 209 universities, 8200 colleges, 2.5 lakh teachers and 46 lakh students, the
•Indian higher education system is the second largest in the world. However in terms of
attracting foreign students, India lags behind many smaller countries.
The United States is by far the most successful country in attracting foreign
students. But other countries such as Australia, Canada and the UK aggressively market
their universities abroad through education counselling services and recruitment fairs with
the active cooperation of their diplomatic missions abroad. In India by comparison the
number of foreign students is minuscule. (Table 9)22
20
Table 9
University enrolment in selected countries*
Country
No. of
universities
USA
3542
77.51
4,38,000
5;65
UK
97
8.23
85,000
10.3
Australia
36
5.75
52,540
9.1
Canada
64
5.69
37,478
6.6
India
209
46.11
13,866
0.3
No. of students
(lakhs)
No. of foreign
students
% of foreign
students
* Figures for 1992 except India (1993) and USA (1991)
The major efflux of students is from developing countries to English-speaking
developed countries. Within this, the major movement of students is from the developing
Commonwealth countries to the UK, Australia, Canada and the USA. Foreign students
are expected to pay full fees and in the UK and Australia, pay up to double the fees
charged of local students. Students from the poorer countries of Africa and Asia seek
higher education in countries like India, where fees and living expenses are cheap and
there is generally no fee differential for foreign students.
5.2
The advantages of India
Studying in India offers several advantages to foreign students, especially those
from developing countries. Fees and living expenses are much less than in the Western
countries and Australia. The cultural environment and lifestyle in India is similar to that
of most third world countries. India is considered a safe, conservative society
21
30
'•••if
: ’
The medium of instruction is English which many Asian and African students wish
to master. Training, especially technical education received in India is relevant to
developing countries.
Finally, parents and sponsoring governments are assured that students studying
in India will return home - unlike many students who go to developed countries.
5.3
Economic and other benefits
Perhaps the most important benefit of foreign students is revenue. The economic
implications are substantial. In 1992, the USA earned $6.1 billion, Australia $A 1.3 billion
and the UK £ 1.5 billion from foreign students. Tuition fees accounted for 30-40 percent
of these revenues and academic-related costs and living expenses for the rest.
India should capitalise on these advantages, market Indian universities abroad and
facilitate the entry of foreign students. The former chairman of the UGC, Prof Ram Reddy,
estimated that at least a lakh of foreign students can be attracted to India, provided the
best institutes are properly marketed.23
With this number as the basis for calculations, the annual earnings to the country
can be estimated (Table 10).22
In the Eighth Plan, the outlay for higher education was Rs 1,560 crore. This entire
amount can be raised from foreign student revenues. Rs 1,500-2,000 crore annually in
foreign exchange earnings is the equivalent of a major export industry. One study has
estimated that if 10% of students in Indian universities and professional students were
foreign the annual earnings would be Rs 9100 crores per annum.24
22
i Ji
*•
Table 10
•
.. »• 4.
/f
Projected number of foreign students and earnings
Arts, science
Commerce, management
Law
Engineering
Medicine
Agriculture
Total
Indian
students
Foreign
students
27,69,381
40,000
1,00,000
400
10,09,832
30,000
2,00,000
600
2,44,388
10,000
2,00,000
200
2,25,944
15,000
3,00,000
450
1,56,777
3,000
6,00,000
180
48,908
2,000
1,00,000
20
44,55,230
1,00,000
Annual spending
per student
Total
(Rs in crore)
1850
1992 enrolment
The revenues from foreign students can be used to ease the financial crunch faced
by Indian universities, improve academic facilities and subsidize the
students.
23
cost of Indian
Apart from the economic advantages, India would gain in global and regional
influence and goodwill and become a major provider of higher education. Many Asian and
African countries, especially the smaller ones have poorly developed university systems
and would look to Indian universities for the higher education of their youth.
At the same time Indian students will not be deprived if 10% supernumerary seats
for foreign students are created in universities and professional colleges. An extra ten
percent of students will not unduly strain the existing infrastructure.
5.4
Export of higher education
Professional education in India has proven to be accessible and affordable for
foreign students, especially for those from Malaysia, Middle East, and South Africa. In
these countries higher education training facilities are limited and certain ethnic groups
are favoured for admission to universities. Many NRI families abroad, especially those
from English-speaking industrialized countries are also keen to send their children to
study in the motherland and hopefully to become accultured to their Indian roots in the
process.
In the last two decades the number of foreign students seeking admission to
medical colleges in India has increased progressively and private institutions have been
quick to skim this market. Government medical colleges have decided not to lag behind.
On October 12, 1995, the Union Minister for Health announced a plan to introduce seat
quotas for NRI students in state-run medical colleges. Tamilnadu was the first state to
implement the scheme and created an additional 105 MBBS seats for NRIs for the 1995-
96 academic year. Ten students joined in the first year paying fees ranging from $65,000
to $95,000, the higher fees being charged for the Madras city colleges.
24
•_
••
; •
\
v
‘
■
■’ ’
................
’
•
“ ■ ' A..'? ’
The students were admitted on merit through an entrance examination conducted
by Anna University. The scheme envisages the utilization of NRI fees for improving the
facilities of medical colleges and teaching hospitals. When the programme is in full stream
the annual earnings will be approximately Rs 30 crores. This year the Tamilnadu
government will upgrade student amenities, add CD-ROM services for the Madras
Medical College library and buy medical and surgical equipment for the cardiology and
neurology departments. The Central Council of Health Departments, an apex body of
health policy makers from all the states has endorsed the Tamilnadu scheme.25
The NTs and IIMs are also considering schemes to admit NRIs/foreign students
who will pay higher fees in foreign exchange. These schemes are based on
recommendations in the Eighth Five-Year Plan document.26
25
6.
THE FINANCING OF STUDENT FEES
"The National Colloquium on Right to Education as a Fundamental Right" held in
1992 and sponsored by the UGC and the Association of Indian Universities had
recommended that "Higher education, especially technical and professional education
must pay for itself. Private gain from this kind of education is more pronounced than
public good. The beneficiaries should therefore bear the full cost worked out on critical
evaluation of the relevant qualitatively acceptable and cost-effective institutions."27
In fact, in a significant judgement in May 1995, the apex court allowed the Kerala
government to set up self-financing colleges with 100% paid seats, making a significant
departure from the Unni Krishnan scheme. An expert committee had recommended a 3550 per cent hike in the country’s premier institutes of technology, the six IITs.28
Apparently there is a groundswell of opinion that within the broad spectrum of
higher education, professional and technical education should be self-financing. When
students pay for their education, they will also demand better academic facilities and
standards.
Even in countries like Great Britain where there is heavy subsidy of higher
education, tuition fees have doubled since 1990-91, correspondingly reducing direct
government funding.
"The change is intended to improve the performance of the
institutions, by making their funding depend upon their ability to attract students in
competition with one another" 29
New systems of student loans have been introduced
which are repayable when the earnings of the graduate reach a level of 85% of the
national average wage and with a repayment period of 5 - 10 years.
To enable equality of opportunity, the most feasible option is to make educational
loans available to all students. Students should pay on admission and annually a
minimum amount, say 25% of the fees and the remaining 75% can be in the form of a
26
soft loan repayable in instalments after graduation. The interest rates may vary, being
higher for professional courses, such as medicine and engineering in which future careers
are more lucrative.
Free seats with nominal fees should be reserved only for the constitutionally
permissible classes and for the poorest of the poor. Even for these students there should
be some recompense to society. The fees and loan, or the free seat, could be amortized
by a bond to work in government service. There are 3,593 vacancies in primary health
centres (PHCs). These could be staffed through this scheme. In the USA, federal loans
can be reduced or repaid if the medical graduates work in PSAs (physician shortage
areas) or on Indian reservations.
Education Development Bank
To encourage entrepreneurship and enterprise in different fields the government
has set up lending institutions such as IDBI, ICICI and NABARD.
Similar lending
agencies for the development of professional manpower should also be established
To set up the required corpus fund the central/state governments may divert some
of the present subsidies being given to professional institutions.
In any case the
institutions will receive enhanced revenues from tuition fees. After four to five years loan
repayments will begin and within 20 - 25 years the bank will have a revolving fund.
The loan amount advanced to each student may be determined on the basis of the
family’s economic capacity. Up to 75% of tuition fees, books, board and lodging may be
loaned. The interest rate should be low, say 4 - 6% and may vary depending on the
discipline being studied. Repayment should begin after the graduate starts working. - For
professionals with a slow career graph e.g. doctors the repayment period may be
stretched out for which simple interest may be changed. Students should have the option
of repaying or reducing their loans through government service rf appropriate opportunities
are available.
27
•t'.y t»; y. Z ;•;. Ay .> t ;x .••.■•
Such loan schemes may attract the criticism that massive defaults may occur.
Hence the collection system should be efficient and free from political interference. The
loan recipients may be required to take secondary insurance in favour of the loan agency.
A national indexing system to monitor the geographic and employment status of
graduates may be utilized. To increase the efficiency of repayments, factoring agents or
collection agencies can be considered.
28
’’'/■’J"1';
7.
THE SOCIAL DIMENSION
For India to move towards an egalitarian society, ensuring equality of opportunity
to obtain an education is an important priority. At the time of Independence the founders
of the nation made two solemn promises which are enshrined in the constitution. Firstly
the right to education up to the age of 14 and secondly the guaranteed entry of
underprivileged castes and tribes into all levels of education.
It is a matter of national shame that the first promise of free and compulsory
primary education has remained largely unfulfilled.
Half a century after Independence
barely half of India’s population is illiterate and by the year 2000 there will be 300 million
illiterates in India (approximately 34 percent of the world’s illiterates).30 This failure of
national education policy has assumed staggering proportions.
Even minimum
programmes such as Operation Blackboard have yielded scanty results.
The reservation of seats for SC/STs in higher education has been only a partial
redressal of social inequities.
To fill the quotas substandard students are perforce
admitted. Another criticism is that among SC/STs it is the wealthy, influential, city-bred
students (creamy layer) who bag the reserved seats, especially those in professional
colleges.
Studies need to be conducted to examine the benefits of these quotas for
backward classes.
All the same, the National Policy on Education (NPE) like its predecessor reports
continues to loftily highlight "Education for Equality".
In the implementation of such
reports and constitutional mandates quotas for SC/STs continue to be allotted. Certain
states e.g. Tamilnadu have enhanced these quotas up to 69% and Karnataka attempted
to increase educational quotas upto 72%. No concerted effort has been made by central
and state governments to legislate preferences within these quotas for women or for rural
students nor has any attempt been made to allot reserved seats only to poor SC/STs.
29
Therefore it would seem important to address social inequalities in educational
opportunity not only between forward and backward classes but also among SC/STs,
women and minority groups.
The best way to accomplish this is to focus on
socioeconomic status and favour the economically disadvantaged. Within the quotas,
there should be priority for rural students, women and the poor. Minority institutions also
should observe these preferences.
In the case of higher education, merit must also be considered.
One cannot
consider access to higher education to be a fundamental right. The intellectual standards
of universities and professional colleges must be protected and the misperceived
connection between a university degree and employment potential (and social status)
should not be sustained.
higher education.31
LM Singhvi refers to a "meritocratic - democratic" access to
Therefore within the quotas, certain minimum academic standards
must be maintained. This is especially important for admission to professional courses.
One must then face the arguments that there may not be sufficient numbers of
adequately meritorious backward students or because of their longstanding backwardness
and lack of intellectual exposure, many intrinsically or potentially bright students do not
make the grade.
The government should set up coaching schools to prepare these
students for the various entrance examinations. Screened and selected students may
require coaching for a year or two before they are ready to enter professional institutions.
Having put forward the concept that professional education must be self-financing,
a method must be found for poor students to pay their fees. Easily available loans with
manageable payback terms in the answer.
Extremely poor students who may have difficulty with repaying loans may be given
the opportunity to amortize their loans by government service e.g. working in Primary
Health Centres.
30
8.
REGULATION OF PRIVATE PROFESSIONAL EDUCATION
Most private professional colleges are affiliated to public universities which exert
academic control. The facilities and quality of faculty are determined by the statutory
councils and the admissions and fee structures are presently regulated by the state
governments by diktat of the Supreme Court. Some of the private medical and
engineering colleges are deemed universities. While they are bound by the minimum
standards laid down by the statutory councils, they are outside the compass of the
Supreme Court schemes and thereby not under state government control.
For both categories of private institutions, there need to be appropriate
mechanisms to ensure quality of education, admissions on merit and
a rational fee
structure.
8.1
Admissions on merit open to all
An egalitarian society will strive for equality of educational opportunity in which the
best and the brightest can hope to study at a college of their choice, be it public or
private.
Admissions to private institutions should be through a merit evaluation, whether by
entrance examination or otherwise. A typical rank list will contain a few who can pay for
the entire cost of their education, many who can pay partially and a few who wiT find
difficulty in paying anything at all. Loans should be available for any student who requires
them.
Students who are exceptionally bright may get admission to a mediocre
government medical college where only nominal fees are paid but if loans are available
he/she may choose to study at a top-notch private medical college. His/her options are
not limited to studying at a government college. Equality of opportunity for the brightest
students to study at the best public and private universities is thus achieved.
31
30
.
At present each deemed university conducts its own entrance examination and
there are occasional suspicions of irregularities. A common entrance test (such as the
Medical College Admission Test in the USA) should be the basis of admissions for the
professional colleges. The quota for foreign/N Rl students can be determined by an expert
committee.
8.2
The fees structure
For the Manipal Academy of Higher Education, a deemed university with faculties
of medicine, dentistry and nursing, the fees structure is decided by an Expert Committee
constituted in consultation with the UGC and chaired by a retired chief justice. The
committee includes two former vice chancellors. The fees for each ensuing year is based
on the anticipated recurring expenditure and capital costs for that year. There are no free
seats, only payment seats for which the fees are close to the average of the fees for the
free and payment seats of the Supreme Court Scheme. The quota and fees for
foreign/NRl students is determined at the same meeting as it has a bearing on the total
fees revenue.
For all the deemed universities a similar Expert Committee could be set up in each
discipline. Within each discipline the committee could recommend variations in the fee
structures based on a rational categorization of medical colleges.
8.3
Quality of education
Private professional colleges are expected to meet the norms of the statutory
councils in regards to facilities, faculty and academic programmes. It would perhaps also
be assumed that these institutions would strive for higher levels of excellence as they
need to attract high-fees paying students. It would be additionally useful to have a system
of ranking professional colleges as was recently done by the National Medical Journal of
India.8
32
8.4
The statutory councils
The Unni Krishnan bench spelled out in clear detail the roles and tasks of the
statutory bodies.1 To quote:
' It would be appropriate if the UGC frames regulations under section 12 A(3) of the
UGC Act regulating the fees, which the affiliated colleges, operating on no-grant-in-aid
basis are entitled to charge. The Council for Technical Education may also consider the
advisability of issuing directions under section 10 of the AICTE Act regulating the fees
that may be changed in private unaided institutions imparting technical education. The
Indian Medical Council and the Central Government may also consider the advisability
of such regulation as a condition for grant of permission to new medical colleges under
section 10-A and to impose such a condition on existing colleges under section 10 C. The
several authorities mentioned above shall decide whether a private educational institution
is entitled to charge only that fee as is required to run the college or whether the capital
cost involved in establishing a college can also be passed on to the students and if so,
in what manner. Keeping in view the need, the interest of the general public and of the
nation, a policy decision may be taken. UGC, IMC, AICTE should work together to evolve
uniform criteria. It would be more appropriate if the Central Government and the several
authorities (UGC, IMC and AICTE) coordinate their efforts and evolve broadly uniform
criteria in this behalf. Until the Central Government, UGC, IMC and AICTE issue
orders/regulations in this behalf, the committee referred to above, shall be operative. In
other words the working and orders of the committee shall be subject to the
orders/regulations issued by the Central Government, UGC, IMC or AICTE, as the case
may be".
Before the Unni Krishnan judgement the statutory councils had turned a deaf ear
and a blind eye to the growing menace of certain capitation fee colleges. The Karnataka
and Maharashtra state governments were merrily granting permission to establish medical
and dental colleges, often to cabinet ministers and MLAs. The Maharashtra government
33
t»>, ■■
even usurped the authority of granting university affiliation to these colleges. The Andhra
Pradesh Government sanctioned 12 medical and 8 dental colleges in one fell swoop in
1992. An amendment to the Medical Council of India Act stipulating prior permission of
the MCI before a medical college could be started had been proposed in 1986 but
ineffectively followed up. It was only in 1993 when the Supreme Court forced the hand
of the government that the Central Government came out with an ordinance regulating
the establishment of new medical colleges.
In the wake of the Unni Krishnan judgement
the statutory councils bestirred
themselves but the main activity was organizing symposia and publishing topical articles
in their journals. Some half-baked studies were done on the cost of education. These
august but ineffectual bodies hardly fulfilled the tasks enjoined by the apex court and
which their respective acts empowered them to perform. With the default of the statutory
bodies, the state governments have implemented the Supreme Court schemes.
The
Central Government is perhaps absolved - after all it requires inputs from the expert
bodies which are autonomous organizations.
On August 9, 1996 an exasperated Supreme Court instructed the central
government to take "immediate steps" to convene a meeting of the statutory councils to
formulate a proper fee structure for private professional colleges. Expressing "distress
at the inaction of the authorities" a deadline of three months has been fixed.
The tasks before the statutory councils are:
a.
Compilation of data on the cost of education in private and government
institutions
b.
Policy-making regarding the components of cost of education
C.
Formulation of fee structures
d.
Regulations to ensure and monitor conformity with the fees regulations
34
•;1
e.
Regulations for admission of students on merit
f.
Categorization of professional institutions on the basis of academic
programmes, facilities, research etc.
For the private sector to contribute responsibly and successfully to professional
education it is imperative that the statutory councils formulate appropriate policies and
regulations. It is hoped that this process will soon begin.
35
•
9.
SUMMARY OF RECOMMENDATIONS
9.1
The role of the private sector in professional education should be delineated
through research and discussion at appropriate fora.
9.2 A policy encouraging private initiative in higher education should be formu
lated by government and the statutory bodies.
9.3 The proper role of each statutory body must be formulated within its respective
act (amendments to be made if necessary) and implemented accordingly.
9.4 Research on the cost of education in government and private professional
colleges should be carried out to obtain relevant data.
9.5 The cost of professional education should be primarily borne by the students
with few scholarship seats. Subsidy is to be provided by admission of foreign
students.
9.6 A policy for the admission of foreign students should be formulated by the
government and statutory bodies.
9.7 Government medical and engineering colleges should be largely financially
self-sufficient. They may also charge fees based on cost and also admit
foreign students.
9.8 An Education Development Bank should be set up to provide educational
loans.
9.9 Admissions to professional colleges must be made on merit on the basis of
a national admission test or suitable alternative method.
9.10 An Expert Committee for each professional discipline should be set up to
decide the admission policies and fees structure of the deemed universities
offering professional courses.
36
- ...
... .
ACKNOWLEDGEMENTS
I offer my thanks and appreciation to:
1.
To the Centre for Policy Research for providing the ideal environment for
writing a paper.
2.
To the Times of India whose Fellowship Award enabled the research and
publication of some the work in this monograph.
3.
To numerous experts whose thoughts provided guidance: Prof Anand
Sarup, Prof Amrik Singh, Dr Chitra Naik, Dr Ramdas Pai, Dr Pai
Panandiker, Prof M S Valiathan, Prof Andre Beteille, Prof K Balakrishnan,
Mr M V Kamath, Prof Samiran Nundy, Prof Molly Thomas, Prof A
Mascarenhas, Prof S K Pandya, Prof Upendra Baxi, Prof M V Pylee, Mr
Eric Gonsalves, Dr Vaidyanath Ayyar, Mr Ved Marwah, Mr BG Verghese,
Mr LP Singh, Mr MPM Kutty, Mr John Stanley and others.
4.
To the Manipal Education and Medical Group for providing funding and
leave.
5.
To Ms Anita Wanchoo for her fine secretarial assistance.
37
, •• p
•?»
»
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R K Radhakrishnan. 10 NRIs Join Medical Colleges. The Hindu, Jan 15,1996 p 6.
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Self-financed Studies (edit). The Times of India, Dec 21, 1995.
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40
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