INDIA: State seeks greater role for private sector

The approach paper of India's eleventh Five Year Plan was titled "Towards Inclusive Growth". It appears that growth did take place in the last four years, but many note that it has not been inclusive, as inequalities between the rich and the poor have widened, rather than narrowed. In the case of higher education, not only have inequalities increased, but the absolute levels of higher education attainment of the bottom income groups seem to have fallen between 1995-96 and 2007-08, according to National Sample Survey data.

The draft approach paper to the twelfth Five Year Plan is titled "Faster, Sustainable and More Inclusive Growth". One fears that growth might take place, but not necessarily inclusive growth.

Surprisingly, very few appear to have found serious contradictions in the approach of the eleventh plan, which aimed at inclusive growth but through giving the private sector an enhanced role.

The twelfth plan aims to do the same but it also states, in what looks like a rhetorical statement, that "a holistic and balanced expansion approach is needed to target under-represented sections of society" and that the "the central principle should be that no student who is eligible to be admitted should be deprived of higher education for financial reasons".

The importance of the private sector and the need to enhance its role in education is one of the few issues on which clear policy statements are made in the approach paper of the twelfth plan.

In a brief chapter on education in the draft paper, the role of the private sector and the need to encourage it figure repeatedly and very clearly. Even with respect to elementary education, which has been a fundamental right since April 2010, the approach paper recognises the importance of private schools and recommends exploring the possibility of involving the private sector in expanding education and improving its quality. It further states that "barriers to private entry are high and this needs to be reexamined".

The approach paper also favours encouraging private participation in expanding the midday meal scheme, which is being fully funded by the union government. In the case of secondary education, it is already known that a major part of the expansion of secondary education laid out in the Rashtriya Madhyamik Shiksha Abhiyan scheme, must take place through private participation and public-private partnerships.

The government feels that "it is imperative that private sector capabilities are fruitfully tapped". Similarly, with respect to skills development and training, the approach paper is clear: "Public-private partnerships (PPPs) in financing, service delivery and the provision of workspaces and training of trainers should be promoted."

The approach paper is even clearer about the role of the private sector when it comes to higher education. It emphasises the government's resolve to promote the private sector. It states: "Private initiatives in higher education, including viable and innovative PPP models, will be actively promoted."

Besides stating that resources need to be mobilised from government and also from private sources, it makes five unambiguous statements.

First, it states: "Private sector growth in higher education (including technical education) should be facilitated". Second, the paper argues that "innovative public-private partnerships should be explored and developed".

Thirdly, it states: "The 'not-for-profit' tag in the higher education sector should, perhaps, be re-examined in a more pragmatic manner." Fourthly, the approach paper favours provision of "access to public funds in the form of loans, financial aid for students and competitive funding for research to the 'deserving' private institutions".

Financial assistance to so-called self-financing institutions is already being provided directly under 'fee-reimbursement schemes' in technical (and also general) higher education in some states. These institutions also have access to public funds for research and seminars.

It appears that the government wants to expand these measures to help the rapid privatisation of higher education.

The easy availability of student loans has also facilitated the fast growth of private education. The government proposes to provide guarantees to banks for student loans so that the private sector can expand more.

Further, the approach paper recommends consideration of the idea of creating large education hubs on fallow lands at four or five locations in the country, anchored by large public sector enterprises, possibly with participation by the private sector and funded through the money they allocate to corporate social responsibility.

Fifthly, the paper states: "Institutions should be encouraged to raise their own funds through various legitimate means."

The third statement relating to the re-examination of the not-for-profit tag was made in the context of the whole education sector, implying that it is an issue to be considered in the case of elementary and secondary education as well. In the case of other levels of education the paper stresses the "the need for the removal of entry-barriers to private participation".

The government is not completely unaware of the problems being created by private higher education institutions. This was very clear when it recently introduced into parliament bills for the prohibition of unfair practices in technical educational institutions and for setting up educational tribunals.

But the government still favours the large-scale expansion of private higher education. Interestingly, the approach paper recognises the huge size of the private sector in higher education, when it notes that private higher education accounts for about four-fifths of enrolment in professional higher education and one third of overall enrolment. If the enrolments in self-financing courses in public higher education institutions are also added, these proportions would be much higher.

In contrast, in the United States only a quarter of students in higher education are enrolled in private institutions. The absolute and relative size of the private sector in higher education in India is alarmingly high compared to so-called highly privatised higher education systems around the world.

India may have crossed any decently defined tolerable limits of privatisation, and this might not help in building a strong, vibrant and sustainable higher education system. But still, the approach paper argues for further growth in private higher education, including in for-profit higher education.

Many rightly note that the last couple of decades have seen unbridled growth in private higher education in India and that the trends are unlikely to change in the near future. What is very clear from the approach paper is the unwillingness on the part of the government to alter this trend even modestly.

There is no reference in the paper to the goal of allocating 6% of gross domestic product to education. There is no mention of any intention to make secondary education universal, nor is there any clear reference to the recently stated goal of a 30% enrolment ratio in higher education in the near future.

On the whole, the approach paper spells out not what the government wants to do to improve the financing of the public education system, but more what it wants to do to facilitate the private sector to grow further. Privatisation seems to be the only mantra for the development of education in the twelfth plan.

* Jandhyala BG Tilak is a professor at the National University of Educational Planning and Administration in New Delhi. Email: jtilak@nuepa.org