Kaushik Basu supports private sector varsities

Economic think-tank and Chief Economic Advisor in the finance ministry Kaushik Basu has reiterated that private sector be encouraged to set up universities in India and given freedom to fix the fee.

“There are about 500 universities in the country and no government in the world can create so many good universities,” Basu said at the Lucknow Management Association’s (LMA) Thought Leadership Series lecture here.

He said the private universities should be allowed to be set up and regulated, so that they can cater to the affluent sections in society, while the government can concentrate on providing quality education to the deprived sections.

“While, the US and the UK are major economic powers, they are also known for their seats of learning. We should make India a hub of quality education and charge a fraction of higher education fee vis-à-vis the US, so that more money flows in,” he noted.

Commenting on the European debt crisis, Basu said the fiscal situation in India was good, but warned if “Europe goes down with crisis, it will create several problems, including exchange rate and outflow of funds.”

“Globalisation leads to higher growth rate, but you are also vulnerable to the fluctuations in the international financial markets,” he added.

The economist said foreign money was coming to India, as it was considered a safe investment destination. However, things would reverse if the western markets were gripped with crisis. “During uncertain times, the foreign investors would pull out their money from the Indian stock market.”

Basu said the savings and investment rate of India was around 35 per cent, which was only bettered by China at 49 per cent in the emerging Asian economies. “The growth rate of India is good, but it has to be sustained. Besides, the uneven distribution of incomes has to be tacked for poverty alleviation” he observed.