Look beyond govt funding

IITs can't expect the Centre to finance them forever

The decision by the Indian Institutes of Technology (IITs) to increase tuition fees by 80 per cent – from Rs 50,000 to Rs 90,000 per annum – is a welcome step in correcting the fee distortions prevalent in most state-owned higher education institutions. The last such fee increase was in 2008 (a 50 per cent hike) and even the worst critics of such fee hikes would admit that another revision was long overdue. In fact, Tuesday’s decision should hopefully be the starting block for removing the disparities with private engineering institutes, many of whom have been charging nearly 200 per cent more than what IITs do. The point is even after the latest revision, the IITs’ income from fees will be woefully short of the Rs 2.5 lakh they spend per student per year and would do little to provide any financial cushion in terms of meeting their operating expenses. Given the inflation, campus costs have been going up by 10 per cent every year; the IITs argue they cannot expect the existing fees to take care of their expenses — capital plus operating costs. No one can fault this logic.

A key recommendation of the Kakodkar Committee last year was that the IITs become financially independent of non-Plan (operational) budgetary support to meet their operating expenditure, while their capital and infrastructure expenditure continue to be met fully under the government’s capital budget support plan. (The IITs are now 80 per cent funded by the government.) The Kakodkar Committee had in fact recommended the fee for undergraduate, Masters and PhD programmes to be Rs 2-2.5 lakh per annum. If accepted, this could have freed up government resources to be used in primary and secondary education, areas in which the state needs to invest a lot more to create basic infrastructure and capacities.

The logic of these recommendations, however, failed to persuade the IIT directors and the empowered task force that had been set up to examine the Kakodkar report. They argued that the IITs had seen many students from financially modest backgrounds and these bright and deserving candidates would find it impossible to bear the burden of a steep increase in fees. This argument, however, ignores successful global models in which education loans help those who can’t pay. Also, experts have claimed that full acceptance of the recommendations will have to wait since the National Academic Depository Bill is yet to be cleared by Parliament. The Bill would enable a shift to “demat” degrees. Then, the degrees of IIT graduates would reflect an obligation to repay the institution and money would come through the employer. The Bill also suggests using the Aadhaar-based system to fund needy students, who, after completing their degree, can be tracked across the country to recover the loan. Once Aadhaar is fully rolled out, the argument suggests that the needs of the underprivileged admission seekers to the IITs or IIMs can be much more easily addressed and the IITs can be bolder in their fee hikes. Having said that, it’s also a fact that fee increases alone aren’t enough. Instead of depending on the government, the IITs will have to look at generating funds from other sources just as their counterparts in the United States do — tapping alumni and industrial research, for example.