Time now for quality

The shake-out in professional education should be welcomed

India’s higher education market has moved from its traditional shortage-based dynamics to excess supply — linked to uneven quality. Private management institutes and engineering colleges have mushroomed, creating a surge in output — 400,000 engineering students passing out every year, and the annual B-school throughput capacity going up to an astonishing 300,000. Much of the growth has been in the private (supposedly non-profit) sector, marked by high fees and often poor facilities and teaching. The job market has caught on; the leading information technology (IT) companies have been saying for some time that less than a quarter of engineering graduates is employable. Also, the majority of B-school graduates end up in jobs that do not require a management degree, with salaries that do not justify the large amounts invested in fees.

So the bubble has burst. Students and parents have realised that the mathematics does not add up, and are opting out. The number of people sitting for the leading B-school entrance tests has dropped precipitously, as a report in this paper’s Saturday Weekend section spelt out. As for engineering colleges, tens of thousands of seats have been going unfilled in states as far apart as Karnataka and Gujarat, Madhya Pradesh and Tamil Nadu. You could say that the problem has found a market-based solution; since demand has dropped off, supply too will shrink. What one should hope is that the shake-out will see the poorer quality institutions downing their shutters.

What are the lessons to be learnt? There are at least three. First, regulation by the government is less effective than the dynamics of the marketplace. Certification by the All-India Council for Technical Education has not meant any assurance of quality, and in fact involved pay-offs. The human resource development minister’s push for replacing each such failed body with a new one is no solution. What has worked is the interplay of supply and demand. The long-standing shortage in higher education capacity led to a rush of fresh supply, the market overshot (as was to be expected) and is now correcting itself. The next logical development will be a stress on improving quality across the board, as institutes compete for good students in the same way that the best international universities do.

The even more important lesson is that the thrust of reservations in higher education is misplaced, born as it was in a shortage situation when admissions were hard to come by. Now the better students have a choice, and even the poorer students (including those from disadvantaged backgrounds) can hope to get a professional education. What they may not be able to afford are the high fees. The focus of government policy should shift, therefore, from reservations to affirmative action — scholarships to poor students, with additional weighting for students who come from the Scheduled Castes and Tribes.

The third and final lesson is that if private sector (non-profit) education is encouraged at school level, instead of actively discouraging it as recent legislation has done, you could see excess supply and then a drive for quality in school education too. With overall literacy having reached 74 per cent, and literacy in the school-age population having got to perhaps near 90 per cent, the time has come to switch focus from pure supply to quality supply.