Is Education a service or an industry

Education sector should be declared an “Industry” and should be opened up to attract venture capital funding with the government providing the right sops and benefits. At the current rate of budgetary allocations being made by the government which can best be termed a “pittance” the country will never be able to make the grade of a developed nation. Nobody in India bothers about the utilization of funds collected in the form of “education cess” by the government. There has been no transparency or disclosure as to how the funds have been utilized for providing higher education. Last year alone as per the budgetary documents, funds to the tune of Rs.8000 crore have been collected as “higher and secondary” education cess. Only the finance minister can answer the question as to what has been done with the corpus accumulated so far to improve the quality of education within the country.

With India already facing a talent crunch with more and more graduates produced by the current system being increasingly found unemployable in the IT &ITES sector, the time has arisen to conduct a reality check. We face the risk of a downturn in the outsourcing space as no amount of tub-thumping or projecting our country as a low cost destination will help if the quality of work rendered takes a backseat. China and South East Asian economies are not far behind to replace us in the services industry, which has contributed to 67% of the GDP growth and has been the backbone of our economy in recent times.

The reason why the skill levels of graduates churned out by our education system are below par is due to of the lack of adequate investment in infrastructure by our educational institutions. Though the private institutions have been doing their bit to ramp up their infrastructure by creating a huge corpus of funds supported by high fee structures and capitation fees, the government has been subsidizing the cost of education with a service motto and is under a social obligation to do so. But the flipside of this policy is that most government colleges have dilapidated infrastructure and poor faculty due to lack of adequate funding support.

The solution to this conundrum lies in the government continuing to support primary education in the country through subsidies and low fee structures whilst opening up higher education to private players and venture capitalists who shall all the more be eager and naturally disposed to provide adequate funding to these institutions given the demographic dividend that our country has in store. The government can decide on policy matters and frame the necessary regulations in this regard. For the higher portals of learning like IIT’s, IIM’s and various government supported institutions like Anna University, they must be given a free hand to approach the capital markets for funding support. Given the tremendous goodwill and popularity enjoyed by these institutions, they would no longer need to depend on the government for annual grants. Already a number of educational institutions have been getting themselves graded by rating agencies under “Maritime Grading” policy of the government. This grading which acts a quality certification for the institution can be an added advantage to secure access to funds from various investors both within the country and abroad.
Moves like these can unlock significant capital for the government that can be more gainfully employed to strengthen elementary education within the country and bring more tiny tots under the wings of education. The government must also speedup the implementation of technology driven education, infrastructure support and teachers training programs across all primary and secondary schools with the help of
educational software companies like Educomp Solutions and Everonn systems.

To sum up, education is the most potent force for radical thinking and social change and must be made more effective using better infrastructure and technology. Vision 2020 may not seem a distant dream if the government carries out educational reforms in a phased manner.