The K.V. Rabindran Nair University Finances Review Committee recently submitted its report to the Kerala government in which it has called for the setting up of a Universities Restructuring Fund of Rs.100 crore to improve the financial health of the universities. A close look at the recommendations made by the committee.

“The financial vision of a university is as important as its goals in advancing higher education levels in our State. If scant attention is paid to that aspect, either at the time of establishing a university or during its decision-making processes, it would neutralise the rationale of existence of the university.”

—University Finances Review Committee Report, December 3, 2009

In concluding that the financial health of Kerala's universities leaves much to be desired and that the government needs to initiate urgent resuscitation measures, the K.V. Rabindran Nair University Finances Review Committee that submitted its report to the State government on December 3, 2009 has, on the face of it, only stated the obvious.

For years Vice Chancellors have cried themselves hoarse trying to make the government cough up larger Plan and non-Plan funds, with limited success.

With rising commitments on salary and pension and an unfavourable receipt-to-expenditure ratio on the examination front thanks mainly to negligible increase in examination fee, Kerala's universities have had little money to spend on infrastructural development, automation drives or on academic innovations.

The real significance of the committee and its report is that this is for the first time that the collective financial woes of varsities in the State have found expression in an official platform.

This is also for the first time that a committee was set up exclusively to recommend how to breathe new life into the coffers of Kerala's varsities.

The large number of vacant permanent teaching posts, the large sums of money that varsities require to pay UGC-scale salaries and arrears, pension benefits, marginal growths of internally generated revenue and under-utilisation of money received for developmental purposes have been identified by the committee as fault lines in the financial management system of universities in the State.

The most ‘workable' of the committee's recommendations appears to be the call to set up a Universities Restructuring Fund of Rs.100 crore. From this each university is to be given a one-time grant to enable it to restructure the administration of its provident fund account and its pension fund.

Such a grant would allow varsities to set up pension funds and deposit PF surpluses in a fixed deposit in the Treasury: something that the varsities are legally mandated to do. In fact the report recommends that universities that are not making such remittances be asked to do so beginning 2010-11.

Each university should set apart an amount equal to at least 10 per cent of its salary expenditure so that a pension fund can be instituted, the report recommends.

In an interaction with The Hindu-EducationPlus after receiving the report the Finance Minister T. M. Thomas Isaac said the government was seriously considering the constitution of a Rs.100-crore corpus for the restructuring fund recommended by the committee. He, however, gave an indirect hint that the KAU may not get the one-time grant as it has already been given a similar grant of Rs.40 crore.

The committee has, in its report, detailed the expenditure that would be incurred by each university consequent to the introduction of the choice-based credit and semester system (CBCS) for undergraduate courses.

The report also notes that the universities would be saddled with additional examination load once the CBCS becomes operational.

As such it has recommended that each university be given Rs.2 crore in the next financial year over and above the enhanced non-Plan grant. This money is to be utilised to complete the computerisation of the examination administration in all universities. The anguish of the committee over the “routine manner' in which the government fixes the annual grant due to universities is very evident in the report. A formula needs to be evolved to assess the performances of each university. It should be on the basis of this assessment that grants are finalised. The committee has appended to its report such a formula. While fixed grants are to be given to each university based on its requirements, the rest of the money is to be given on the basis of grade points earned by the university for its performance across a range of parameters. Grade points can be earned in the ‘general' category, for ‘teaching', ‘research', ‘extension' and ‘consultancy.'

The report lays great emphasis on the need to encourage universities to raise as much money as possible from sources such as the Government of India and the University Grants Commission. Such assistance would however be only for a fixed period of time; beyond this the universities would have to shoulder the financial burden of continuing with the scheme.

Unless the government gives speedy concurrence for such schemes, including the creation of posts, the universities in Kerala would miss out on central assistance, the report cautions and recommends that Vice Chancellors be allowed to make a call on schemes that are wholly sponsored by Central agencies. Alternatively, the report suggests, an empowered committee headed by the Chief Secretary be allowed to clear such proposals without writing to the state Finance Department.

The move by some universities to raise examination fee has been termed by the committee as a “heartening” move. The attempt must be to “realise” (from the examination fee, evidently) as far as possible the expenditure incurred on university examinations. Further, the committee has recommended that each university have separate accounts for depositing funds for non-Plan expenditure and money meant for developmental purposes.

“Immediate action should be taken to constitute a study group comprising the University and Departments of Higher Education and Finance for a detailed study into the working of the universities in respect of unaided colleges conducting self-financing courses,” the report reads.

A proper assessment of the expenditure incurred by university staff for examination-related work of such courses is to be done and should be presented to the government committee which fixes non-Plan grants, the report recommends.

The report stresses the need for university departments to take up consultancy work from both public sector and private sector entities. The report calls for the framing of rules that would govern the operation of such consultancy work in universities.

In order that the higher education sector in Kerala keeps pace with the needs of the times, the report calls for a 10-year plan for revamping higher education keeping in mind the social and market goals of the State.

The report says that there should not be any duplication in the work done by universities and by the directorate of collegiate education. The committee found such duplication in the matter of approval of appointment, placement and promotion of teachers in aided colleges. The universities should be made free from such work so that they can focus more on academic maters.

In order that the higher education sector remains adequately financed over time, the committee has recommended that Kerala keep aside five per cent of its Plan fund for universities. The report points out that now Kerala spends only Rs.70 crore—0.77 per cent of the Plan fund—on universities. This recommendation is in sync with the call given by the U. R. Ananthamurthy Committee that prepared the draft State Policy for Higher Education at the behest of the Kerala State Higher Education Council. The committee had recommended that the State keep aside 30 per cent of its budget for education.

Top government officials who read the report told The Hindu-EducationPlus that it would be a very adventurous Finance Minister who would make that sort of budgetary commitment to education. “Even to set aside two per cent of the Plan for education would be a courageous task for a Finance Minister,” a senior government official noted.

According to Dr. Isaac the spending on education needs to be enhanced. “There is no doubt that the 0.77 per cent figure has to go. But five percent is just impossible,” he pointed out. This gap between vision and affordability notwithstanding the Rs.100 crore corpus may well pave the way for a clean break with their financial past that universities in the State badly need.