Subsidies inequitable, student loans a better option: Survey

Rapidly increasing per-student cost causes immense pressure on exchequer

Thanks to immense pressure on the exchequer and inequitable distribution of subsidies, the Economic Survey 2011-12 has recommended reduction of government support for higher education and replacing it with a better commercial student loan scheme.

According to the Survey, tabled in Parliament on Thursday, education being an important component of economic development and driving force behind economic growth, governments in India and across the world are subsidising higher education. “However, over the years, the diverging trajectories of costs and revenues due to rapidly increasing per-student costs and increasing tertiary level participation have created immense pressure on the exchequer.”

Moreover, subsidies are inequitable in that irrespective of the wealth of one's parent, all students in a state-subsidised institution get the same level of subsidy.

The Indian higher education system is one of the largest in the world.

At the time of Independence, there were only 20 universities and 500 colleges with 0.1 million students. These increased to 611 universities and university-level institutions and 31,324 colleges in 2011.

To prepare for the challenges of the 21st century, says the Survey, the government has taken a number of initiatives during the Eleventh Plan period focussing on improvement of access along with equity and excellence, adoption of State-specific strategies, enhancement of the relevance of higher education through curriculum reforms, vocationalisation, networking, and use of information technology and distance education along with reforms in governance in higher education.

A large-scale expansion of university education has been initiated by setting up new institutions comprising 30 central universities, 8 Indian Institutes of Management, 10 new National Institutes of Technology, 20 Indian Institutes of Information Technology, 3 Indian Institutes of Science Education and Research, two Schools of Planning and Architecture, 374 model colleges and 1,000 polytechnics.

The other initiatives include upgrading state engineering institutions, expansion of research fellowships and provision of hostels for girls, reservation for the SCs, the STs and the OBCs, focus on backward, hilly and remote locations, facilitating participation of students belonging to minorities, girls and persons with disabilities, scholarships, provision of education loans with interest-free subsidies and broadband connectivity.