RESOURCES FOR EDUCATION
 

Strategies for Raising Resources

313. The first step therefore, should be to provide for at least 6 % of the GNP for Education which has not so far been provided, though this has been repeatedly urged for over quarter of a century. (The figure of 6% of GNP was suggested by the Education Commission 1964-66 on the basis that, that was the level of investment which had already been reached even by certain developing countries of Asia. An estimate of investment required for implementing the recommendations of the report of Education Commission 1964-66 was made. Co- incidentally, it was noted that this amount approximated to 6% of GNP. It had also been noted that the economic growth rate per annum for 20 years since then was envisaged at 6%. A quarter of a century has since passed by considerable changes have come about in the economy. Therefore, in the changed context, there is need for reviewing the proportion of GNP that should go into Education as on date). Even providing 6% of GNP means substantially larger allocations for Education in the budgets of the Central and State Governments. (15.13.5)

314. All technical and professional education should be made self-financing, education being viewed as involving the use of resources (inputs) that should be necessarily paid for by the beneficiaries as it confers on them greater employability (output). (15.13.5)

Increase in Fees

315. The tuition fees now prevalent in educational institutions, by and large, are those fixed many years ago. In 1950-51, income from fees accounted for 20% of the total expenditure on education. This proportion has now come down to 5%. In the circumstances, a justifiable strategy is bringing about an appropriate increase in the fees payable by students going in for Higher Education. This increase should be appropriately,

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linked to at least the cost of recurring expenditure and levels of income of the parents of the beneficiaries. The richest quartile of the people can bear 75% of the cost of the education; the next richest quartile 50% of the cost; and the next richest quartile 25%. The last quartile of the economically weak (to, be appropriately defined) need not bear any part of the cost. (15.13.5)

316. Besides tuition fees, fees charged for specific purposes in the Higher Educational Institutions like laboratory fees, Library fees, building fees, magazine fees, games fees etc. also have to be increased on a rational basis with reference to the cost of providing the relevant facilities/services. (15.13.5)

Institutional Loans

317. With the ever increasing number of examinees, examination fees can also be an important means of raising internal resources to meet the cost of Higher Education. (15.13.5)

318. While student loans have the advantage of bringing down government investment in Higher Education, they do involve certain problems. They are : Psychologically, people are against loans. Credit markets are not developed. There are difficulties in securing repayment of loans even as the government experience of operating loan scholarship shows. (Reference has been made to this later.) The poor could face difficulties in having access to loans.

However, institutional loans as a strategy for releasing the pressure on government resources and as a means of putting resources in possession of those aspiring for Higher Education is indispensable. Problems in administration of loans should not result in the easy solution of opting out of them. (15.13.5)

Financing Education by Nationalised Banks and Financial Institutions

319. Nationalised banks and financial institutions, as a rule of practice, generally concentrate on industrial financing and

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financing of commercially viable activities. However, there are examples like the State Bank of India advancing loans for Higher Education.

Therefore, there is need for a committed programme of the nationalised banks for providing loans for recipients of Higher Education. (15.13.5)

320. Term lending institutions like the Industrial Development Bank of India (IDBI), Industrial Finance Corporation of India (IFCI) and Industrial Credit and Investment Corporation of India (ICICI) should launch programmes for promoting research in universities. This could ease the burden on the University Grants Commission which, in turn, is provided funds by the government of India. The IDBI has to its credit several promotional activities with a view to helping the process of industrialisation. It has, for example, set up the Entrepreneurship Development Institute of India. It has also provided assistance to voluntary agencies engaged in imparting production and vocational training. Assistance has also been provided to the National Association for the Blind to set up a polytechnic at Bombay. The IDBI and ICICI have had chairs instituted for specific projects in various universities. This activity could be expanded in an organised way with reference to the merits of individual programmes of the respective Higher Educational Institutions. (15.13.5)

321. Institutional finance for infrastructure needs to be raised in the circumstances. Housing Finance Institutions, therefore, could take up programmes for creation of capital assets in the educational sector i.e. for buildings for schools, colleges, universities as also hostels for the students, staff and teachers. Repayment of loans may have to be guaranteed by the appropriate Governments. (It is worthy of mention, in this context, that Housing Development Finance Corporation (HDFC) has already financed schemes for construction of staff quarters and ownership houses for University staff in Gulbarga, Karnataka. The Universities and Educational Societies, on their part, could consider investment of their provident fund money in the bonds of Housing Finance Institutions approved under Section 36 (i) (VIII) of the Income Tax Act.) (15.13.5)

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322. There is a strong case for LIC's investment in the area of housing going for hostel facilities for' the students, staff and teachers in the educational institutions. However, diversion of these resources for the education sector would mean doing so at the expense of other development schemes, 90% of the accretions of the LIC already being committed to socially oriented sectors. Therefore, this is a matter on which the Government as well as Planning Commission will have to take a conscious decision regarding the reallocation; of the LIC's investible resources with substantive priority for the Education sector (15.13.5)

Scholarships

323. Economically weaker sections of the people going for Higher Education who cannot afford the enhanced fees or loans from financial institutions could be provided appropriate scholarships. (15.13.5)

324. Funds provided in the Central sector for scholarships during the Seventh Plan period was of the order of Rs. 22.26; crores. This would have -to be considerably enhanced for the benefit of the economically weaker sections in the interest of equity and providing access to Higher Education for them. There is also need for rationalisation of the whole programme of awarding scholarships. (15.13.5)

325. The Government of India scheme of scholarships in approved residential secondary schools benefit only a small number of 500 students per annum in the whole country. Serious malpractices in the selection of scholars have also reportedly come to the notice of the Government, the benefits, of late, being cornered apparently by manipulations on the part of those hailing from a very few centres in India. This scheme could as well be discontinued and the number of scholarships enhanced for meaningful programmes like for upgradation of merit of SC/ST students. (15.13.5)

326. One of the modalities for securing better implementation of scholarship schemes with more direct and responsible involvement on the part of the States, no doubt, would be for

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the administration of the scholarships being left totally to the States themselves necessary outlays being provided to the States as part of the State Plan Outlays on an earmarked basis. (15.13.5)

Other Means of Raising Resources

327. Certain other means of raising resources for education are presented below:-

- A sustained programme to be implemented every year right down to the Panchayat levels for raising community contribution (Rules for grants-in-aid provided to the educational institutions could be modified to provide for built-in incentives such that Government assistance is related to contributions raised from the community on matching basis. In the course of interactions with the Ministers and Secretaries of States, a suggestion was made that there could be funds created for educational development. Like relief funds created in the names of Prime Minister of India and the State Chief Ministers, there could be Prime Minister's and Chief Minister's Educational Funds into which the community contributions, educational cess (about which reference is made later) etc. could be credited. These funds could be operated for the purpose of building up infrastructure for educational institutions upto the elementary levels).

- Institution of innovative programmes like the Savatribhai Phule Foster Parent Scheme of Maha- rashtra for promoting primary education of girls under which registered foster parents pay Rs. 25/- p.m. in cash or kind to the needy girls from weaker sections.

- Removal of restrictions on the investment of surplus income of educational institutions like the stipulation that such income should be invested in low yielding Government securities/bonds etc.

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- Collection of educational cess related to revenue sources such as land revenue, excise duties, charges on cash drops, charges on buildings in urban areas etc. (The sources on which cess could be charged naturally will be quite diversified and different for different States. It would be for the respective States to identify the sources on which cess is to be levied).

- Educational institutions being permitted to let out on rent their facilities like conference rooms, auditoriums, etc.

- Consultancy services being rendered by higher, general and technical institutions.

- Levying of a direct assessment on developed host countries which utilise the services of professionals from the country. This assessment could be related to the total number of professional personnel migrating, the amount of their income and the taxes they pay to the host countries. In fact, this is one of the suggestions made in the U.N. Report on 'The Reverse Transfer of Technology' (1979). This strategy would naturally involve entering into bilateral or multilateral tax treaties with the beneficiary developed countries.

- Broad basing distance education.

- Introduction of shift systems in schools, so that the existing infrastructure can be utilised better.

- Identification or surplus teachers in schools and colleges and their deployment otherwise. (15.13.5)