The Broad Mind | Loss-making education policy

India is losing both brain power and money

By Barath C.

Indian government’s policy towards education hinders market forces from operating in the education sector and causes huge losses, both in terms of brain power as well as money.

The reason is because many in India view education as a social service and an individual right and automatically assume that the quality and access to education should be equal for everyone. By extension, this implies that the quality and cost should be regulated by the Government.  This does not make for sound policy. Suggesting that somehow poor do not have the same right to the same quality of education at affordable cost might sound preposterous. But it is a reality we cannot escape. Take for example other sectors like healthcare: The poor have free access to (frequently sub-standard) government hospitals with questionable levels of comfort, the rich can get a royal treatment at Breach Candy or the Apollo group from better qualified doctors with better facilities because they can afford it. Even such basic things like right to legal representation — guaranteed in our constitution — varies greatly in quality based on how much money one has.

To guarantee a level of quality and cost (instead of market forces sorting out this mess) the Government has inserted itself into regulating foreign universities which try to open campuses in India. This poses many problems. Stipulating that they do not profit from such campuses (if they profit, only the super-rich might be able to afford education) is a disincentive for foreign universities to open campuses, which means that students who can afford such education travel abroad. Foreign students brought in as much as 21 Billion $ into the American economy as per this report — which equivalently is money lost by countries like India. The second more serious issue is that these students then choose to stay abroad, thereby affecting India in two ways. They do not contribute to innovation in India’s economy and due to a feedback-effect, local talent and facilities for education remains stunted.

Apart from the problem of losing talent to foreign countries, a second more serious issue is the inability for talent to cater to the domestic demand. For example, one of the major bottlenecks towards improving India’s infrastructure is the fact that there are simply not enough trained engineers to absorb the investment. Students travelling abroad cater to the demands of the economy of the country they travel to (due to increased job prospects) and are frequently not trained to the demands of India’s economy (thereby preventing them from returning).

To be fair, the Government faces a peculiar problem as well. The ideal scenario is to throw the doors open to foreign institutions and investment in India’s education sector and to let market forces pick the winners and losers — but then it runs the danger of electoral politics. High fees (and thereby the perception that the Government is directed “solely towards the rich”), failed institutions that swindle their clients, institutions that overcharge for skills that are not marketable — all might become electoral issues.

Barath C. is a researcher interested in Science, Technology and International Relations. Follow him on Twitter at @barathcn

DISCLAIMER: This is an archived post from the Indian National Interest blogroll. Views expressed are those of the blogger's and do not represent The Takshashila Institution’s view.