Monday, June 08, 2009

Free Market Approach to Higher Education in India

In the recent years the govt of India has taken quite a few appreciable steps towards churning out more engineers and managers (of course significantly marked with the curse of 50% reservation). The HRD Ministry has taken steps to create more number of IITs and IIMs, since they represent the best in engineering and management education. While this is indeed a forward looking approach by the ministry (for a change), I have a strong aversion to the fact that the new institutes are being set-up under the umbrella brand of IITs and IIMs. Gone are the days when Pandit Nehru proposed setting up these elite institutions with one eye on getting India to the world map and another on achieving the Socialist goals. According to me, naming any new engineering institute under the umbrella brand of IIT or IIM is like giving a handicap to a less deserving guy in a 100 mtrs race or like giving a nondescript unproven cricketer a chance to play in the Indian cricket team simply because he was trained under Ramakant Achrekar. Also, what is deplorable is the “Herd Mentality” that the govt. has given birth to in the process of creating quality engineers and managers.

This very approach of giving the name IIT and IIM has certainly intrigued me for quite some time now. I am left wondering and hence have a few questions to ask. Why not name them something else say a Rajiv Gandhi Institute of Management (in fact this was the name proposed initially for IIM Shillong, which had to be later renamed into IIM) ? Why not apply the free market approach to Indian higher education? Why not let the institutions earn a name for themselves?

What is more astonishing is the fact that naming these new institutes anything else has actually faced with quite a bit of resistance, for ex: the Rajiv Gandhi Institute of Management had to be rechristened into IIM-Shillong. Across the world, I have not seen a single country where the major engineering or management institutes have been set under the umbrella brand. The US doesn’t have a Harvard Business School – California and a Harvard Business School – Los Angeles or a series of MITs, although most of these are heavily sponsored by the governments.

I propose that if we apply a Free Market approach to Indian education we would only do a world of good. A free market approach would mean that each institute would have an independent name for itself and not operate under an established brand name. What this will do in turn is that each institute will now have to fight for the available resources and until they offer their best and are able to prove themselves, the stakeholders won’t invest in them. This approach would have significant benefits for all the stakeholders involved. For the students this would be a win-win situation since now the institute will have to offer the best resources and facilities to attract quality talent as they simply can’t live on the past laurels. From the perspective of the faculty the institute has to offer high quality research facilities and equitable salaries to attract the best. In turn this would mean that the institutes will now have to be more innovative and ingenious, in exactly the way corporations operate, to attract quality talent and more investments. What this also does is that it gives scope to private players who don’t get a level playing field along the centrally established institutes and in the process not get dwarfed as they usually do. This would also in the long run ensure that the government can focus its energies into building a more robust base by building a stronger primary education system and attracting more people into the net of education. Thus we can achieve two goals simultaneously; the first of having a quality education system at the top which is able to attract quality students and faculty which is more involved in research and at the same time giving more people the scope of education.

Another major aspect that having independent names for each institute would do is getting rid of the Herd mentality that the present ones have given birth to. Today, there is such a big rush towards getting into an IIT that is gives way to unnecessary pressure on the teenagers to perform since there are so many big expectations lying on their head. Everyone wants to become an engineer from IIT or a management graduate from IIM. This is what I would call the herd mentality. No one wants to carve a unique niche for himself by getting into pure sciences or some other streams. While some students do get into these premier educational institutes, they come out with a big baggage of elitist mentality and inflated egos. As has been often noted by the head honchos, it is much easier to mould a guy from a second rung institute than an IIT or an IIM. It’s one thing being confident and it’s another being arrogant. Since the clamor for the names of the institutes is so strong among the aspirants, those who make it for them it’s as if they have conquered the world and hence they develop an elitist mentality. If only we could take out the umbrella from over their head and leave them naked to face the wrath of nature would the best candidate come out.

I would also like to raise another pertinent point here. Why can’t the government have something like a common fund which it would allocate to the, say, top 10 performers, including private and govt run, each in the area of management or engineering or medicine etc in equal amounts? The govt can develop a set of parameters on which it can judge the institutes each year. Some of these parameters may be the research done by the institutes or the innovativeness shown by each institute in imparting education. Once the parameters are set, the govt would be able to ensure a level playing field for each party. Year on year as each institute tries to be the best and outdo each other and make an entry into the top 10, the average quality of output from the institutes would only get better. Even the ones that get left out would be then able to attract more investors and thus have more and more people interested in having equity in the institution.

While I have tried to draw some attention to the Free market approach to the higher education, I must appreciate the fact that there are some independent players, each in the field of management and engineering who have given the IITs and IIMs a run for their money. Some of the names that I can recollect at this point would he BIT-Mesra & BITS Pilani in engineering and XLRI & ISB in management. However, these names are far and few in between. Only if we have a free market approach and are able to get rid of developing a herd mentality by developing umbrella brands can we see the entry of a few more names while some older ones may fade into oblivion.

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