Technical institutions and university departments offering technical courses are presently faced with the challenge of meeting the steadily escalating cost of salaries, materials and services, maintenance, library books and journals, replacement of instruments and equipment, modernisation of institution and development of laboratories, workshops and other teaching facilities without loss of quality of education. The resource constraints have not affected the private unaided institutions to the same degree as they are able to meet their recurring, non-recurring, and development expenditures mainly through the fees charged from students, the fees being fixed at a fairly high level and revised from time to time.
The recent constraints in resource availability for public funding of technical education have compelled the concerned authorities in the Governments and institutions to examine ways and, means of keeping the institution running without loss of quality and slackening of efforts towards modernisation and development. The terms of reference of the Committee given in Appendix - II are aimed at evolving measures of achieving this end. Although five specific items have been referred to the Committee, many of the associated issues are interrelated. Hence the basic issues are considered here, although they are not compartmentalised in the sequence-given in the terms of reference.
1. PLANNING OF EXPENDITURE AND GRANTS
As the Government assistance to meet the requirements of the institutions have until recently been taken for granted, the institutions have not been making any effort towards long term resource planning. A good number of the Government-funded and aided institutions have expanded in size and academic programmes without any consideration of cost effectiveness. As a result, the members of the technical and non-technical supporting staff and infrastructure in these have become large and disproportionate to the strength of students. Several institutions have been established in recent years with uneconomical levels of student intake, both overall and branchwise.
While there is need for long term resource planning by each institution for managing the system in a very cost effective manner, the Governments both at Centre and State levels should have a clear- cut policy on consolidation and expansion of technical institutions with emphasis on economy of scale.
With the recent Government directives towards freezing of non-plan grants and also reduction in developmental grants despite regular increases in pay and allowances, the institutions have been taken by surprise and are accordingly finding it difficult to bring about the desired economy in expenditure in a short time. It is felt that both the institutions and the Government should undertake realistic planning for the present and the future. Through long term policy guidelines the institutions may be told of their obligations to enable them to prepare plans for running and developing the institutions without loss of quality and without the need for crisis management.
Substantial investments are being made nationally, both in public and private sectors, in engineering industries as well as in service sectors such as energy, petrochemicals, mining, fertilizers, processing, transport, telecommunications, housing, etc., all of which require significant technical manpower support. It is then but natural to expect that a portion of the investments earmarked for these activities is allocated to the development of the required technical manpower and such an approach built into the planning process. With such a philosophy, it is not at all difficult for the governments to mobilise adequate resources for development of technical education.
In a growing economy it is essential to increase the quantum, and quality of technical education.In this context Government support for new programmes in existing institutions and for the establishment of new institutions is unavoidable. Therefore, at a national level there should be a reservoir of funds that guarantees unhindered development of technical education. With such funds earmarked for financing technical education and R & D activities, this sector does not have to compete with other sectors for government support. Such a reservoir of funds can be built up by the Government of India either by collecting educational cess from industries and other user organisations or by setting up an Educational Development Bank of India or both.
A cess on industry is likely to be looked upon as another form of tax; further, other sectors such as health care may also demand similar cess for their development. An educational cess on industry may also be difficult to operate. In contrast, establishment of an Educational Development Bank of India (EDBI) by the Central Government appears to be a simpler and speedier approach. In any case, if and when an educational cess is collected, the proceeds should be fed into the EDBI, augmenting the resource availability.
The EDBI may be set up with shares by each of the State Governments totalling about Rs. 1,000 crores, matching contributions by the Central Government and from International Financing institutions, totalling about Rs. 3,000 crores. Shares may also be given to industrial houses and national and international organisations, augmenting the capital. Funds from the EDBI may be given as soft loans to Government funded, Government-aided and unaided institutions for their establishment and development, including new programmes, replacement and modernisation of equipment and other infrastructure.
At the State level every state should also initiate setting up a State Educational Fund (SEF) to give assistance to needy students in the form of loan scholarships.
2. ENABLING SELF-RELIANCE OF INSTITUTIONS
The need for self-reliance has been well recognised by the Government- funded and aided institutions though it may not be ever possible to become so self-reliant as to be independent of Government grants like the private unaided institutions. One of the first steps that could be taken in enabling the institutions to become self-reliant is to help them establish a corpus fund by giving initially the seed money and then giving grants periodically to match the fund generated by the institutions for augmenting the corpus fund. To allow the corpus fund to grow at a reasonably fast rate, it is proposed that Government grants to institutions should have three components, viz. Plan, Non plan and Corpus contribution. The corpus contribution should be a significant part-of the total annual grant and in no case less than matching with the contribution raised by the institution in the previous year through donations, savings, etc.
The institutions are expected to be able to attract donations and contributions for a variety of purposes both from individuals and industries in case the giving of donations and contributions is made attractive both through tax exemption and through suitable recognition of the donors by the institutions concerned.
In this context, it is pertinent to note that the Union Finance Minister in his budget speach for fiscal year 1993-94 mentioned :
"Hitherto, our institutions of higher learning have been almost entirely dependent on government funds. As government funds are limited, we must find ways of funding these institutions from industry. This will also bring them closer to industry and more responsive to its needs. I therefore, propose to raise the income tax deduction given to contributions to approved universities, institutes of technology, institutes of management and equivalent institutions from 50 per cent at present to 100 per cent...............
...... Indian industry needs to spend a lot more on research and development. In doing so, I would encourage industry to make use of the facilities offered by our national laboratories and research institutes. To that end, I propose to introduce a weighted deduction of 125 percent of the contribution out of income from business or profession for research programmes in approved national laboratories and institutions carrying out research and development in natural and applied science .............. "
It is understood that the proposed 100 percent deduction of contributions have not yet been implemented. It is also necessary clarify that the term "equivalent institutions" includes RECs, deemed universities and similar institutions. Similarly, in the matter of weighted deduction of 125 percent, the term "national laboratories and institutions" was explained in the Finance Bill 1993 only in a restricted sense leaving out "institutions". It is essential that this deduction is extended to educational institutions as well and appropriate orders issued accordingly.
There are several other measures that could be taken at the institutional level also to make donations and contributions attractive to the donors. Such measures include:
- Preferential rates for consultancy and testing charges to industries which make substantial contributions.
- Giving concessional fee rates for continuing educational programmes for nominees of donor industries.
- Reduced placement fee for campus recruitment where such fees are charged.
- Nominating donors of substantial amounts to advisory bodies and consultative committees of the institution.
- Naming the facility donated, after the donor.
Apart from financial, contributions could also include donation of shares, donation of equipment, construction of buildings, contributions of expertise, sponsoring of academic programme, instituting chairs etc. as well.
The corpus fund is to be invested in high yielding instruments. The yield from such investments should naturally be exempted from income tax. The capital shall be allowed to grow, and only a part of the annual yield shall be used to meet a share of the recurring expenditure. The institutes should also be given the freedom to transfer revenue out of testing, consultancy and extension services and annual recurring budgetary savings, if any, into the corpus fund.
3. ECONOMY IN EXPENDITURE
Technical institutions and university departments offering technical courses are presently faced with the challenge of meeting the steadily escalating cost of salaries, materials and services, maintenance, library books and journals, replacement of instruments and equipment, modernisation of institution and development of laboratories, workshops and other teaching facilities without loss of quality of education. The resource constraints have not affected the private unaided institutions to the same degree as they are able to meet their recurring, non-recurring, and development expenditures mainly through the fees charged from students, the fees being fixed at a fairly high level and revised from time to time.
The recent constraints in resource availability for public funding of technical education have compelled the concerned authorities in the Governments and institutions to examine ways and, means of keeping the institution running without loss of quality and slackening of efforts towards modernisation and development. The terms of reference of the Committee given in Appendix - II are aimed at evolving measures of achieving this end. Although five specific items have been referred to the Committee, many of the associated issues are interrelated. Hence the basic issues are considered here, although they are not compartmentalised in the sequence-given in the terms of reference.
1. PLANNING OF EXPENDITURE AND GRANTS
As the Government assistance to meet the requirements of the institutions have until recently been taken for granted, the institutions have not been making any effort towards long term resource planning. A good number of the Government-funded and aided institutions have expanded in size and academic programmes without any consideration of cost effectiveness. As a result, the members of the technical and non-technical supporting staff and infrastructure in these have become large and disproportionate to the strength of students. Several institutions have been established in recent years with uneconomical levels of student intake, both overall and branchwise.
While there is need for long term resource planning by each institution for managing the system in a very cost effective manner, the Governments both at Centre and State levels should have a clear- cut policy on consolidation and expansion of technical institutions with emphasis on economy of scale.
With the recent Government directives towards freezing of non-plan grants and also reduction in developmental grants despite regular increases in pay and allowances, the institutions have been taken by surprise and are accordingly finding it difficult to bring about the desired economy in expenditure in a short time. It is felt that both the institutions and the Government should undertake realistic planning for the present and the future. Through long term policy guidelines the institutions may be told of their obligations to enable them to prepare plans for running and developing the institutions without loss of quality and without the need for crisis management.
Substantial investments are being made nationally, both in public and private sectors, in engineering industries as well as in service sectors such as energy, petrochemicals, mining, fertilizers, processing, transport, telecommunications, housing, etc., all of which require significant technical manpower support. It is then but natural to expect that a portion of the investments earmarked for these activities is allocated to the development of the required technical manpower and such an approach built into the planning process. With such a philosophy, it is not at all difficult for the governments to mobilise adequate resources for development of technical education.
In a growing economy it is essential to increase the quantum, and quality of technical education.In this context Government support for new programmes in existing institutions and for the establishment of new institutions is unavoidable. Therefore, at a national level there should be a reservoir of funds that guarantees unhindered development of technical education. With such funds earmarked for financing technical education and R & D activities, this sector does not have to compete with other sectors for government support. Such a reservoir of funds can be built up by the Government of India either by collecting educational cess from industries and other user organisations or by setting up an Educational Development Bank of India or both.
A cess on industry is likely to be looked upon as another form of tax; further, other sectors such as health care may also demand similar cess for their development. An educational cess on industry may also be difficult to operate. In contrast, establishment of an Educational Development Bank of India (EDBI) by the Central Government appears to be a simpler and speedier approach. In any case, if and when an educational cess is collected, the proceeds should be fed into the EDBI, augmenting the resource availability.
The EDBI may be set up with shares by each of the State Governments totalling about Rs. 1,000 crores, matching contributions by the Central Government and from International Financing institutions, totalling about Rs. 3,000 crores. Shares may also be given to industrial houses and national and international organisations, augmenting the capital. Funds from the EDBI may be given as soft loans to Government funded, Government-aided and unaided institutions for their establishment and development, including new programmes, replacement and modernisation of equipment and other infrastructure.
At the State level every state should also initiate setting up a State Educational Fund (SEF) to give assistance to needy students in the form of loan scholarships.
2. ENABLING SELF-RELIANCE OF INSTITUTIONS
The need for self-reliance has been well recognised by the Government- funded and aided institutions though it may not be ever possible to become so self-reliant as to be independent of Government grants like the private unaided institutions. One of the first steps that could be taken in enabling the institutions to become self-reliant is to help them establish a corpus fund by giving initially the seed money and then giving grants periodically to match the fund generated by the institutions for augmenting the corpus fund. To allow the corpus fund to grow at a reasonably fast rate, it is proposed that Government grants to institutions should have three components, viz. Plan, Non plan and Corpus contribution. The corpus contribution should be a significant part-of the total annual grant and in no case less than matching with the contribution raised by the institution in the previous year through donations, savings, etc.
The institutions are expected to be able to attract donations and contributions for a variety of purposes both from individuals and industries in case the giving of donations and contributions is made attractive both through tax exemption and through suitable recognition of the donors by the institutions concerned.
In this context, it is pertinent to note that the Union Finance Minister in his budget speach for fiscal year 1993-94 mentioned :
"Hitherto, our institutions of higher learning have been almost entirely dependent on government funds. As government funds are limited, we must find ways of funding these institutions from industry. This will also bring them closer to industry and more responsive to its needs. I therefore, propose to raise the income tax deduction given to contributions to approved universities, institutes of technology, institutes of management and equivalent institutions from 50 per cent at present to 100 per cent...............
...... Indian industry needs to spend a lot more on research and development. In doing so, I would encourage industry to make use of the facilities offered by our national laboratories and research institutes. To that end, I propose to introduce a weighted deduction of 125 percent of the contribution out of income from business or profession for research programmes in approved national laboratories and institutions carrying out research and development in natural and applied science .............. "
It is understood that the proposed 100 percent deduction of contributions have not yet been implemented. It is also necessary clarify that the term "equivalent institutions" includes RECs, deemed universities and similar institutions. Similarly, in the matter of weighted deduction of 125 percent, the term "national laboratories and institutions" was explained in the Finance Bill 1993 only in a restricted sense leaving out "institutions". It is essential that this deduction is extended to educational institutions as well and appropriate orders issued accordingly.
There are several other measures that could be taken at the institutional level also to make donations and contributions attractive to the donors. Such measures include:
- Preferential rates for consultancy and testing charges to industries which make substantial contributions.
- Giving concessional fee rates for continuing educational programmes for nominees of donor industries.
- Reduced placement fee for campus recruitment where such fees are charged.
- Nominating donors of substantial amounts to advisory bodies and consultative committees of the institution.
- Naming the facility donated, after the donor.
Apart from financial, contributions could also include donation of shares, donation of equipment, construction of buildings, contributions of expertise, sponsoring of academic programme, instituting chairs etc. as well.
The corpus fund is to be invested in high yielding instruments. The yield from such investments should naturally be exempted from income tax. The capital shall be allowed to grow, and only a part of the annual yield shall be used to meet a share of the recurring expenditure. The institutes should also be given the freedom to transfer revenue out of testing, consultancy and extension services and annual recurring budgetary savings, if any, into the corpus fund.
Improvement of cost effectiveness in technical education has to be achieved through economy measures implemented at the institution level as well as through policy revisions implemented nationally. The large variation in the unit cost of technical education among different types of institutions show that there is ample room for reducing unit cost without sacrificing quality. The major expenditures in an institution are towards salaries, materials and supplies, services and maintenance, books and journals, replacement and modernisation of equipment and developmental activities such as provision of facilities and amenities, starting of new courses and R & D.
It is estimated that almost 80% of the recurring expenditure is on salaries of teaching and non-teaching staff and that both the teaching and non-teaching staff are not always adequately occupied. There is scope for increasing and rationalising the workload of the teaching staff. Salary burden could also be reduced further in the case of new institutions by employing only about 60% of the teaching faculty on a regular basis and the remaining 40% on part-time and contract basis. The part-time and contract faculty should come preferably from industries and R&D organisations. This will also enhance the industry-institute interaction. This strategy could also be adopted in the existing institutions for posts which become vacant from time to time.
There is also scope for reducing technical supporting staff in the new institutions by assigning some of their work in the laboratories and field to lecturers and post-graduate students. Administrative staff can also be reduced by adoption of modern office equipment and practices.Some of the non-technical supporting staff specially for such services as security, peons, photocopying, campus maintenance etc. can be reduced and the related services obtained on contract basis. Other measures to improve economy in expenditure are reuse / recycling of meterials; multiple use of available facilities; extended operating time; inhouse repair and maintenance of computers, instruments and equipments; minimising use of consumables, etc. By extending the working hours of the institution, with staggered timings for the staff, facilities can be used more extensively, and short- term, evening and part-time programmes also offered at no extra cost, bringing in revenue and thereby reducing unit cost.
It is noted that at times, mess, electricity, transporation, hostel rent and other charges, etc. for students are highly subsidised and such a subsidy needs to be gradually removed.
The Central and State level management structure for the technical education system can also be streamlined into leaner and more efficient ones with fewer personnel and hierarchial layers.
4. INCREASING COST EFFECTIVENESS OF INSTITUTIONS
Institutions funded and / or aided by Government are not always cost effective. At a policy level, several decisions have to be taken and implemented nationally in order to improve cost effectiveness. Some of the steps that could be taken to increase their cost effectiveness are:
- Optimise intake and enrollment strengths. Any new institution to be established should have a minimum intake of 180 with a minimum annual intake of 40 in any discipline. Starting of courses with less than 40 intake should not generally be permitted and starting of institutions with less than 3 disciplines and less than 180 intake should be discouraged. Preference should be given to an annual intake of 60 in each discipline. To take advantage of the economy of scale, institutions should be encouraged to have a total enrollment in the range of 1,500 - 2,000.
Establishment of new institutions should be permitted only after the above criteria have been satisfied by all the existing similar Institutions. - The work load of teaching staff, and the staff / students ratio prescribe by AICTE and presently followed by most degree level institutions in the country are based on the "Madan Committee" norms. These norms are generally considered to be on the higher side in respect of teaching staff requirements. While these norms recommend an overall staff / student ratio of 1:10, a detailed calculation of staff requirements for an undergraduate programme, strictly on the basis of recommended workload norms, will yield only a staff/student ratio of 1:12 including a 10% allowance for leave and training reserve. The staff / student ratio followed even in most of the developed countries is far less than this. AICTE should revise the norms for work load patterns and staff / student ratios in technical institutions, keeping in mind the experience of the developed countries in this matter as well as the special needs of this country. One aspect that should be taken into account is the desirability of using the services of postgraduate students as teaching assistants in return to the scholarship / assistantship given to them in postgraduate institutions, as is being done in developed countries. In the meantime, it should be possible to reduce the staff- students ratio in degree institutions from 1:10 to 1:15 and in diploma institutions from 1:11 to 1:20.
- It is widely acknowledged that the strength of the non- teaching staff in our public sector technical institutions of all types is unnecessarily and abnormally high. There is urgent need to reduce this, both for economy and efficiency. It should also be realised that this is a socioeconomic problem which has its genesis in the climate and attitude favouring employment generation without regard to economy and efficiency that prevailed during the earlier part of our post-independence period.
The AICTE should review the requirements for academic and administrative supporting staff. It is to be noted that except for academic supporting staff, it is not possible to have uniform norms for the non-teaching staff support. Fully residential institutions such as IITs, RECs and some of the universities have to support the municipal services in the campus township. Academically autonomous institutions have to discharge university functions such as those of academic bodies (Boards of Studies, Academic Council, etc.) and the examination wing. In contrast, state level government institutions will have many of its administrative functions looked after by the Directorate of Technical Education, the Government Secretariate, the PSC, the PWD, Treasury, Health Service Department, etc. Thus the norms will have to vary between different types of institutions except in the case of teaching staff and academic supporting staff. What is needed is a limit on their numbers as well as their salary component in relation to those of the teaching staff. Detailed norms should be worked out for both academic supporting staff and non-academic supporting staff for different types of institutions. Until this is done there should be a freeze on creating new non- teaching Staff positions and every attempt should be made to reduce the existing positions over all. - The current AICTE norms and standards for the infrastructural requirements of technical institutions are also considered to be on the high side. For example, the norms and standards for degree institutions recommend a dispensary with a plinth area of 700 sq.m and a staff of eight including a doctor, two nurses and a pharmacist. Similarly, a 30 strong staff is recommended for maintenance work. Few engineering colleges of repute and long standing in the country have such facilities nor do they seem to be essential requirements in most cases. Similar is the case with the requirements for jounals, particularly international journals, in respect of institutions without postgraduate programmes. Thus there is an urgent need to review and revise the AICTE norms and standards for technical institutions.