The New Economic Policy (1990) and Privatization

The New Economic Policy launched in 1990s with its account on economic liberalization, decentralization, decontrollization, foreign equality participation and privatization has, among other thing put the seal of acceptability on privatization of education as also of higher education. A logical corollary of the new-economic policy could be dismantling of the state machinery for the administration, financing and regulation of educational institutions.

It will allow the market forces to determine the size of student enrolment, the establishment of new institutions and the expansion of existing institutions, determining the curricula and methods of teaching and laying down the amount of cost recovery from the students besides tapping other sources of revenue. In fact, it would mean leaving the field primarily to private bodies.

That the Govt. is seriously considering involving private bodies in higher education is substantiated by the fact that a Bill for the setting up of private universities was introduced in the Indian Parliament and passed by the Rajya Sabha in 1995.

The main arguments in favour of privatization of higher education, according to the world Bank (1992) are :

  • It will resolve financial problems (of universities) and will ensure that resources are proportional to numbers.
  • Its potentially adverse effect on equity with in the sub-sector is blunted by the fact that most students at this level come from relatively advantaged social background.
  • It will encourage efficiency in the use of resources as providers become accountable to students.
  • In a market oriented economy, tuition income will give institution important signals about employment demand.
  • Privatization will increase diversity and choice in the forms of educational provisions.
  • Private institutions cost less per student especially in excess demand institutions since wastage is plugged.

In connection with the above stated expected results, the following may also be considered:

  • Will the Govt. withdrawal be in consonance with larger public good?
  • In case privatization is accepted in higher education where bulk of students belongs to elitist groups then representation from economically, backward sections will further be reduced. No privately university having are eye on resource generation, will allow to accept students for admission because of non-paying capacity towards fee, etc.
  • Private institutions will prang up for making money and commercialization of education will have disastrous impact.
  • It will affect the social security of the teachers, their pay scale as well. If the teachers do not perform well then they may be expelled from the job. This will lead them to find another vocation of teaching by doing away their shortcomings. Already there is shortage of teachers in schools; hence in this case the situation will become worse.
  • It is feared that privatization of education will divide the inequality gap of the society further.
  • Privatization may affect the quality of teaching as many private owners may not be paying the teachers as per the government norms.
  • It is feared that low cost per student may be obtained on lower investment in private sector. In this case teachers may not be paid their due scales of pay. According to Estelle James (1991) recruitment of low quality academics with inadequate qualifications at a low salary also reduces the cost of education. It is therefore emphasized that ‘cost’ should not be the prime factor for handling over the university system to private agency.

Further, the following points may also be taken into consider with regard to privatization of higher education.

  • Privatization based on differential demand, may be at the cost of national goals to be realized.
  • Dependence on public contributions, mainly fees, may lead to undue burden on students since quite a few of them may come from the weaker section of society. Virtually, it may introduce a system of cheaper but low quality education.
  • In market driven demand for course ‘soft’ subject-like History, Archaeology, Music, Languages, etc. may be neglected.
  • Basic research will suffer.
  • Privatization may encourage commercialization.

According to Gareth Williams (1997), the state should not abdicate its responsibility of financing and managing higher education for the following reasons:

  • To help ensure that all students are fairly treated.
  • To help avoid waste of talent.
  • To share the investment risks between those for whom it proves to be a good investment.
  • To enable society as a whole to benefit from the external benefits of having a significant number of its members educated to higher levels and
  • To encourage universities and colleges to pressure national policy priorities that might have less importance for any of other stock holders.

A major cause of privatization of schooling is that the government has failed to respond to an increasing demand for schooling. It has not opened schools, or aided additional classes in aided schools, or provided extra teachers as pupil numbers has increased. State responsibility for the funding and management of schooling has been steadily undermined since 1991. Growth in the number of pupils attending schools as a result of population growth had been accommodated in increasing classes and section sizes in the existing institutions. With the privatization the government in the states has sub contracted the publication of textbooks to private publishers although the syllabus has remained strictly in the control of the government. In the more radical form privatization can be seen in the form of private tuitions which has become institutionalized by now. Privatization of schooling will affect the teaching as and the social security of the teachers and their pay conditions as well. The dominant view is that the quality of teaching is directly proportionate to the insecurity of teachers. Most of the private institutions pay below the levels set by the government through the pay commissions and hence it will lead to the exploitation of teachers. We have discussed the pros and cons of privatization of higher education. The problem is multi-facet since the future of millions of students and the testing of the nation is involved, it is necessary that we should proceed cautiously. The conclusion that could be drawn is that while we should encourage private participation in administration, and financing of higher education, we should not hand over higher education to private sector completely.

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