Self Financing Engineering Education in Kerala- A Total Over view ( Social commentary on Education)

The Story Hitherto

VINOD CV

THE CHAOS IN THE SELF-FINANCING SECTOR IS CONTINUING WITH GOVT AND THE MANAGEMENTS PULLING IN OPPOSITE DIRECTIONS. EVEN AFTER THE INTERPRETATION OF THE TMA PAI VERDICT IN THE ISLAMIC ACADEMY CASE, THIS SECTOR IS MAULED BY CONFUSION, UNCERTAINTY AND DISORDER.

Since the late 1980s, Kerala students went in droves to colleges in Tamilnadu and Karnataka for professional education. In 2001, for instance, nearly 50 per cent of the students in the private professional colleges in these States were from Kerala. The AK Antony Government's decision to sanction private, self-financing engineering and medical colleges on a large scale from the year 2002-03 was intended to harness the huge demand in the State for professional education. The decision was expected to stem the exodus of students to outside states. The Government claimed that "allowing two private self-financing colleges would be the same as starting a Government college," the rationale being that 50 per cent of the seats in the private colleges would be in the Government quota.

Kerala had refrained from starting self-financing colleges, as a matter of policy, for a long time. In effect, it meant the state losing a great deal of money to neighbouring states. But being a state where the Left politics had played a major role in shaping policies and political formulations, Kerala had remained reluctant to allow private capital to dictate its educational policies. It was naturally argued that allowing colleges in self-financing sector meant the withdrawal of Govt from the educational sector.

But viewing from a different angle, self-financing arrangement is hailed as the bold and innovative attempt to release the strangulated energies of private enterprises. It unleashed money and resources even in the rural areas of the state. The new self-financing college managements proudly claim that in a state where investors fear to tread, they have already invested Rs. 2500 crores, provided direct employment to 18,000 people, and indirect jobs to another 25,000. Above all, they claim, they had re-routed the Rs. 400 crores that used to be invested in Tamilnadu and Karnataka every year.

It is a fact acknowledged by realistic people in the state that Govt cannot afford to invest any more money in the higher education sector. The shortage of resources available for investment, coupled with the high invisible subsidy doled out by the Govt (as low fees), while it runs an institution, ensured that it is not possible for the Govt to start business-worthy ventures any more. And it was almost sure that Govt cannot tamper with the fees that it can directly charge, given the peculiar political and socio-cultural set up of the state.

It is in this context that the idea of self-financing colleges was born. The contradictions between the requirement of technical manpower and the inability of the Govt to invest the required quantum of resources to establish the required institutions, opened the domain to private sector. The private managements have the money and resources at their command and at the same time they have the leeway to charge more tuition fees to meet the expenses. Even the Govt followed this model through the various semi-autonomous bodies under it, like IHRD & LBS.

Though now it is an endless dispute between former chief minister AK Antony (Antony termed the going back of private managements on the issue of Govt fees for merit seats as "nothing but a betrayal of trust''), and private managements, the civil society in the state had clearly understood that 50% of the seats in the private self-financing sector will go to students in the state merit list. With this condition, 50 percentage of students need to pay only the fees due to be paid by a student in a Govt engineering college. Social scientists and political observers felt it as a unique way of reconciling the egalitarian concerns of a socialist state with the ground realities of our times. In the Unnikrishnan Case (Unnikrishnan vs. State of Andhra Pradesh, 1993), Justice Jeevan Reddy evolved this scheme. Unnikrishnan Case judgement tried to check commercialisation of education and ensure social justice and quality in self-financing professional education.
The agreed and accepted arrangement based on the Unnikrishnan Case was working more or less smoothly in the engineering education sector. But Justice BN Kripal's majority judgment in the 11-judge TMA Pai case (Oct 31, 2002) and Chief Justice VN Khare's 5-judge bench judgment in the Islamic Academy case (Islamic Academy of Education vs. State of Karnataka) on August 14, 2003 changed the scenario. With these judgments, differentiated fees structure for merit and management seats became constitutionally questionable. As for the economics of education, “it is well known all over the world”, reads the October 31 judgment, “that those who seek professional education must pay for it.”
This changed situation was correctly echoed by Kerala HC, while judging a case regarding self-financing college fees structure, "the State must realize that after it had given the no-objection certificates to the college managements, the decision of the apex court in the TMA Pai case has brought about a sea change in the legal position. The State cannot shut its eyes to the hard realities in the post-TMA Pai era.’’ The Judges also observed that if freedom from the Government was the goal of an unaided institution, the Government cannot fix an arbitrary price on that freedom. This made Antony to remark that “though the self-financing managements had the right to approach the court, it was wrong on their part to have done so. We had not thought that they would go to court.”
These developments and the continued agitation of students forced the Kerala Govt to go for a bill securing the rights of 50 percent of the students, whom the Govt thought as deserving the earlier promised fee of Govt colleges. However, many of the provisions of the Prohibition of Capitation Fees and Procedure for Admission and Fixation of Fees Act, 2004, passed by the Kerala Assembly went against the grain of the recent Supreme Court's directions on admissions and fee structure in unaided, self-financing professional colleges in the TMA Pai case and Islamic Academy case. In fact, some of the provisions in the bill were similar to the ones in a 1993 apex court verdict (on Unnikrishnan Case), which was subsequently declared as "unconstitutional" by an 11-Judge Bench in October 2002 in TMA Pai Case {TMA Pai Foundation and Others vs. State of Karnataka and Others).
Meanwhile, the committee appointed by Govt under the chairmanship of Justice KT Thomas, as per the Supreme Court direction in Islamic Academy case to finalise a reasonable fee for self-financing colleges, came up with its own list of proposals. Those proposals too were in line with the Supreme Court directive of non-differentiated fees structure. The commission did away with the one-lakh refundable security deposit, which colleges were allowed to charge from management quota students, as Supreme Court was clearly decreed against the capitation fees in both Unnikrishnan and TMA Pai case.
But private managements resisted the attempts to restore the situation to the pre-TMA Pai Judgment days. The managements had gone to court against the Kerala Self-Financing Professional Colleges (Prohibition of Capitation Fees and Procedure for Admission and Fixation of Fees) Act, 2004, which insisted on a government-fixed fee structure in merit seats in private professional colleges. SC stayed the clause in the act pertaining to the cross-subsidization. A 3-Judge Bench of the Supreme Court said, while hearing three petitions filed by private college managements, that for the current academic year, the ‘uniform’ fee structure recommended by the Justice KT Thomas Committee, constituted as per the court's directions, would apply for both Government and management seats in all private, self-financing colleges. The SC shot down the provision that allows two types of fees - one for students from the management quota and another for students from the government quota. It also said that, a 5-Judge Constitution Bench would decide the questions rising about the constitutional validity of the law. As things stand now, the KT Thomas Commission’s recommendation on fee structure is being followed in Kerala.




The Fundamental Fault


A STUDY ABOUT THE INTRICATE BALANCE BETWEEN THE POLITICS-OF-ADMISSIONS AND THE ECONOMICS-OF-FEES IN THE SELF-FINANCING SECTOR AWAKENS ONE TO A FUNDAMENTAL AND COLLECTIVE MISTAKE COMMITTED IN THE PROCESS OF SANCTIONING COLLEGES INDISCRIMINATELY. CREATING COLLEGES AND SEATS WITHOUT ANY PLANNING OR PROGRAMME, WHAT IT LEFT IS A SORRY SCENARIO WHERE MANY COLLEGES ARE GASPING FOR BREATH. A LOOK INTO THIS FUNDAMENTAL FAULT.

Former Chief Minister AK Antony used to wax eloquent from many platforms about the transparent manner in which no-objection certificates were issued to start self-financing engineering colleges. He also used to repeat his now-infamous argument behind the mass sanctioning of colleges, "the sanctioning of two self-financing professional colleges would be equivalent to establishing a Government college,” as 50 per cent of the seats in these institutions would be allowed to be filled only from the Government merit list. With a very liberal or at least not-that-stringent criterion for securing permission to start a college in place, all caste and communal combinations without even an iota of integrity and professionalism in the educational sector ventured to start colleges. SFI leader KK Ragesh laconically termed it as a No-Objection-Certificate (NOC) issuing spree. But by doing so, Antony was successful in pampering the vested interests, which was already deeply entrenched in the educational sector.

And everybody was happy; right from the construction industry to local politicians. We had MLAs who thought that getting a sanction for an engineering college in his or her constituency was a credit due to him. Of course, it was true to an extent, considering the allied activities and business opportunities that get triggered in the locality.

But it is the long-term planning, based on a futuristic vision on the requirement of engineering graduates, that was sorely missing in the much-vaunted engineering extravaganza unleashed in the state in the name of librating shackled enterprising ideas. No studies were undertaken by the Government on the realistic needs of education in technical sector. Minister KM Mani remarked recently, "We have more than enough professional colleges now. The government granted permission to everyone who applied for the college without any restrictions. And this led to the worst situation now. In many engineering colleges nearly half of the seats are vacant and the managements are find it difficult to run the colleges."
Columnist Shashi Mehta wrote recently about vacant engineering seats, “Over 12,500 seats Tamilnadu engineering colleges, 8000 in Maharashtra, 6000 in Karnataka, 6000 in Kerala, and 1572 in Punjab are going abegging. Unbelievable, but true. And these seats are not in the unrecognized, street corner teaching shops run by fly-by-night operators, but in recognized and established engineering institutions, which have flourished because of the promise of rewarding careers after a degree.”
Courses and seats were sanctioned indiscriminately. This resulted in excess no of seats. Because of this reason, a good number of seats in many engineering colleges remain vacant even after 2-3 months from counselling. Unofficial estimates suggest that well around 5000 seats are lying vacant (refer the interviews with State Education Minister ET Mohammed Basheer and TN Jayachandran, given in this cover story, elsewhere). Private self-financing colleges were getting better students in merit quota in pre-KT Thomas Commission days. With all difference literally vanishing between merit and management seats, students are doubly reluctant to join these colleges as tuitions fee is beyond the reach of middleclass families (refer the interview with Prof. RVG. Menon, given in this cover story, elsewhere). A cursory study of student preferences in the last years with this year will corroborate this.

In this connection, Antony and the thoughtless bureaucratic apparatus may try to justify that the departure from the earlier agreed cross-subsidizing of fees is solely on account of the Supreme Court ruling, and that it is making life difficult for managements and students. To an extent, it may ring true. However, a deep study of the sector leads one to a different conclusion. Even if one had continued with the earlier scheme of cross subsidizing, the troubles some colleges find themselves in now, would have met them eventually.

In a scenario where available seats are more than required, those who wanted to join an engineering college would have got it from the merit quota of this or that college. In that case, some of the management quota seats will remain vacant. This way some colleges will get financially choked as the money required for running was expected from the unfilled seats too. The indiscriminate creation of colleges and seats points to the flawed and faulty ways in which a very serious affair of our collective destiny was handled.

Because, the root reason for the non-occupation of seats is the existence of excess number of seats and the inability of a good number of students to shell out the money required for the studies at the existing rate of fees. Managements can tackle the issue of financially handicapped students by offering fee concessions and scholarships, though it will itself affect the very economics of running colleges.

The only way to handle this situation is to raise the standards of the college, thereby building a brand value. This will attract good students to the institution. Some academicians suggest that an early completion of the counselling process will help stop students from crossing Kerala borders for admissions, as it is also the uncertainty prevailing here that is forcing them to leave the state for a secured seat elsewhere. Though self-financing managements argue this point vociferously, this is not going to alter the situation dramatically. Early counselling may improve the situation a shade better only.



Can All Survive?


THE JURY IS NOT OUT OFFICIALLY. BUT SOME HAVE DARED TO PREDICT IT. YES, ALL IS NOT WELL ON THE SELF-FINANCING FRONT. MANY COLLEGES ARE NOT IN THE PINK OF HEALTH.

A growing opinion in the technical education sector in Kerala is that all these new colleges are not going to survive in the heat and dust of competition. The stark mismatch between the seats available at the current fees rates and the willingness and resourcefulness of students to fill those seats are leaving gaping hole in the calculation of many managements in the form of empty benches in the classrooms. 30-40% seats in many self-financing colleges are lying unoccupied.

Of course, this is not true for all colleges. There are worthy institutions where seats are filled almost comfortably. Those who observe this sector closely, believe that some of the colleges will wither and vanish from the scene. The excess number of seats created at this rate of fees can be the main reason for not getting students. Added to it is the lack of professionalism, experience and skills to run an educational institution. The present Govt too cannot wash its hand off this fiasco. States an LDF state committee resolution, “The no objection certificates (NOC), to all applicants for the colleges, have been issued by the Government very liberally. It did not even examine whether an applicant is eligible in any sense to run a professional college.”

Many groups, neither having experience in the educational sector or any social service sector, have taken up the venture of starting engineering colleges as a business option. All these efforts would have survived and prospered if all went smoothly. But the indiscriminate number of colleges with the mindlessly high number of seats left even good colleges in a bit of trouble. Though the trouble is distributed across the spectrum, the burden is disproportionately borne by the weakest of the lot. The weak and the unprepared, without the real experience, expertise, perseverance and dedication to raise the levels of technical education is finding themselves totally unequipped to meet the challenges in the critically troubled times.

This is leading colleges into a vicious circle of failure. This starts from the failure to attract students in sufficient numbers to work out the mere economics of running an engineering college. This in turn leads to compromising the educational standards and the quality of faculty. Eventually, managements cannot ensure a good placement process. All these makes sure that survival hangs as a question mark for such institutions.



Simple Ways to Solve the Riddle


SUCCESS OF A SOCIETY DEPENDS ON MANAGING THE CONTRADICTIONS. NEW ISSUES AND PROBLEMS KEEP CROPPING UP, SEEMINGLY DEFYING SOLUTIONS. BUT A SIMPLE AND IMAGINATIVE APPROACH MAY SAVE THE SITUATION IN THE SELF-FINANCING ENGINEERING SECTOR.

Given the fact that a lot of investment has gone into this sector, it is prudent now to think about the solutions available than crying hoarse and pointing fingers. As the country envisions a double-digit growth rate in the coming years, technical graduates will be in great demand. Irrespective of the argument that excess seats were created in the sector, students are still keen to join engineering courses, provided the fees incurred is well within their capacity.

Thus it boils down to the fact that it is the inability of students to pay the stipulated fees the key factor for many seats still remaining unoccupied. The volatile situation in the job market is also not enthusing students to take up loans. Banks are also not very forthcoming to give loans to poor people. “The RBI guidelines, which state that education loans up to Rs 4 lakh need not have collateral security, also enjoin upon the banks to look into the income profile of the parents and ensure that the course proposed to be pursued by the student will lead to employment,” says KV Acharya, Joint General Secretary of All India Bank Officers' Confederation. But as SFI leader KK Ragesh argues, “Benefit of educational loans never reaches the needy students because as per the compulsory direction to all commercial banks by the Reserve Bank of India, one important criterion in sanctioning the loan must be the capability of the student to repay the loan.”

Since it is a colossal national waste that the faculties and infrastructure already made ready is allowed to go unutilised, the Govt should step in with comprehensive fees concession or scholarships. Govt can salvage the situation by offering scholarships to the financially weak in the Govt quota. “By shelling out 6 crores annually, the Govt can cover the financial expenses of at least 30% of the merit quota students,” says Prof. CI Abdul Rahiman, an office-bearer of the association of self-financing engineering colleges. “Govt can solve the whole problem by doing this,” he adds.

The remaining 70 percent would have the wherewithal to pay the existing fees. “It is not the merit / management divide that is required. The need of the day is to identify students who will have to forsake their engineering dream just because they don’t have the finances. Supporting them is the key,” says Fr. Jose Alex, Director of Rajagiri School of Engineering And Technology. Prof RVG. Menon feels that the managements must come out with liberal scholarships, “The only way out is the private managements providing scholarships to offset the difference between Government fee and the recommended fee”. He feels that those colleges who cannot find the resources to do this will have to quit this business eventually.

Another innovative solution is to provide a certain number of seats from each college, for international students. Studies show that the Indian brand can have takers in countries where a good number people of Indian origin reside like Mauritius, Fiji, Srilanka etc. Students from Middle East, South East Asia, and African countries are willing to come and have their studies here, if proper marketing is done. An imaginative attempt in this line, after putting in place world-class facilities, can do wonders.

Going back to the refundable deposit scheme of Rs. 1 lakh, which was in place earlier, might be one solution, provided the SC can be convinced that it is not capitation due to its refundable nature.

Another solution might be giving some sort of autonomy to colleges to fix their own fees. In that way colleges, which is attracting low student interest, can offer a low level of fees. Some observers argue that there is no logic in charging the same fees for a college in a city suburb and one located in a deep rural area, as the cost involved in the establishing and running the institution vary. So differentiated or variable fee structure might work. It is a way of leaving it to market. “Let students decide where to join after analysing the comparative merit and fee structure of different colleges. They can factor the infrastructure and placement activities, in their calculation. This scheme is followed in Anna University, Tamilnadu from this year,” says SH Musaliar, Chairman of TKM Trust and a member of the Anna University Syndicate.

THE CASE FOR CROSS SUBSIDY
Arguing for the Underdog


CROSS-SUBSIDY, SCHOLARSHIPS, FEE CONCESSION - WHATEVER NAME ONE CALLS IT, A NEEDY STUDENT MUST GET THE ASSISTANCE AND BACKING FOR PURSUING STUDIES. THE REALITIES AFTER THE T.M.A. PAI CASE ARE LEAVING A SAD SPECTACLE ON THIS ACCOUNT. CLEARLY, THE ESTABLISHMENT IS FAILING TO CHECK THE CURRENTS OF NEO-LIBERALISM EATING THE VITALS OF INDIAN STATE’S SOCIALIST ETHOS.

In India, we have perfected the art of making a mockery of well-cherished ideals. Lured by the colours of veneer, what is missed is the substance of ideologies. Is it justified to dish out subsidies for the studies of a rich student in the name of keeping the wilting banners of a welfare state? A true welfare state must tax the rich. The tax money must be used to ensure the welfare of the needy and disadvantaged. In this connection, just after the judgment in the Islamic Academy Case, columnist Rajeev Dhavan wrote, “The Supreme Court judgments on professional education have moved from `half-baked socialism' to `half-baked capitalism'.” He was tracing the shifts in stance of the SC from the days of the Unnikrishnan Case.

The logic of making the rich pay for the poor has a superficial ring, while analysing the cross-subsidy structure of fee collection that once prevailed in the engineering colleges after the historic verdict of Justice Jeevan Reddy in the Unnikrishnan Case. But the real and true inner colours of a mindless state will be sharply visible when it is known that the cross subsidy was not between rich and poor. It was between those who got high ranks and low ranks. This logical lacuna is one of the fundamental weaknesses of the argument for cross subsidy. May be the SC judges would have taken a lenient view of cross subsidy if it were presented as between the rich and not that rich. Many social studies across the world shows that those who are financially and socially well placed end up occupying the top slots in any competitive exam.

Not only were the institutions that followed the Unnikrishnan Case scheme confronted with revenue shortfalls, but most of the ‘free seats’ were occupied by students from affluent families, as their scores in the common entrance test were higher (their better economic and social backgrounds gave them access to better coaching) than those from less affluent families (the latter ended up paying exorbitant capitation and tuition fees to secure admission). This makes one to pitch against the idea of cross subsidy and this probably must have influenced the SC while pronouncing against it in the TMA Pai verdict.

Cross subsidy is not a sin though Supreme Court put it otherwise as far as fee structure in educational institutions is concerned. A cross subsidy scheme, which helps and benefits the poor, would have presented a much stronger case than the one that existed between those who got high ranks and low ranks. The argument of the high rank holders is that the fee concession is a kind of scholarships for them. Though it is true, it is not in tune with the ethos of the Indian state where considerations of equity is the highest motive when understanding the Constitution through the light of the exalted minds of our Constitution makers. Scholarship argument for high performers would have a resonance in the more capitalistic societies where achievement and merit are the worshipped deities. The question that remains is what we must do and where we stand in the process of restructuring our highly hierarchical Indian society.

The impulses of the Indian state while reordering the society according to the egalitarian instincts are a pretentious gimmick even in the best of times. Devoid of that cosmetic consideration in the changed and altered times, the state is now happy to leave the field open. How can one expect to justify what our establishments including the courts think - that a poor student shall bear the burden of studying, which he or she clearly can’t. The ultimate result shall be the poor leaving the hallowed precincts of learning, which will prove costly later to the overall well being of society in terms of the social engineering so painfully undertaken for the last 50 years.

This is the reason why many would like to opt for the cross subsidy scheme although SC had pointed out the irrationality of payment seat students subsidizing the education of merit seat student. This is all the more true when Govt made it clear by actions and pronouncements that it can’t any long subsidise education especially in the newly created institutions. “With no hope for Government aid, and no ready source for scholarships, cross-subsidy might remain as an alternative,” says TN Jayachandran. Nearly 25 per cent of the population in Kerala lives below the poverty line. The majority of the people have annual incomes below Rs.10, 000. Only a small percentage of the people in the State can afford the luxury of paying even Rs 38,000/- as fees every year for engineering or Rs. 1.2 lakh for medicine.

That cross subsidy is a bad and irrational strategy, is a purely sanitised analysis independent of social realties. Even worse is the cross subsidy between those who get high rank and low rank. The ideal is managements or Govt giving concession or scholarships to the needy students. But this doesn’t happen, as Govt is fund strapped and managements cant work out the economics of it. In that case, a cross subsidy between affluent students and the less affluent is perfectly in order, considering the ideals of our 50-year old independent nation state.

In fact, there is no need for the divide between merit and payment seats. A rich student even if he falls in the top bracket of ranks, doesn’t deserve subsidised fee. Just because one got slightly lesser rank doesn’t mean that he or she doesn’t deserve fee concession. Fee concession should be solely based on the financial capability of the student. “No one shall be denied education just because of lack of money,” says Father Jose Alex, Director of Rajagiri School of Social Sciences. “Poor students, even if they get lesser ranks must get fee concession. But not the rich students with good ranks. One who is capable of supporting his education must be allowed to do it,” he adds. That one got a top rank shall not come as a hindrance to pay the expenses. This must be made applicable to Govt colleges too. Lot of wealthy students gets subsidised education now. One shall not forget that a high rank, at many times, is the direct outcome of his or her status of being from a high-income group.