Our high school mathematics teacher taught us to use the decimal point in the numbering system only when it mattered the most. The recent Union Budget for the financial year 2023-24 was good in many ways. Critical comments from usual corners using the innocuous post-decimal digits was on the diminutive share of GDP invested in education. This metric has been the most beaten one since its birth in 1966, midwifed by the Radhakrishnan Commission that recommended 6 percent of GDP as investment in education.
The combined share of GDP by the Central and state governments is below 3 percent of GDP and the continuous call for 6 percent is a tall order, considering the priorities of the Central government which has defence, highways, ports, power, etc., besides other concurrent items, leave alone the state priorities. Does it mean education, being a major social infrastructure, is not important? The answer is clear: No. It requires clarity in understanding the financing needs to build world-class universities (WCUs) to address all the ‘ities’ of higher education—affordability, accessibility, inclusivity and quality. To address the four, it requires capacity, which faces a huge financial deficit.
The total revenue of the top three universities in the world (none in Asia) for the year 2022 is $16 billion and for the top three Asian universities (none in India), it is $3 billion. The top three universities in the world have a combined surplus of $1 billion for the financial year ending 2022. The revenue of the top three National Institutional Ranking Framework (NIRF)-ranked institutions in India is around Rs 2,000 crore. The total budgetary grant to all the IITs through the Ministry of Education is close to Rs 10,000 crore. Even if the non-ministry education grants are added up as ‘income’, the total to IITs will still be below the top three Asian peers.
The total budgetary support to Centrally funded institutions is close to Rs 40,000 crore in the latest budget. This comparison is only to give a perspective in the huge gap in finances, as India desires to build world-class institutions. The recent budget of 2023-2024 has allocated Rs 1,500 crore for the 10 public institutions identified as ‘Institutions of Eminence (IoE)’ to become WCUs. Let us begin from here. We need to understand that nobody has understood what WCU is and in the words of renowned American educationist and researcher Philip Altbach, “Every country wants a world-class university. No country feels it can do without one. The problem is that no one knows what a world-class university is, and no one has figured out how to get one.” Finance always tops the list of requirements to build a WCU. According to a World Bank report, establishing a WCU in the late 19th century required $450 million and 200 years. The University of Chicago, in the beginning of the 20th century, invested 20 years and more than $100 million to build a WCU.
The Cornell University spent more than $750 million in setting up a world-class medical school in Qatar in 2002. King Abdullah University of Science and Technology in Saudi Arabia was recently established at $3 billion and operates outside the purview of the Ministry of Higher Education. By an easy estimate, the current investment requirement to establish a WCU is close to $4 billion. Even if existing IoEs are converted to WCUs, the terminological swap can never fill the financial gap, as a result, widening the quality gap. The need to build robust financial roadmap is essential not only for IITs, but also for all higher educational institutions to compete nationally, and then, globally. At current levels of financing, the capacity-building exercise will fall short of the growing demand and expectations and to over-ambitiously expect online or digital to fill the gap is utopian. There is a huge need to alter the financial architecture that governs the higher education ecosystem with creative and flexible mechanisms.
The Standing Committee on Education, Women, Children, Youth and Sports in its July 2022 report has recommended implementing policy measures towards creating ‘self-sustaining’ and ‘self-generating’ universities by providing adequate autonomy, growth-friendly regulatory framework and enabling environment to raise significant financial resources. While the body and soul for quality and excellence is finance, the heart and mind is financial policies. In short: Big ideas matter, but for higher education financial policy-making, fatter purse matters the most. We need creative models of financing the higher education ecosystem. Is anybody listening?
S Vaidhyasubramaniam
Vice-Chancellor, SASTRA Deemed University
vaidhya@sastra.edu