By the time you read this article, you would have most likely known the semi-finalists for the ICC World Cup 2023, and by the time my next article hits the stand, not only the winner would be celebrating, but also the semi-final results of a parallel ICC—Indian citizens’ count—would signal the celebrations for the finals of IPL 2024—Indian Political League. Between then and the 2024 finals, much of the policy focus will be on the implementation and dashboard analytics, and not on new policies. Mindful of that, I plan to take a brief hiatus on the policy suggestions and focus on some low-hanging fruits that require no toppling of the policy cart. Let me begin with the finance ministry.
Little would have Roman emperor Marcus Aurelius realised that his first endowed professorships in Athens in AD 176 for a partly amount would have been followed by many others and grown to gargantuan shape and size. The National Association of College and University Business Officers (NACUBO) estimates the market value of the North American universities’ endowment, by end of 2022, to be $950 billion. The size of European and Asian universities, though small, still add up to make the global university endowment cross over $1,000 billion. To put this in perspective, the top five university endowments valued at $190 billion is more than the GDP of over a dozen countries like Nicaragua, Senegal, Iceland, etc. University endowments is not uncommon in the US, which boasts an average university endowment size of close to $2 billion, a number that is unheard in the subcontinent. Can the unheard be made heard in India? Yes, provided there is a pathway designed for it.
When the education ministry announced the Institutions of Eminence (IoE) policy with a tall order of Rs 3,000 crore to Rs 5,000 crore of promoters’ net worth for private universities, I had written an article titled ‘Survival of the Fattest, not Fittest’, which went in vain. Whether the IoE-tagged fat universities are now Institutions of Eminence or Exorbitance, time alone can tell. Be that as it may, for a country like India, we need 100 genuine institutions of eminence, which are capable of building a sustainable roadmap for their progress comparable to global standards.
The annual dual (p)ranking exercise of Times Higher Education or QS are designed to set short-term goal posts to declare 100-metre sprinters as top athletes. University progress is not a 100-metre dash, but a multi-dimensional decathlon that requires sustained sources of finance as its nutrients of growth. The Supreme Court’s twin orders in New Noble Education Society & Ahmedabad Urban Development Authority has virtually provided little scope for universities to make progress by way of strengthening their financial resources. Not all universities have the capacity to attract voluntary and philanthropic endowments, but many are capable of generating their own, provided tax laws are progressively modified. One such modification by way of clarification can trigger positive waves for the higher education ecosystem.
The Finance Bill of 2017 has disallowed corpus donations by 12A or 10(23C) trusts to similar entities by not treating such donations as application of income. Beginning April 1, 2024, only 85 percent of such non-corpus donations shall be treated as application of income. While the intent behind the modifications is well understood, there is also a need to ensure that trusts or charitable institutions do not engage in avoidable expenditure to meet the 85 percent of income target to avail exemption. This compulsive rush to spend will not only result in rise of avoidable expenditure, but also rise in avoidable litigation.
The finance ministry should enable the creation of internal corpus or endowments by universities themselves to serve a larger cause of achieving higher educational outcome targets. Premier institutions like the IITs and IIMs have the Union Government, corporate and overseas alumni support. India’s educational landscape is certainly beyond IITs and IIMs. Though accumulation of funds for specific purpose is allowed under Section 11 for a period of five years, it is still short-sighted. We need massive internal endowments for visionary institutional decathlon, and not for short-sighted ranking sprints. This is how world-class institutions provide resources for student fee waivers, research support, infrastructure expansion, faculty development, social outreach, etc. Such internal endowments and corpus shall be subjected to strict scrutiny to ensure that the purpose for which it was created is undiluted come what may. There is little time now available for huge impact. Will it happen? Time alone can tell.
S Vaidhyasubramaniam
Vice-Chancellor, SASTRA Deemed University
vaidhya@sastra.edu