Tuesday, June 30, 2009

End License Raj in education

Far more pertinent than the Yashpal Committee report on education is the note of dissent appended by economist Kaushik Basu. He urges an end to the licence-permit raj in education, as has been done successfully in industry. Glorious socialist tirades against commerce in education cannot obscure the fact that government-provided education, in schools and colleges, is often so pathetic that to call it education is preposterous.

Yet the same educational establishment that refuses to close down dysfunctional government institutions pretends that it cannot allow private ones, because this may lower standards! The market has weeded out substandard industrialists, and will weed out substandard private schools and colleges too. The government should create an independent rating agency that makes educational quality transparent, and ratings must apply as much to government institutions as private ones.

Foreign universities should be welcomed, including for-profit ones. India has a comparative advantage in the low-cost skills needed for education, and can become a global educational hub attracting global students — provided controls are lifted on fees and private institutions. The creation of human capital is a commercial enterprise no less than the creation of industrial capital.

Basu makes the point that the government lacks the money for creating hundreds of universities, and so should focus on creating a score world-class ones. These should pay top academics several times as much as run-of-the-mill academics. The Yashpal Committee is too socialist to stomach this: it prefers the existing, rotten system that pays everybody the same low level, and so induces every decent academic (Basu himself is an example) to seek greener pastures abroad.

Privatisation of education is a fact of life, and needs to be encouraged rather than viewed as a scandal. But for private engineering colleges, India could not have become a world power in auto components or software: the IITs produce the generals but the private colleges provide the troops. Basu adds rightly that replacing existing regulatory bodies by a super-regulator means very little if the latter has the old licence-permit mind-set. Such bureaucratic fiddling must not be confused with genuine reform.

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