IITs, fee hikes, and higher education

Yesterday I was part of a small panel at IIT Madras to discuss “privatisation of higher education” in the context of fee hikes at IIT Madras. The students were exercised at being asked to pay higher fees (after revision, it is Rs 90,000 per year for B.Tech. courses), but told me that I can express my opinion freely and they wanted a free exchange of ideas. Which is what occurred. The other panelists were Prof. Venkatesh Athreya, economist and former HOD at Bharathidasan University (and an IITian himself), and Mr Jimraj Milton, lawyer.

To summarise things very briefly: I felt that the revised fees are a small fraction of the expected salaries for most IIT graduates, and taxpayer money should not be going to subsidise students at India’s most prestigious institutes who will go on to lucrative jobs afterwards. (For example, the highest salary at IIT Madras for a B.Tech. graduate in computer science and engineering in 2011-12 was Rs 68.5 lakhs, and the average was Rs 24.67 lakhs. It varies across disciplines, but the overall average is still Rs 10 lakhs/year for B.Tech. graduates [source]. The revised fees over four years are less than half of this average.) Like the other speakers, I pointed out that the larger scandal is the complete failure to assure reasonable-quality school education. Though coverage has increased in the last decade, quality has not. The planning commission, and the Kakodkar committee, both recommend a scholarship scheme to ensure that any candidate who is selected is financially able to attend the IITs, and the government promises that nobody will be debarred from the IITs for an inability to pay. If these promises are kept (and skepticism of government promises is warranted in this country), I see nothing wrong in the proposals. But even if not, for the more lucrative B.Tech. courses at IITs, getting a loan should not be hard and the student should be able to pay it off quite quickly after graduating.

Prof Athreya’s view was that there is no pressing reason to raise fees, since they cover only a part of the expenses at an IIT and the major part of funding will come from the government in any case. He observed that 65% of tax revenues come from indirect taxes, paid mainly by the working class and poor, and corporate taxes are effectively very low because of various exemptions that corporates are good at negotiating. He also observed that, because of globalisation, corporations who don’t get sweetheart tax deals simply threaten to move elsewhere, and governments around the world cave in to such threats. India’s budget deficit, he argued, should be tackled by improving tax collections from big business, not by asking IIT students to pay fees.

Mr Milton argued that privatisation, in general, was a form of exploiting the poor for the benefit of the rich, and gave several examples (such as electricity, private couriers, primary education) that did not really convince me. Besides, I did not quite see where “privatisation” came in to the picture for the IITs, and said so. I was told the Kakodkar committee argues for “radical privatisation”. I had a look later, and it does not. It quotes some feedback as suggesting “radical privatisation” as one of several options, but what it recommends is simply that IITs move towards raising their operating — i.e. non-plan — expenditure from non-government sources, while plan expenditure will come from the government as before. The topic of the panel discussion, therefore, was perhaps not really appropriate to the pressing issue in the minds of the audience.

Largely, my views remain unchanged, but one important point did come up: what about students who do not choose to do lucrative jobs after studying at IIT, but join the government or work for the social good? And, in particular, what of students who want to do higher studies, such as a master’s or Ph.D. degree, at modest Indian stipends? The return on their expenditure for the B.Tech. degree would be much lower, and if they took a loan, paying it back would be much more challenging. So it seems clear that, in such cases, the fees should be returned to the student (or perhaps fees can be charged at the point of exit, depending on what future career the student is taking up). Anyway, a solution to this point is in the IITs’ own interest, since they are finding it hard to recruit high-quality faculty, and with the expansion of higher education, it is essential to persuade some of the best undergraduate students to go on to higher studies and an academic career.

I wonder how other countries — the US in particular — deal with this. Student debt is beginning to approach crisis proportions in the US. Graduate and postdoc pay is barely enough to subsist on. How are students who have spent heavily on undergraduate education persuaded to continue for higher studies? Or is this one reason why graduate departments and faculty positions in the US are dominated by foreigners?

Finally, my major concern was — why aren’t our private universities better than they are? In an ideal world, a private institute such as BITS would have far exceeded the quality of the IITs by now, and students would be flocking there by preference, and we would not have this debate. But while private universities are mushrooming, the older ones like BITS are still not comparable to the IITs, and the newer ones are largely money-making institutions with mediocre teaching and negligible research output. Prof Athreya observed that private educational institutions should be motivated by philantrophy and not business considerations, and this is not happening [update: he clarifies that one cannot expect pure philantrophy and he has no problem with profit as a motive, but it should not be the only motive]. How can the government encourage it to happen? Or should we depend on the government for quality higher education for the foreseeable future, even as primary education is now dominated in the cities by expensive (and, often, equally profit-driven) private schools?

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  1. Dr.D.K.Samuel

     /  June 7, 2013

    All our lives we Indians have a culture of freebies, just some fool pays for our necessities, We see that in free rice, free meals, free bus pas, free power,free laptops, free cycles, free books, free uniforms, free liquor free hospitals etc . As a country we never learnt to pay and demand better services. Coffee in college canteens should still be one rupee while we drink at Cafe Coffee day at Rs.99. Salaries should sky rocket but fees should remain at 1940 levels, Education is no ones birthright let people learn to pay and learn (after all it is Dad and Mum in Indian context who pay).

    • You think that the people here are not willing to pay for better service, and in the very next line you say we drink coffee at “Cafe Coffee Day” paying much higher than other places. I don’t think you are consistent here.

      I am not sure what you mean, when you claim that some “fools” are paying for our necessity. Also, the claim that education is no one’s birthright is severely flawed according to RTE act, 2009.

      The seemingly infallible observation that parents pay for the education in Indian context is not entirely true either. It appears to me that you excluded all PG students from your dataset.

      • Dr.D.K.Samuel

         /  June 10, 2013

        I am consistent because the same student who protests a fee hike spends so much and much more on lifestyle
        Yes the Honest (the have to be ) Government servants pay the taxes to the last paise, they are expected to subsidize everybody)
        Higher education is no ones free birthright, or something to be paid by someone somewhere, somehow.Hundreds of Primary school children study in leaky rundown schools, let the GOI choose what it wants to do, to pamper rich middle class kids or dirt poor children.
        For PG students free ships Scholarships, subsidized Housing,Internet food are paid by whom, the taxpayers of course. The NRI salary is for the student alone, nice bargain
        Happy if there are a lot of students who pay for their education AND take care of their Dad and Mum, Bless them, but from where do they pay, from their pocket of from the Government free ships
        OK One final question, will anybody ask how much foreign universities charge. Indians do pay the full fees and get a degree there without a comment. Only in Mother India all will shout.

    • Manu

       /  June 7, 2013

      after all there are lot of students Sir, who pay for their education AND take care of their Dad and Mum

    • Rahul Siddharthan

       /  June 7, 2013

      It mentions 15% private funding. I’d hardly call that “privatization”.

  2. Thanks for coming to our discussion and presenting your views. I have a different take on the issue.


    • Rahul Siddharthan

       /  June 7, 2013

      Thanks for the link. It is good to see a thoughtful debate on the IIT student side that engages all points of view.

  3. There are two important issues which need to be considered here.
    One, as you already mentioned, what happens to students who plan to pursue higher education?
    The second, and more importantly, is when taking inspiration from foreign universities, one should also look at good practices outside of the US. What about UK, Germany, France and other developed countries which also have amazing universities with good research output?

    As an example, in England, the graduates pay back their student loans only when their income reaches a certain cut-off (say x). So if your income is less than x (which would typically be the case of people doing Masters and PhD courses), then you do not pay anything. If your income reaches a level y, such that y > x, then you give away a small percentage of the difference (y-x) towards the education loan.
    This, I believe, is an amazing policy, implementation of which requires some good infrastructure – something that may be provided by UID / Aadhaar in future.

  4. I want to second Prashant’s observation here. The British model, introduced just a few years ago, draws on a much longer experience with the Australian model.The latter goes one step further: if the graduate goes into certain specific careers (teaching, nursing, etc), the loan may even be waived!

    My grouse with Kakodkar Committee’s fee hike recommendation has multiple roots [Sorry for the shameless plug: long posts here and here]. One of them is the way they chose to sell it: by claiming that this was important for the IITs to achieve financial autonomy. The implication is that IITs’ dependence on government money will go down tremendously. However, they added several caveats to their primary recommendation — full fee waiver for PG students, and for those UG students (nearly 50 percent of the UG population) coming from poor socio-economic conditions, etc. The bottom line is that the new regime is not really that different from the old one when it comes to “dependence on government funding.”

  5. You wonder why private universities like BITS have not caught up with IITs. One reason is the availability of public funding for research. It is relatively easy for faculty in IIXs to attract funding from central government agencies compared to private universities, In stark contrast I don’t think public universities are at any particular advantage compared to private ones while applying for, say NSF or NIH funding in the US. To build decent private research universities, it is important to level the playing field first.

  6. Rahul Siddharthan

     /  June 10, 2013

    @Abi, Prashant — yes, if fees are increased it makes sense that it depends on the career. Some people at the discussion (audience) felt that only IITians who go abroad to lucrative jobs can be charged those fees — ie, their employers can be asked to repay the fees before hiring them. The argument was that companies in India (including multinationals) pay Indian taxes so need not be asked to do this. I think a lot of separate issues end up getting confused in this sort of debate, but it is a valid point that a student who wants to do teaching or nursing or some form of public service should be given an incentive to do so.

    @w.ofo. – good point, but it may be a chicken and egg question — how many high-quality grant applications reach the DST or DBT from BITS, vs the IITs? Is it discrimination at work or something else? There is also relatively little research funding at the universities…

  7. Anonymous

     /  June 13, 2013

    Saar, philanthropy.

  8. suresh

     /  June 14, 2013

    I totally disagree that those IIT graduates who want to work in the NGO sector or the government or who want to do a phd should have their fees refunded. Firstly, if someone wants to work in the NGO sector or do a PhD, then that is her preference. No one is forcing her to do it. I don’t see why those want to go into the NGO sector or do a PhD should be treated any differently from their batchmates who want to work in the private sector.

    Secondly, this is open to all sorts of manipulation. How about those who join a NGO or a PhD programme, be there till their fee is refunded, and then leave? Can you prevent this? In theory you could do it by putting into place a rule which says that if someone goes into the private sector before five years or ten years or whatever, then they will have to pay their fees. In effect, you will be installing a bureaucracy to keep track of all IIT graduates who decide to pursue a PhD or join an NGO. Is this what we want (along with the attendant corruption)? Haven’t we had enough of the licence-permit raj?

    I agree that sometimes a student may not have a firm idea of what she wants to do until she is half-way through her programme of study. But this is a point that holds more generally. A student doing Mechanical Engineering may discover that her real interest is in Finance (any number of such examples). Should we refund this student’s fees? I really don’t see why we should treat a student who decides to go into the NGO sector any differently from a student who does Engineering and then goes into Finance.

    I guess the standard argument is that we should treat the two students differently because while the student who works in an NGO “does something good” the student who chooses to work in the industry does not. Not only does this have a very romantic view of the NGO sector — there is as much corruption there as in the rest of our society — it also ignores the very real benefits that industries and industrial products bring to our lives. And not every PhD student writes a thesis which is path-breaking either.

    If I were a sociologist, I’d say some stuff about the “Brahminical bias” blah blah blah but I’m not and I’ll stop here. Apologies for the length of the comment.

    • @Suresh – Thank you for not going into the “if you were a sociologist” stuff. Let me restate my point, which you don’t seem to have entirely understood. It is not about nobility of purpose or anything like that, it is about self-interest.
      1. We need new IITs (or equivalent), new universities, new educational institutions, all of high quality. The existing ones are not enough.
      2. We need high-quality people to staff these places.
      3. The highest-quality graduates in engineering in India right now come from the IITs.
      4. At least some of these graduates should have an incentive to continue for higher studies, so that we can hope that some of them will be faculty one day. At least there should be no disincentive.
      5. Charging high fees, and suggesting they take loans which they can pay back only with a lucrative job, is a disincentive.
      6. So what is the solution? (Other than going the US route of importing a larger fraction of our grad students and faculty — which will work only if we have high-quality institutions in the first place?)

      (As for other jobs in government, social sector etc — who said anything about NGOs? — the same applies. We need high quality people there too.)

  9. suresh

     /  June 15, 2013


    I am not convinced that building new universities (including IITs) is a good idea when we have shown little ability to sustain the quality of existing ones. However, let me concede this for the sake of argument. I am still not convinced that refunding fees after graduation to students who join the government, join a PhD programme or whatever is a good idea, for all of the reasons I mentioned above. I am not convinced that it will attract good faculty either.

    We can (and should) give scholarships (including tuition waivers) at both the undergraduate and postgraduate levels to encourage the “quality” students. (I put quality in quotes because it is not clear what this means and how it should be measured.) It may not work perfectly either — what scheme does? — but I much prefer that to refunding fees which in my opinion, will only add one more layer of bureaucracy and one more avenue for corruption without any compensating benefits.

  10. suresh

     /  June 18, 2013

    The issue of why private universities don’t do significant research is interesting. At least some of our better institutions (Indian Institute of Science, Indian Statistical Institute, even the Tata Institute of Fundamental Research) predate independence and were effectively private institutions in their initial years which is when they became well-known. Even after “nationalisation”, they functioned (and perhaps still do) as private institutions where the government interference is much less than in other institutions.

    The conclusion I would draw from this very limited sample is that private institutions in India are quite capable of producing quality research and researchers. It is worth noting, however, that not many of the private instiutions set up after independence (except those set up relatively recently — see below) have produced quality research or researchers. The question, of course, is why this happened.

    In the absence of a full-fledged and careful study, we can only guess and that is what I intend to do now. There is a high chance that it is incorrect and I apologise for that in advance. Anyway… At one level, I suspect that the government, with the notion of “commanding heights of the economy being reserved for the government” was not very supportive to the idea of the private sector doing fundamental research. Otherwise, there was really no need to nationalise IISc, ISI or TIFR. At another level, the resources that are needed to conduct research were perhaps not available. Even within the government institutions, the rules regarding the purchase and import of equipment frustrated and continue to frustrate (experimental) researchers. Pure theorists are not immune either.

    It is only in the Rajiv Gandhi era that the rules started to loosen a little. Perhaps it is not surprising that the Chennai Mathematical Institute, a private initiative of SPIC foundation, was started in 1989. We may not have world class private institutions in engineering but other than CMI, we also have world class private institutions in business (Indian School of Business — the scandal surrounding Rajat Gupta notwithstanding) or for that matter, in Law (Jindal Global Law School; take a look at their website and faculty: it is very unusual for an Indian institution to be hiring internationally). We need more such institutions, for sure.

  11. Rahul asks : “Finally, my major concern was — why aren’t our private universities better than they are?” And: “ Or should we depend on the government for quality higher education for the foreseeable future…”

    The answers to the questions are simple, the solution to the problem is, as usual complex. Take an IISER, say the one in Pune. Calculate what has gone in to its impressive growth; both the vital soft-skills and the substantial resources. If we are to see a 100 IISERs (or their ilk)* there is no question that the current private models cannot easily be seen as stepping into this kind of space and attract the kind of faculty IISER Pune has. The government is unlikely to be able to invest in a 100 IISERs, nor can it handle the management of such enterprises. The current private models, driven by profit through teaching, cannot attract the kind of research support from the government needed for quality. So, the answer is that we need private players partnering with the government, with the latter providing major research support and the former having a model that pays for infrastructure, and quality faculty. The solution is more complex, because of the range in quality and intent of the private players. It can become even more complex when the government responds with a one-solution-fits all view. I will be grateful to hear specific kinds of solutions. Should government partner with a few ‘educationalists’ in amplifying the IISER model? Should there be a call for proposals? What should its terms be?

    *I use the IISERs as a place- holder for something we may want to amplify and IISER Pune as a place-holder for the bar we want to meet. There are of course many other kinds of institutions needed and possible. But, the basic point is, how does one scale quality when government resources and management abilities are constrained?

    • Rahul Siddharthan

       /  July 11, 2013

      Dear Vijay,
      (to be honest: one part of my brain is going “wow, the DBT secretary is commenting on my blog asking for suggestions!” But the rational part tells me that this is exactly what to expect from you.) You point out the problems correctly and have obviously wrestled with them for years, and any thoughts from me must be superfluous because you must have thought about it all before. But here goes.

      I think you are completely correct that the private sector alone cannot provide the sort of resources that have gone into IISER Pune. This is not unique in India. Even the top private universities in the US depend largely on the US government for research funding. We cannot expect things to be very different here.

      But I am not convinced about the way we fund research in this country, and I think the key to stepping up quality research — in private universities and in existing public universities — is to democratise research funding. I am not sure how to implement it. But the idea is that anyone at any institution should be able to apply confidently for a grant (from DBT, DST, whatever) just as anyone can apply for NSF/NIH grants, with the full expectation that their grant will be reviewed fairly and carefully. I’m sure this is the theory right now. But as it stands, the grant application and the review process are nowhere near as thorough as the NSF equivalents, and therefore the approval process tends to involve much mutual back-scratching among the scientific “elite”; and also, even if a project in a university attracts significant funding, bureaucratic hurdles come in the way of implementation. So researchers from the non-elite places may feel discouraged even before they start.

      I think if top-notch scientists felt assured that they could carry their grants with them to private universities (and if those universities were supportive in their grant applications and in providing basic infrastructure — real estate, buildings, etc do not seem to be an issue in these places, while IISER Pune functioned very well for a long time in rented office space) they would have more success in their research wings. We need government funding, but not necessarily of entire institutions like IISERs — just of research activity that does not have immediately obvious commercial benefits.

      All this assumes that the private institutions are working out of good motives, i.e. to benefit the public, though not purely on a charitable/non-profit basis. Some are, but some (many) exist purely for profit, and academic standards are of no importance to them.


  12. Dr.D.K.Samuel

     /  July 10, 2013

    I saw a friend pay Rs 8 lakhs for a training factory for his son to attempt IIT JEE, I read that 450,000 applicants try, It is 36,00,000 lakhs or Rs. 36,000 crores, give or take 50 % still its near Rs. 20,000 crore business per year, that is why in Kota, Korean trainers come to train Indians. I think that IIT’s should also enter the training factory and earn at least 1000 crores each year
    Well what percentage of boys join with only self preparation, (maybe 3%), I just can’t understand why the students who pay what is asked in the training factories protest when fees are justifiably raised at IIT’s.

  13. Hi Rahul
    Youve addressed the three main fixes needed.

    The first (a fair and ‘democratic’ review system. We hope to have this better in place soon ( Next financial year). I will elaborate on what this means in my blog soon rather that use your space :-) Briefly, individual research proposals need to be binned into categories and the review system should deal with each category in the manner needed, and not in a one-review-size-fits all.
    The Categories could be:
    Technically incorrect: To be rejected
    Technically feasible but with little exciting potential for novel knowledge/policy/technology generation: To be funded but not beyond a modest cap
    Technically feasible and with some exciting potential for novel knowledge/policy/technology generation, but high-risk due to little preliminary data: To be funded with no cap, but only for a period of two years for the generation of preliminary data
    Technically feasible and with some exciting potential for novel knowledge/policy/technology generation as well as some preliminary data To be funded with no cap for three years
    (All subject to the current ‘task force limits’ which is about 100 lakh rupees for 3 years but can go up).
    Feedback on this is most welcome, and I have lots already.

    But this is the easier part of the the three points you raise and will be fixed. Provate institutions that are not-for-profit and DSIR recognised already get DBT funds generously.

    Portability of grants is not a problem! But the fundamental problem is that private institutions still do not attract the best in research, with some exceptions ( and again, the DBT funds those). Your third point: that they range all across the scale in quality. This is a serious issue in general, but from the research perspective, can we get a couple of dozen Christian Medical Colleges or Manipal Institutes where quality research does happen? Can BITS Pilani have 20 campuses, but with research similar to IIT-Madras?


    • Rahul Siddharthan

       /  July 16, 2013

      Dear Vijay,

      The funding plans look promising! Of course, other sciences (via DST/CSIR) and humanities need to be included, if we’re talking about quality universities. But just biomed is a start, too. Given the existing high-quality hospitals and very large number of patients, biomedical research should be an easily kick-startable area.

      Since we are on the topic, the other thing we can do is be more aggressive in recruiting foreign nationals. Europe is full of disillusioned scientists who see no hope in their countries and would be quite happy to come and work in India. Other developing countries — Iran, Latin America, etc — should also be a good source of brainpower. But our policies seem to be excessively nationalistic in this matter: it is very hard to get permission to appoint a foreign national as faculty. But this is essential if we are to expand higher education significantly. And, finally, treat the government-mandated salary as a base salary and allow top-up from grants, the way it is done in the US and (to a limited extent) by certain fellowships here. So you can earn more, but need to work harder for it. This would make India a more lucrative place to work in — otherwise our salaries are not competitive internationally (even if our lower living costs do compensate somewhat). Thoughts?

      • Dear Rahul
        These are interesting suggestions, variants of which are doing the rounds. I think these ideas will coalesce into specifics over the next year or so. Cheers


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