iWatch, Mumbai : Newsletter for May 2007

Unchain & Unshackle Saraswati the Goddess of learning!

I am happy to enclose a copy of our note - Making INDIA a Knowledge Economy. see News-Letter of April 2007. It covers the area of education & HRD.

1. The Goddess of Learning needs to be unchained!
If India has to become a Dynamic and Powerful Nation in the future, the Goddess of learning, ‘Saraswati’ will have to be deregulated and unchained, like the Goddess of wealth ‘Lakshmi’ was in 1991.

2. Profit making in all areas excepting Higher, Medical & Technical Education, WHY?
After 1991, it is free to make any amount of profit in any of the following sectors of the economy:-

Whiskey, Rum, Gin, Vodka, Brandy, Beer & Wine

Cigarettes, Cigars, ‘Bidis’, Gutka, Tobacco, Pan Masala &  Lottery  business

Tuition Classes, Coaching Classes, I.T. & Software Training & Coaching Classes

3. Government is finding it difficult to finance Primary & Secondary Education
The present expenditure on education by the centre and states is Rs.91,000 cr. Education Cess collects another Rs.7000 Cr. (Total 3.32% of GDP). Private initiatives in the field of education is estimated to be another 4.7% of GDP and includes overseas education + Capitation Fees + Tuition + Coaching + unaided schools and colleges + I.T. training and coaching classes. Private initiative benefits mostly the 30% urban population of India.

It is estimated that the Central & State Governments require additional Rs. 100,000 cr. per year for funding Primary and Secondary education to reach attendance of 100% for primary and at least up to class 10^th. Additional  Rs. 100,000 Cr. per year is required for Vocational Education & Training. This may be shared with business & trade on a 1:3 basis between Governments: Business.

Education should be considered as an investment for the Nation and not as a cost. The spin offs are multifold in Human development as well as Nation building.

4. Make India an International Hub for Higher & Technical Education (H&TE)
India has the advantage of a PPP, purchasing power parity of about Rs10 = US$ 1. Countries like tiny Singapore (population 4.5m) are planning to have 150,000 foreign students. Australia (population 22m) has nearly 400,000 foreign students and earns about A$12 billion per year! India (population 1100m) has about 7700 foreign students and has NO PLANS for any regulated increase, because of ‘Licence Raj’ in H&TE.

Lack of capacity & quality encourage 120,000 Indian students to leave India every year for foreign universities resulting in a foreign outflow of about Rs.50,000 Cr. per year. Assume 50% for 2-year masters & 50% for 4-year under-graduate course, at any given time 360,000 Indian students. Some leave as tourists. Sufficient to build 40 IIM’s or 20 IIT’s per year! The RBI figures indicate about Rs. 20,000 Cr. per year. Many Indian students are supported by overseas NRI’s, PIO’s, friends and associates who pay directly for Indian students studying abroad.

If H&TE was deregulated, like I.T., there is no reason why India would not earn US$ 20 to US$40 billion per year and provide at least 10 to 20 million additional jobs in the field of education alone! The spin-offs in tourism, joint ventures and trade with other countries will be enormous. Let us give a level playing field to Indian Institutions before we open up the education sector to foreign players as per WTO & GATT.

5. Higher, Medical & Technical Education needs Deregulation & Decontrol
If Indian education has to achieve excellence, quality, innovation and cutting edge R&D the first step would be to deregulate and unchain the Goddess of Learning. Competition will induct quality, lower cost, innovation and excellence. Capitation fees will vanish once H&TE is decontrolled & ‘Licence Raj’ is scrapped. The actual fees will come down due to competition.

Poor students could get highly subsidized education. Deserving poor students will get scholarships and loans!

Student bank loans are only Rs. 12,000Cr. at present; this has a scope to go up to more than Rs. 100,000 Cr. once the quality of education improves within the country, inline with International standards.

India requires additional 10,000 PhD’s per year, the present structure cannot deliver.

R&D is suffering!

Krishan Khanna
Chairman & Founder
i Watch
211, Olympus
Altamont Road
Bombay 400 026

Cell: +919821140756
Tel:  +91-22-2353 5466
Fax: +91-22-2353 6782
www.wakeupcall.org

Email - krishan@vsnl.com