Companies hiring graduates from government-funded institutions like the IITs or IIMs may soon have to pay a special cess. The government is considering this measure to offset the subsidies it gives to such institutions.
The `education cess', to be levied on companies hiring technical manpower from government-funded institutions, is one of the schemes being considered to shore up sagging expenditure on higher education. Official figures indicate that there has been a sharp decline in expenditure on higher education.
Committees of the University Grants Commission and the All India Council of Technical Education have suggested that at least 20 per cent of the recurring expenditure per student has to be generated through student fees and other sources. In tune with liberalisation, a policy shift in favour of privatising higher education is in the works.
The practical aspects of levying `education cess' on companies and industries are being worked out in the education department. Official sources said the proposal is at an advanced stage and may be implemented soon.
According to a paper to be presented at the Unesco world conference on higher education in the 21st century beginning in Paris today, "new trends of thinking and overall constraint in resources call for private initiative and community support. The government wants to encourage private initiatives in higher education but not commercialisation."
The Indian delegation is being led by human resources development minister Murli Manohar Joshi.
The paper admits that decline in public funding in the last two five-year plan periods has had "serious effects on standards" due to increasing costs on non-salary items and emoluments of staff. From peaking at 25 per cent of the total share of education in the Fourth Plan, higher education's share has since dwindled to 8 per cent in the Eighth Plan.
The paper says: "Higher education is in financial stress. Generally, it is felt that the levels of fees in higher education in India are very low and that there exists much scope for increase in the fee and for rationalisation of the fee structure. This is more so in the case of higher technical education."
There are higher education institutes that are trying to be financially self-reliant by raising resources from the corporate sector and industry. The government has promised incentives to both the institutions and the donors. Such institutes are promised matching grants by the government, which will not be taken into account while extending other routine grants.
The paper says the donors are offered fiscal incentives, tax deduction at the rate of 125 per cent of the contributions to professional institutions and 100 per cent to other educational institutes. Of the two main sources of funding, the government sector and the non-government sector, the share of the government has increased while that of the other sector has "declined steeply".
The paper says, due to rupee devaluation and price rise, and the consequent rise in prices of books and journals, many universities and higher education institutes have had to make "very serious cuts" in their library budgets. Inflation and the increasing number of students (nearly seven million) have been identified as other factors leading to the crunch in higher education finances.
