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March 23, 2018

Budget 2017 and Education : Why India needs to think global

by Narayanan Ramaswamy, Head, Education & Skill Development, KPMG in India

The Union Budget is going to be an interesting exercise this year—with expectations that the surplus from demonetization will be used for development initiatives such as education and skill development. Regardless, they should be looked at as an investment for the growth agenda, rather than as a development element. In the past many Union Budgets, allocation towards education has largely been incremental in nature.

For example, last year saw an allocation of Rs 72,394 crore, compared to Rs 68,963 crore for the year before that (about 5% increase). This comprised of Rs 43,554 crore (3% increase from Rs 42,219.50 crore the year before that) for school education and Rs 28,840 crore (7.3% increase from Rs 26,855 crore allocated the year before that) for higher education. Given the importance of human resources for a largely services-centric economy and with plans to boost the manufacturing sector, this was considered relatively low.

Let’s look at the highlights of the previous Budget with respect to education—five significant ones in my view and their status.

— Ten private and 10 public institutions were expected to be categorized as world-class institutions—with a focus to compete at a global level. The guideline for this has been issued and is currently under review.
— Digital repository of academic records; the HRD minister has gone on record that, by 2017, all degrees and board certificates will go digital.
— Allocation of Rs 1,700 crore for 1,500 multi-skill development centres, with a target of skilling 1 crore youth in the next three years under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and allocation of Rs 500 crore for promoting entrepreneurship among SC/ST. Initiatives are under way—with NSDC driving the programme—though at early stages. There was an additional allocation of Rs 1,804 crore for skill development.
— Digital Literacy Mission for rural India with a target to cover 6 crore new households within the next three years. A grand scheme to train 6 crore rural Indians was announced in June 2016.
— Creation of a Higher Education Funding Agency (HEFA), with initial fund of Rs 1,000 crore. In September 2016, HEFA was approved by Parliament. HEFA is to be jointly promoted by the identified promoter and the ministry of HRD, with an authorized capital of Rs 2,000 crore. HEFA is to be formed as an SPV within a PSU bank or a government-owned NBFC (promoter). It is expected to leverage the equity to raise up to Rs 20,000 crore for funding projects for infrastructure and the development of world-class labs in IITs, IIMs, NITs and others.

There has been follow-up action in conceptualizing and planning for the initiatives announced in the previous Budget. A big push is needed in the area of implementation. It is important that these initiatives gather momentum in this financial year. We expect the upcoming Budget to support these initiatives and provide the funding and institutional mechanism to ensure that the monitoring and review happens to see to their completion.

Some of the other areas that the government should consider in this Budget are as follows:

New Education Policy (NEP): This much-talked-about reform has been unduly delayed. Before it loses momentum, efforts should be made to roll-out NEP (after wrapping up discussions and incorporating any changes). NEP assumes larger importance in the execution part—there is a big expectation of fundamental and path-breaking changes in teacher development, pedagogical reforms and curriculum changes to include learning outcomes and a learner-centric ecosystem.

Primary & secondary education: It should see a shift in ownership—more towards state governments. Any allocations through state governments to facilitate and encourage reforms in school education—such as assessing learning outcomes, vocationalisation of higher level classes, safety and infrastructure requirements, including labs, sports facilities, etc—would give the right message and support.

One of the outcomes of strengthening primary and secondary education, which could soon become an issue, is the lack of adequate universities. Our estimates suggest a supply of around 14-16 million seats available for a potential 50 million students who will pass out of the 10+2 schooling system by 2018. While the numerical shortage of seats is a big issue, the quality of institutions available is a bigger problem. This can be resolved by encouraging innovative and alternate modes of tertiary education. Technology-led innovations—such as the much-debated online varsities—could be a solution. Incentives and measures to encourage existing varsities and newer players to adopt this format can help address reach and access for the masses. Foreign universities participation should be encouraged and the earlier amendments at the UGC should be furthered to create a welcome environment for the well-meaning foreign universities to participate in this space. Right now, there is skepticism about the tax structure and UGC restrictions; this is deterring international participation in the Indian higher education space. As Indian talent goes global, it is imperative that our higher education institutions compete with the best in the world. A scheme to identify the top-100 universities and fund them to adopt relevant global accreditations (both course-level and institution-level) and time-bound plans to increase their competitiveness in identified global rankings can be a shot in the arm.

World-class universities: The announcement on creation of world-class universities has created a lot of expectation—both with government-funded universities and aspiring private sector players. This Budget should look at further strengthening this initiative. HEFA should be extended to provide long-term loans for private sector payers to start new universities under the state private university provision. The National Institute Ranking Framework (NIRF) must be expanded and strengthened.

Skills University: On the skills agenda, the National Board for Skills Assessment and Certification (NBSAC) is an important step in the Skill India initiative and this has to be strengthened. Along with statutory process, the Budget should have provisions to build capability and an organization structure. The Skills University is an interesting initiative which has not seen much movement. If this can be conceived along the lines of how the Nanyang Technological Institute (NTI, which eventually became the Nanyang Technological University—NTU), Singapore, was conceptualised—where practice was given priority—it would be a good step. In the university format, vocational training will be able to attract youngsters. Will this Budget give the impetus to this pioneering initiative?

India seems to be attracting a lot of global students in the recent past, especially from African and East Asian countries. The outlook of our education and skill development needs to undergo a big change. We need to start thinking global—in terms of attracting the best talent, in terms of students, teachers and other service providers. Similar to how the US, UK and Australian universities operate, we must change our regulations and outlook to be more accommodating and global. At the same time, we need to raise the standard and quality of our academic output to compete with the best in the world. This would need some fundamental changes in the education system that was designed post-Independence for self-reliance and acceptance to reflect changes in the learning process and future societal requirements. I believe this is the time to initiate the emergence of India-centric global universities—much like the times of Takshila and Nalanda—with Indian values and concepts. If the Budget could help build such new-age institutions that have a fresh approach and alternate modes of learning, leveraging the global changes and technology combined with Indian ingenuity, it could mark the beginning of a new era.

On the same lines, the concept of global skill development institutions makes eminent sense. If the world is going to get a large portion of its future human resources from India, what better place to shape them? Initiatives to have a skill development ecosystem that attracts and trains people for globally-relevant job roles—including providing the softer aspects required for migration and self-reliance—would give a whole new impetus to Skill India.

The general expectation is to see a forward-looking Budget with respect to education and skill development. I also believe strengthening existing initiatives will be critical and this Budget should provide for their institutional strengthening and implementation.

(Disclaimer: The views expressed in the article above are those of the author, Narayanan Ramaswamy, Partner & Head, Education & Skill Development, KPMG in India. The matter of this article has not been edited and has been copied from an e-news portal by skillreporter.com. SkillReporter shall not be responsible for any damage caused to any person/organization directly or indirectly.)