Thursday, November 04, 2010

Government enterprises urged to share 2% of profit to boost education

The government wants large public sector companies to share the burden of boosting expenditure on education. The Ministry of Human Resource Development (MHRD) has written to India's largest public sector units (PSUs), proposing that they part with a portion of their annual profit to raise the standard of school education, particularly in rural areas and urban slums.

"Initially, we have written to top 100 PSUs, including leading government banks, for giving nearly 2% of their profit for improving school education as part of their social responsibility," a ministry official said. "We are in consultation with private industry lobbies and will soon write to private companies on this."

Another MHRD official said the ministry was hopeful the companies would cooperate. "Diverting a small portion of the substantial profit towards school education would help in achieving the objective of providing affordable yet quality schooling to children of rural areas and urban slums..." Both officials asked not to be named.

Total net profit of all PSUs in 2007-08 was Rs. 90,000 crore (Rs. 900 billion), according to the MHRD. India's top 500 companies earned a net profit of Rs. 250,000 (Rs. 2500 billion) in the same year.

The Congress-led Union government plans to boost public expenditure on education from around 4% of the gross domestic product (GDP) today to 6% in the next few years, according to the MHRD. Around 237 million students are currently pursuing school education in India. But quality of schooling and high drop-out rates are major worries. Of every 100 students that enter class I, more han 55 drop out by the time they reach class X.

Currently, the cost of setting up a quality school is Rs. 3 crore (Rs. 30 million, but this may increase to Rs. 5 crore (Rs. 50 million) if better facilities are provided, according to MHRD estimates. Companies that accept the government's proposal will be asked to fund the setting up of a school as well as its recurring cost for a decade, or a total of Rs. 15 crore (Rs. 150 million). In return, the school may be named after the company and around 10% of its seats may be reserved for children of he company's employees.

"While up to 10% can go as discretionary quota, the remaining seats will be filled by the government," said the second official cited above. Having schools named after them will serve as publicity for the companies. The companies can also play an active role in the management and evaluation of the schools they finance. If they don't want to, the government will hand over the task to the Kendriya Vidyalaya Sangathan, which runs Central Schools, and Navodaya Vidyalaya Samiti, another MHRD-run schooling body. After 10 years, the company can either continue running the school or hand it over to the government.

U.D. Choubey, Director General of Standing Conference of Public Enterprises (SCOPE), an umbrella body of PSUs, said PSUs should contribute to school education as a social responsibility. "They are (already) doing various activities, including those in he education sector," he said. "MHRD should enter into specific agreements with individual PSUs for this."

Source: Mint, November 4, 2010
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