Thursday, April 21, 2011

Government yields a bit on new technical college norms

Caving in to pressure, the Ministry of Human Resource Development (MHRD) has partially rolled back the changes in the guidelines governing setting up of new technical institutes. Earlier the MHRD had revised the guidelines and made it mandatory for new institutes to pay Rs. 90 lakh (Rs. 9 million) as security money for a period of 10 years. Now, it has rolled this back to the original level of Rs. 30 lakh (Rs. 3 million), but inserted a condition wherein this sum would have to be paid in cash to the All India Council for Technical Education (AICTE), the apex regulator of technical education in the country. In turn, AICTE would invest the money in a fixed deposit and retain the interest earnings in a special account.

Private colleges and institutes were, however, disappointed with the changes and wanted the government to restore the original guidelines. They believe the move is a dampener to setting up new institutes at a time when the cash-strapped government is unable to make similar investments. Earlier, institutes were required to only furnish a bank deposit receipt for eight years and were allowed to retain the interest earnings.

AICTE member secretary M.K. Hada confirmed the development. According to a senior MHRD official, who requested not to be named, increasing the security money to nearly a crore rupees "sounds little unfair" as it will hinder new institutes coming up. "When the focus is on increasing access to education and making gross enrollment ratio (GER)in higher education to 30% from the current 13%, you should not discourage education entrepreneurs. But, we have to closely monitor the quality," the ministry official said.


Currently around two million students are pursuing technical education such as engineering, management, pharmacy, architecture among others. And overall, less than 15 million Indians are pursuing higher education, which is just 13% of those who are eligible or in the age group. HRD minister Kapil Sibal has reiterated on occasions that India would like to add 30 million more students in the higher education space and the country needs over 20,000 more colleges in a decade's time.

Last year, the government approved at least 600 new institutes and if all of them submit a security money of Rs. 30 lakh (Rs. 3 million) each in cash, then AICTE will have a corpus of Rs. 180 crore (Rs. 1.8 billion) on which it will earn an interest. Moreover, the council will keep the cash in a bank fixed deposit for 10 years, according to the new rules.

H. Chaturvedi, Director of Birla Institute of Technology at Greater Noida and Alternate President of the Education Promotion Society of India (EPSI), an industry lobby, said, "At an interest rate of 9-10%, AICTE is expected to earn above Rs. 1,000 crore (Rs. 10 billion) from this process in a few years. They are a government body and should not become a fund accumulator."

AICTE's Hada said the regulator is not making money rather it will help students in case of an institute shuts down. He said AICTE has encountered few instances when colleges furnish some fake receipt or withdraw the money before the expiry of the stipulated period. This will guard against any such attempts.

Private sector owns over 70% of the over 10,000 technical colleges in the country and Chaturvedi argued "government should not make private education unviable that too when government cannot fulfil the demand for such colleges." Chaturvedi indicated that this was part of a trend as earlier AICTE had imposed a charge Rs. 5,000 for each of the 10,364 technical colleges following the introduction of e-governance, earning it Rs. 5.18 crore (Rs. 51.8 million).

Source: Mint, April 21, 2011

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