Monday, May 09, 2011

MHRD panel favours higher fees at central universities

The era of exceptionally low fees at central universities could soon be over, if the government accepts the alternative funding system suggested by the Ministry of Human Resource Development (MHRD)-appointed Madhava Menon Committee. The freedom to institutions to set their fees is one of the key recommendations of the committee. It has also suggested revamping of the public funding system to increase autonomy of the institutions as well as ensure a productive and efficient allocation of funds to institutions.

Given trends in growth of the higher education system and government allocation, it is clear that complete dependence on public funds is not a viable option. As the demand for raising the level of education at central universities to match global standards increases, public funding will not be sufficient to meet the increased demand for funds.

The committee has suggested that the institutes should have the freedom to raise alternative funding. This can be internal and external. Giving central educational institutions the freedom to decide the fees to be charged would be one way of increasing revenues. The university should also have a free hand in the quantum of scholarships to be granted. All of this will have to be in keeping with the broad policy guidelines of the government. It has said that funds raised by the central university or educational institute should not be adjusted against any grant from government agencies.

At present, any funds raised beyond government grants are adjusted against it. The committee makes it clear that external generation of funding has to be in conformity with general financial rules and policy. On internal generation or funding from government, the committee has suggested that all central institutions be given a block grants, with the flexibility to manage finances.

The annual revisions of the block grant will depend on the institutions overall academic and financial performance. It has suggested that government departments and ministries, particularly relating to science and technology, should provide a minimum 30% overhead on research and development funding.

To ensure more effective allocation, the committee has suggested financial incentives for overall performance. A stipulated amount of regular grant should be given to all institutions that are performing well. The grant should be enhanced to ensure parity with development requirements of the institutes.

A performance indicator will have to be developed which will reward those institutions that exceed the set requirements. This could be research, publications and so on. As part of this, it has suggested the idea of norm based funding. The committee is of the view that a special provision of grants should be made for institutions which show clear improvements in the gross enrolment ratio.

Source: The Economic Times, May 9, 2011

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