Indian Computer Science (CS) & Information Technology (IT) Academic Reform Activism Consolidated Blog Document

Private study (informal data): (Illegal) Donation/Capitation fees in India from KG to PG of Rs. 48,400 crores (US $ 8 Billion) per year

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Private study (informal data): (Illegal) Donation/Capitation fees in India from KG to PG of Rs. 48,400 crores (US $ 8 Billion) per year

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I was passed on a document over email which seems to be the same as this one on the net here: (15 pages), and which is a private study of (illegal) donation/capitation fee from KG to PG in India. As it is a private study put up on a Mumbai IT security firm website (associated with/owned by the author(s)), one should not take the figures it quotes as validated figures. However, on reading/browsing through it, I felt that, at least some of its calculations do not seem outlandish, given what I have read and heard about donations/capitation fees in India over the past couple of years or so. But then there are no proper/authorised data sources for donation/capitation fees as they are illegal! [(Educational Institution) Management quota seats having higher fee structure seems to be legally OK. But, from what I have gathered over my readings, selling a management quota seat against a particular sum of donation money, is illegal in India. I think there is some Supreme Court ruling to this effect.]

Also, I think private educational institutions may be using this capitation fee/donations (black money) for some expenses related to their educational institutions like building infrastructure, labs. etc. I mean, one cannot presume that all this donation money is profit that is stashed away by the people who manage the educational institution, as the study seems to imply. In fact, I would not be surprised if there is an argument that it is this donation money from management quota seats that cross-subsidizes the open quota lower-fees seats.

But what is becoming clear is that it would be better if the donation/capitation fee is made legal so that everybody knows for sure what is going on. In my humble view, the rich paying donations for management quota seats which cross-subsidizes the lower-fees seats for the poor and middle class is a good thing. But the education and examination standards should not be lowered for these management quota seat students.

BTW here is the Rs. 48,400 crores approx. =  US $ 8 billion calc: Rs. 48,400 crores = Rs. 484,000 million (as 1 crore = 100 * 1,00,000 = 10,000,000 = 10 million). Rs. 484,000 million is Rs. 484 billion. Taking round figure of Rs. 60 for 1 US $, 484/60 is slightly over US $ 8 billion.

Sunday, June 29, 2014

Is Brazil blazing a new path for low-cost and high-capacity higher education that countries like India can follow?

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Last updated on July 1st 2014

Notes from

* Brazil's for-profit higher education companies have around 75% of the market! [Ravi: I guess that means that around 75 % of student enrollment in higher education in Brazil is in the for-profit higher-education sector. That is a great surprise to me!]

* The fees of Brazil's for-profit higher education companies are low. [Ravi: This is truly a pleasant surprise to me. Some private deemed universities in India have gained a strong reputation for excellence in education but their fees are exorbitant. It is great to see that in Brazil private  higher education companies provide low-fees education to around 75% of the country's students.]

* Online education model, adaptive learning materials, local teaching centre franchises with moderators etc. seem to be the ingredients of the winning formula of these for-profit low-fees higher education companies in Brazil.

--- end Notes ---

Ravi: India already has a widespread computer education private franchisee model network for decades (NIIT, Aptech etc.). Can they along with Ministry of Human Resource Development, UGC and AICTE, replicate this success of Brazil?

P.S. The same post has been put up on Google+ here, which has some interesting discussion captured in 5 comments. I have given below my part of the discussion:

Thank you for your very interesting views, Dr. Ramani.

I think it will be truly wonderful if CSR funds aid existing and create new top-notch universities & colleges focusing on research excellence as well as teaching excellence, which will charge reasonable fees from students (as against very high fees by some flourishing private deemed universities).

But I have serious concerns about whether such CSR funds will be able to cater to the huge number of students in India who are interested in pursuing higher education, many of whom do so in the hope that the degrees earned and knowledge gained will land them well paid jobs.

Perhaps the solution may lie in a mix where we have:

a) Government and/or CSR funded elite universities focusing on top quality research and teaching, while charging reasonable fees.
b) Top-notch private universities (and colleges) charging high fees but delivering great quality in teaching and decent research perhaps.
c) Low-fees, decent-quality, job-oriented for-profit institutions using online education technology, teacher centre franchisee model etc. which caters to a majority of the large section of students in the country seeking affordable job-oriented higher education (similar to what has been described in the linked article about Brazil).


I entirely agree that educational institutions should not be merely profit-oriented. Their emphasis must be service to the community by educating the community. In this context I think for-profit educational institutions would be like private hospitals in India. The private hospital must have service to the community as the foremost objective and not profit as the foremost objective.

The problem with not-for-profit educational institutions is that many of them descend into bureaucratic apathy and inertia. In a for-profit setup excellence gets rewarded via career growth and/or financial rewards which perhaps acts as a strong deterrent to bureaucratic apathy and inertia. Further, a for-profit setup cannot tolerate non-performers as competitors would then score over them in service quality.

However, like in the case of private hospitals, for-profit educational institutions run the risk of losing the community service focus and concentrating only on profit making, which would make them institutions that exploit society rather than serve them. Top level education regulators should have some monitoring mechanisms, backed by suitable acts in parliament, if required, to ensure that exploitative for-profit educational institutions are spotted quickly and forced to mend their ways or to close down.

The co-operative model for a university which you have described is interesting. During my nine year voluntary service stint (as Honorary Staff, Honorary Faculty and then Visiting Faculty) in a deemed university which offers free education to under-graduates going up to Ph.D., I came across many teaching and research faculty as well as non-teaching staff who offered voluntary services, usually as a short stint of some weeks, but sometimes full-time, to this free education university. I think people feel good about contributing in kind to such noble efforts. The backbone of the setup was full-time paid faculty and non-teaching staff who held everything together. I mention this as a practical working example of these type of community service oriented universities. The challenge, however, may be that replicating such institutions on a large scale may be very difficult, if not impossible.

But the co-operative model has share-holding and returns on these shares (investment). So that may help in significantly improving possibilities of replication of the model on a larger scale.

However, this co-operative model is also a for-profit educational institution. So this would be possible only when the law in India changes to allow for-profit educational institutions (with oversight by higher education regulators to prevent exploitation like charging students' exorbitant fees).


A correspondent responded over email as follows after the first exchange between Dr. Ramani and me (the correspondent was OK with me sharing it):

Re: what you and Ramani have said, I think we should not so easily shift the onus of providing high quality education from the government to companies. Education is one of the key markers of a liberal, progressive society and providing it must remain one of the main objectives of any government. They may choose to provide it themselves (through central universities, IITs etc) and/or to create the conditions under which other bodies can provide it. They must continue to set standards and monitor the development of education.

You may well ask, 'What's new? That's what we have now.'

We need to demand that the bodies that control education are headed by genuine scholars and enlightened administrators. There should be publicly accessible evaluations and the bodies must measure themselves by international standards. Reports of accreditation must be made public.

Companies have other core activities. It is not realistic to expect them to also run educational establishments without seeking some payback: branding, loyalty, training a workforce and so on which are all contrary to an open educational environment. If their CSR activities channel funds into good institutions (not run by them) that is a bonus.

--- end correspondent response ---

I wrote back as follows (slightly edited for clarity):

[Ravi: Referring to correspondent's view that government may choose to provide high quality education themselves (through central universities, IITs etc) and/or to create the conditions under which other bodies can provide it, I wrote:]
I tend to agree with the qualification that "other bodies" can be for-profit educational institutions (under oversight of top level higher education regulators).

I should also state that the government seems to just not have the money to create and run large number of higher educational institutions. I read/heard at least one HRD minister of state of UPA-II talk of PPP (Public-Private partnership, model in higher education. So, it seems to me, private funding is vital for meeting higher ed. needs in the country.

In the absence of for-profit education entrepreneurs (due to the law of the land not allowing them to operate), the private funding and private owned colleges by supposedly not-for-profit trusts, are from other sources, which do not seem to be very professional. I think that may be contributing, in a not insignificant way, to poor teaching standards in many private colleges in the country.

[Ravi: Referring to publicly accessible evaluations, measurement by international standards and reports of accreditation being made public (of higher ed. institutions i.e. universities and colleges), I wrote:]
This will be just fantastic. International standards accreditation with reports available on the net for anybody to view (and so, question) will be a great step forward for Indian higher education. I think NAAC and NBA, the premier assessment and accreditation agencies in our country, may be working towards these goals (like Washington Accord goal achieved by NBA recently), but there seems to be quite some distance to be covered before these goals are met. 

[Ravi: Referring to companies being involved with educational institutions having danger of companies seeking some payback like "branding, loyalty, training a workforce and so on which are all contrary to an open educational environment", I wrote:]

I tend to agree. Shareholders want dividend and other kind of returns. They are not so bothered about service to society. And ultimately the board of directors (of a company) is answerable to shareholders. So companies who invest in educational establishments even as CSR may not be able to avoid influencing that (educational) establishment to suit the company's interests.

--- end my response ---

The correspondent wrote back:

>> the government seems to just not have the money to create and run large number of higher educational institutions

The question to ask is, why not? Today the government spends less per capita on higher education than it did 20 years ago (see the UGC website). Instead of spending on sloganeering schemes that do little to change the economic situation or the hardship faced by the poor (since most of the money gets siphoned off before it gets to its target) it should be trying to improve their employment capabilities and, simultaneously, creating job opportunities.

Today, a lot of urban poor (say, housemaids, manual workers, etc.) spend from their own pocket to send their children to what they decide are better schools. There is so much commitment and drive there that could be channeled into effective job-creation avenues.

As tax payers, we should be demanding that the government spends more on education. Politicians will change policies only when there is pressure from the electorate.

--- end correspondent 2nd response ---

Ravi: Here is my edited response to the above:

[Ravi: Referring to why the government should not be directly involved in improving employment capabilities of the poor, I wrote:]
I think that (improving employment capabilities of the poor through education, and govt. getting directly involved in higher education in general) is a very complex area with huge challenges. Some of the reasons involved as per my opinion, are quite sensitive and so I prefer to not cover that topic in a publicly accessible Internet post.

As an example (of failure of govt. initiatives to improve employment capabilities of the poor), a local Puttaparthi youth came up to me a few days ago and asked whether I could teach him Microsoft Word, Excel etc. which might improve his chances of getting some assistant job in some Puttaparthi shop/small office, he said. I told him about some government efforts to provide free training in such subjects conducted in Anantapur, based on what I had read in the newspapers. He informed me that he had been through that course and got over 60% marks in the exam (and so, presumably, has the certificate) but that they did not teach anything much!

That was very disappointing for me to hear. I guess I should not form an opinion about this AP govt. initiative till I get more feedback but I must say I was not too surprised to hear it.

I guess I have given up on government only initiatives in the area of computer education to youth. They seem to carry some curse of failure with them.

On the other hand, a PPP model seems to be delivering some results, in areas like computerized services being made available to citizens at low cost. The Mee Seva program of AP (and Telangana now),, has been delivering good results in Puttaparthi.

The AP govt.'s computer education initiative for youth may have delivered better if it had been done in partnership with established (private) computer training houses like NIIT.

But then higher education is different from basic computer training. However, I now feel that increased govt. participation in running it, as against only regulating it from a top level, is doomed to failure. I can't spell out clear reasons. I feel I have seen enough of govt. failures and it will be money down the drain, or worse (as the govt. would not look at alternative solutions then).

I feel private companies using online education technologies may do a far superior job (than govt. directly) in delivering low-cost medium quality higher education to vast majority of poor and lower middle class Indians. I repeat, govt. must play a top-level regulatory role where it can boot out (private for-profit) companies that become exploiters of students.

[Ravi: Referring to the urban poor spending from their own pocket to educate their children and there being so much commitment and drive that could be channeled into effective job-creation avenues.]
Agreed. And I think these people would jump at Brazil type low fees private higher education model if it delivered job oriented skills. [And I see similar commitment and drive in small town Puttaparthi poor when it comes to educating their children. They desperately want their children to lead more comfortable lives than theirs and are willing to slog away for it.]

[Ravi: Referring to the tax paying electorate demanding from politicians that they spend more on education/improve education, I wrote:]
Having done some reading up on articles, interviews and speeches of some of the top HRD associated politicians, who were ministers/ministers of state in the HRD ministry, in the past couple or so years (Shri Kapil Sibal and Dr. Shashi Tharoor mainly), the situation is that the ministers themselves despair of the bureaucratic apathy of Indian academia (viewed as a whole; there certainly are islands of excellence like IITs, IISc, IIMs etc.). Dr. Tharoor wrote a (mainstream newspaper) article referring to (govt. funded) academic jobs as 'sarkari' naukris (where one's job is fully protected)! My view today is that we cannot expect too much from the politicians. The academic bureaucratic system is a monster that can take on powerful politicians too like how the IITs blocked some moves of Shri Sibal (I do not know whether the Shri Sibal backed moves were good or not good; I am just pointing out the limits that HRD ministers have in bringing in change in Indian academia).

I think too much of govt. involvement in funding and running higher ed. institutions creates institutions of apathy as against institutions of excellence. [Somehow, the accountability part of the govt. funded higher ed. institutions gets lost. Private higher ed. institutions depend on money paid by students (their customers) and so have to perform in providing decent education to their student-customers to survive in the private higher ed. market.]

--- end my 2nd response to correspondent ---

Saturday, June 21, 2014

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