How much foreign exchange does India spend every year because a huge number of Indian students go abroad for study? Visit
12
lakh Indian students go abroad for education: AIU - The Hindu
and estimate the cost yourself.
This
article reports that only about 26,000
foreign students come to India for studies.
Why does this happen? Many great universities of
the world are run by endowments. Donations to one’s alma mater and to other
institutions are also there in India: Visit the following websites for a few
samples of what Indians are doing.
IndiGo
Co-Founder Rakesh Gangwal Donates Rs 100 crore
Kris
Gopalakrishnan's trust donates 225 crores for brain research
There are many more. Two of the
oldest contributions of the industry to Indian university education I know of
was the creation of the Tata Institute of Science (Now, Indian Institute of
Science) and the Tata Institute of Fundamental Research. Of course, the Tata
Group has contributed to the creation of several other institutions.
How many great “not-for-profit”
educational and research bodies do we have, that are not dependent on
government grants on a recurring basis? Surely, there are many charitable
institutions, but many of them are quite profitable set ups! Also ask why fees
in Indian educational institutions set world records!
India lags in the creation of world
class institutions with autonomy because our rules governing autonomous
educational and research institutions are too restrictive. A donation may build
a hostel or a big main building, or a new school. Our system allows that.
However, the continued use of such capital investments needs to be matched by
“revenue expenditure” which meets the costs of running the activity year after
year. We need endowments, wisely invested, to give a good return. Our system
hampers this, saying endowment funds need to be invested only in “approved
securities”, which exclude equities. Our constitution does not say that profit
making entities are born in sin, but we usually practice that belief in our
governance!
Of course, exemplary safeguards are
necessary when tax-exempt endowment funds are managed. There cannot be a whiff
of corruption, partiality, etc. This does not mean that the only investments
allowed are those which lose half the earnings to inflation! Efficient
investment requires investing in equities. Allowing endowments to reputed
institutions to be used efficiently is the surest way of making education
affordable. Endowments reduce the dependence on fees paid by students. They
allow the institutions to choose the students most likely to be the best
scholars; not the ones who can buy seats at any cost!
There seems to be one way to have the
cake and eat it too! Include approved index funds in the list of approved securities.
This means that the recipient institutions cannot selectively invest endowments
in companies run by brothers-in-law of influential people! They cannot gamble
on the success of fly-by-night companies! It also means that the endowment
would not crash to junk status unless the whole country’s economy crashes! With
good oversight by SEBI, index funds seem to be quite reliable in India.
We do not need big bureaucracy to
tell every educational institution how to invest its endowment funds. We do not
have to “take over” every institution under government control as soon as it
becomes big enough to earn an international reputation.
Do we have the will power to do
something like this? Or is it easier to let lakhs of students go out every year
to get an education they can afford?
Srinivasan Ramani
