Dr Harivansh Chaturvedi Director Bimtech Official Blog

Making India a Hub for Management Education - A New Role for the Regulator

2012-10-29T05:11:00.001-07:00

Out of all the degrees offered world wide, an MBA is the most sought after degree. According to the AACSB, USA there are more than 13,000 management institutions in the whole world which are granting management degrees at under-graduates and post-graduate levels. Asian countries account for 6500 institutions out of these 13,000 odd institutions. According to the AICTE, currently India has 3,900 management institutes offering MBA./PGDM programmes which are approved by the regulator i.e. AICTE.

Numerically, Indian management education may be perceived big at global level, but we have serious challenges related to quality, research, faculty, infrastructure, industry linkages and employability. In some of the global rankings of b-schools, mostly ISB, Hyderabad and IIM, Ahmadabad are counted among the top 20. In spite of these limitations, can we make India a hub for management education? During the last 20 years, countries like Australia, New Zealand, Malaysia, Singapore, Hong Kong, UAE, Spain and France have been successful to a large extent in attracting MBA aspirants from all over the world.

Success stories of Singapore, Dubai and Hong Kong are not very old. Taking a cue from these recent success stories, India can aim at becoming a hub for management education and attract MBA aspirants from all over the world. It cannot be achieved overnight but will require concerted efforts from on the part of the Union Government, AICTE, industry bodies and management institutions. National level associations like AIMS, EPSI and AIMA can also lend their support to this endeavour.

If we have to make India a global hub for management education, a beginning can be made by identifying top 100 management institutions providing quality education with good faculty and infrastructure. These top 100 institutions can join hands together and form a consortium to market brand “India MBA” in select 50 countries from Asia, Africa, Europe and Latin America. They will have to formulate “Vision 2021” for Indian Management Education which will stratise collective efforts in upgrading quality of Indian institution according to the global trends.

AICTE was envisioned to play a role of a catalyst regulatory body catering to the burgeoning manpower needs of the Indian economy in the post-liberalization era. Instead of fulfilling this role, it has become a ‘Kamdhenu’ for the nexus of corrupt politicians, bureaucrats and businessmen helping each other in making quick money through setting up more and more technical institutions. All norms for infrastructure, faculty, and curriculum have been flouted. Institutions have been allowed to be set up in difficult and remote locations, far away from industries. AICTE has given licenses to set up thousands of management institutions without any reference to the actual manpower needs of industry.

Business education under AICTE’s control has grown mostly as a channel to make quick profits rather than as a serious attempt to groom managers suitable for the Indian and global economy. Exponential growth of B-schools during 1995-2011 has resulted in the increased supply of MBAs/PGDMs, far in excess of actual industry demand.

Growth of B-schools in India during 1950-2011

Period	No. of B-schools added	Average Annual Addition
1950-80 (30 yrs)	118	4
1980-1995 (15 yrs)	304	20
1995-2000 (5 yrs)	322	64
2000-2006 (6 yrs)	1017	169
2006-2011 (5 yrs)	2883	577

It can be observed from the above statistics that AICTE allowed a mindless expansion of B-schools during 2006-11, a period under which both the global and Indian economies witnessed severe recession and a slump in demand for MBAs. It is owing to the faulty working of AICTE that we are now on the verge of a “B-schools’ Bubble burst”. It has already started and according to a statement of AICTE’s Chairman, Dr SS Mantha, 65 B-schools are under closure. The Times of India has recently reported that 3 lakh seats of engineering and management courses could not be filled up during 2011-12.

The National Knowledge Commission (NKC) has noted the failure of AICTE in its regulatory role and suggested disbanding of both AICTE and UGC. The NKC Report (2007-09) states that “NKC advocates good governance rather than the prevalent system of prior control being exercised by AICTE in this sphere. The current regulatory regime focuses on punitive action rather than nurturing institutions”.

The role of AICTE has also been criticized by industry bodies for its failure to develop technical education in tune with changes in the industry, society and the global economy. FICCI, in its report on the Regulatory Framework for Technical Education, has said “AICTE has not been able to manage the multiple functions bestowed upon it as per its statutory mandate”. FICCI has recommended that AICTE be dissolved and NCHER should be set up with an objective of minimum regulatory interference and flexible norms for the functioning of institutes.

A New Role for the Regulator?

Nobody knows the future of AICTE since MHRD has been trying to merge it with the proposed NCHER. Much will depend on the dynamics of the Indian parliament when the NCHER Bill is introduced by MHRD. However, we need an effective regulator for higher education which includes management education also. Definitely, in the current environment, a regulator will not be expected to behave like an autocrat with a lot of punitive powers in its hand.

A good regulator of B-schools should be a professional agency having a positive mindset, equipped with trained professionals having the latest knowledge in management education and also having linkage with the Indian and global business through industry bodies and professional associations. It should be managed by eminent management academicians and industry professionals. They should develop a vision and mission for Indian B -schools based on a comprehensive survey of global business education. The regulator should establish relationships with Ivy League B -schools and international accreditation bodies like AACSB, EFMD and AMBA.

The question will arise about what should be the mandate for the regulator. Should it confine itself to developmental, nurturing roles or it should also wield punitive powers against those B-schools which do not fulfil promises made to the regulator, students and recruiters? Should the regulator provide a broad framework of business education and then leave it to the B-schools to work within that framework with scope for a lot of freedom, experimentation and innovation? There are different models of B -schools regulations in the world. Should we emulate models of developed nations where the independent accreditation agencies ultimately decide what is right and what is wrong for management education?

For next 10 years, whosoever is the regulator of Indian B-schools, can play the role of a gardner who does everything starting from seedling, planting, watering and pruning -allowing every plant to grow and every flower to blossom to their truest potential. AICTE, NCHER or any other agency designated for the regulation of B-schools can develop a new model of governance of institutions which is in sync with the current Indian and global realities.

Since almost all B-schools face shortage of good faculty always the regulator can establish 20 Faculty Development Centers (FDCs) for undertaking variety of activities in providing continuing education to faculty of B-schools. In twenty biggest clusters of management education viz. Delhi, Pune, Mumbai, Hyderabad, Chennai, Bengaluru, Noida, Indore, Jaipur, Lucknow, Kolkata, Raipur, Bhubaneswar, Trivandrum, Guwahati etc, FDCs can be set up. Each FDC can be attached with a reputed and well established B-school whose faculty will offer training programmes and Ph.D. programme to the faculty of B-schools in the neighbouring areas. These FDCs can produce 200 Ph.Ds and train 10,000 faculty members every year. Within the next 10 years, 2000 young faculty can be groomed to qualify for Ph.D. degree by these FDCs.

To meet the challenges of globalization, Indian B-schools have to adopt latest technology and go for internationalization. Both these imperatives are difficult, time consuming and require huge funds. Individually, many B-schools may not be able to invest hefty investment on high cost technology and international accreditation.

The regulator can also play a very constructive role in helping Indian B-schools to attract students from Asia, Africa and even from Europe and America. The Ministry of External Affairs and the MHRD can join hands to use our embassies for promoting Indian B-schools in these markets. Of course, we will have to work hard in augmenting infrastructure of top 100 B-schools where foreign students can live and study comfortably. India has all ingredients to become hub of higher education in management, engineering and medical sciences. If Singapore, UAE and Malaysia can become hubs for higher education, India can also attract lacs of students in management and other disciplines.

Indian Higher Education Reforms are on Back-burner

2012-10-29T04:34:00.001-07:00

Indian higher education has been one of the major national issue of concern during recent years due to various reasons. Never in the 64 years history of independence, higher education could attract so much attention at the national level.

India’s burgeoning two trillion economy can not sustain its robust growth unless supply of globally competitive and talented manpower is assured for coming decades. The National Knowledge Commission (NKC) 2006-09 under the chairmanship of Sam Pitroda in its final report submitted in 2009 opined that there is a quiet crises in higher education in India which sums deep. The time has come to address this crises in a systemic and forthright manner.¹

When UPA-II came into power in 2009, Kapil Sibal was made incharge of MHRD. After joining the MHRD, he has said very emphatically that he would initiate reforms to Indian Education in the similar zeal shown by Dr. Manmohan Singh in reforming the Indian Economy during the post-1991.

During the first 100 days of his tenure at MHRD, Kapil Sibal made several announcements and assured the nation that the major recommendations of NKC and the Yash Pal Committee would be implemented by his ministry during the 11^th plan itself. His articulation on educational reforms was widely welcomed and excited the intelligentsia to a large extent.

There has been nation wide debate on the directions and implications of higher education reforms proposed by the MHRD under the stewardship of Kapil Sibal. His proposal attracted diverse reactions from state governments, university teachers and eminent educationists. Recently Sam Pitroda has expressed his serious concern about poor implementation of the major recommendations of NKC. He was addressing a national conference of vice-chancellors called by the MHRD which was held at Delhi on March 25, 2011.

Since the XI Five Years Plan will be completed by 2012, it is worth stock taking whether we could achieve various targets of this plan on higher education. It is also pertinent to review the progress of higher education reforms for the last two years. Private sector has been assigned a very active role by the NKC and the Planning Commission.

Hence there is a need to assess whether there is a complete clarity in policy formulation and its implementation with regard to various issues related to higher education. According to Edge-2011 Report by Ernst & Young, the private sector accounted for 63 percent of all higher education institutions in 2006.

Assuming limitations of government’s resources available for future growth of higher education and also ever rising interests of the private sector in setting up new institutions in higher education, there will be a need for clear cut national policy about the respective roles of public and private sectors in higher education.

The current status of Indian Higher Education presents both promises and pit falls. During the last dacade the number of students pursuing higher education in India has increased from 8.4 million to 16.0 million which accounts almost 20 percent of the global population of university and college students. We have 26478 higher education institutions which are four times of U.S. institutions. Our current Gross Enrollment Ratio (GER) is 13 percent which is much less than 23 percent GER of China. It is also lagging behind 21 percent GER of BRIC Nations and 26 percent global average. One of the major reason for our poor GER is our low spending on higher education. Our public spending on higher education is 0.6 percent of GDP which is much less than required. Lack of quality in Indian Higher Education is a big problem. According to NAAC data, only 11 percent universities and colleges meet the criteria to qualify for Grade ‘A’ rating.

Our country can feel pride in producing some of the finest brains for foreign universities where they are respected for their thought leadership. Amartya Sen, P.N. Bhagawati, Ramkrishnan, Late C.K. Prahlad, Nitin Noharia, Ram Charan, Dipak Jain, Anil Gupta, Nirmalya Kumar, Jagdish Seth are few examples. But do we have world class universities and institutions?

According to ranking of top 200 universities of the world published by the Times Higher Education (2010), US had 72, UK 29, Canada 9, China 6, Japan 5, Hong Kong 4, and Singapore 2. None of Indian Universities could find a place in this list. Main criteria for getting place in this list is producing world class research by the university. Why our universities and centres of academic excellence such as IITs, IISc and IIMs are unable to compete with universities of China, Hong Kong and Singapore which have made progress only recently?

While discussing success or failure of reforms in Indian Higher Education, we have to seek answer to this question. It seems that our universities and higher education institutions are too much pre-occupied with teaching and producing poor quality degree holders.

Higher education in India has played an important role in producing millions of engineers, managers, teachers, accountants, scientists, administrators and others who are running our factories, offices, scientific labs, schools, colleges, farms. Today Indian I.T. industry is respected worldwide for which credit should be given to hundreds of engineering colleges and IITs which produced thousands of engineers and software developers with requisite skills and competencies.

Resilience and robustness of Indian economy is largely dependent on our higher education institutions. Higher education in India is also credited as a catalyst for social change because it makes it possible for youths from down trodden or poor middle class strata, to dream big and to translate dreams into reality.

Higher education in India assumes further importance due to growing significance of knowledge industries and services in the globalised economy. Capital or natural resources are now relatively less important for sustainable growth of a nation than the trained and talented manpower. According to Ernst & Young, current spending on higher education in India may be around ` 46,200 crores which is likely to increase to ` 150,000 crore by the year 2020.

Highly education is not only critically important for Indian economy, it can make our country a big player in global higher education by the end of this dacade. Currently around 100 million students are enrolled worldwide in higher education. By 2020, it is likely to rise to 200 million. If planned efforts are made by both governments and private education service provider, India can be made a hub for higher education by the year 2020 in disciplines like engineering, management, medical, pharmacy and social sciences. We will have to develop clusters of would class institutions in 100 cities where foreign students could study comfortably.

If we could attract few lacs foreign students every year, India can become a hub for higher education by 2020. It may look a gigantic task but it is possible if we have a national will for achieving it. Singapore and Dubai are two examples where proactive government policies made these city nations as global destination for higher education.

The Reform Agenda of MHRD

Indian Higher Education has been facing a big policy vacuum for a long period. Our university system, mostly designed on British model could not manage the massive expansion of higher education held during the last two dacades. The number of students in higher education increased from 49 lakh in 1990 to 1.60 crore in 2010. Since 2009, there has been a rush for reforms in higher education. It was overdue for a long time. There are nine bills formulated by the MHRD for enacting several higher education reforms. These bills are at various stages before becoming acts of parliament. These bills are (i) The Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010, (ii) The Prohibition of Unfair Practices in Technical Educational Institutions, Medical Educational Institutions and University bill, 2010, (iii) The Educational Tribunals Bill, 2010, (iv) The National Accreditation Regulatory Authority for Higher Educational Institutions Bill 2010, (v) The Universities for Innovation Bill 2010, (vi) The National Commission For Higher Education and Research (NCHER) Bill, 2010, (vii) The Protection and Utilisation of Public Funded Intellectual Property Bill 2008, (viii) National Academic Depository Bill.

Ideology of Reform Agenda

It may be pertinent to note that higher education reforms proposed by MHRD are not a sudden development. During the post liberalization era, the government policy on education was under pressure for not following market led reforms. There are three major reports on higher education submitted by three high-profile committees appointed by the Union Government during last dacade. They were – The Ambani – Birla Committee, The National Knowledge Commission (NKC) and The Yashpal Committee. First two committees suggested to the Union Government that the private sector should be assigned a greater role in higher education. Yashpal Committee favored less regulation of universities by the government and advocated self- regulation.

If we examine the basic ideas behind objectives laid down in all bills proposed by MHRD, we may find a common thread of ideology. The first and foremost idea is that the government should focus on primary and secondary school education by leaving higher education to markets upto a large extent. An underlying assumption is establishing altogether new organizations rather than reforming existing institutions. While setting up ‘new institutions’, high degree of autonomy has been proposed. It can be seen that in every bill a ‘quick-fix solution has been envisaged to a particular problem of higher education which does not provide a long-term or holistic vision for higher education.

The most glaring feature of all these bills is that MHRD has not done a nation wide consultation with all stake holders. Since state governments have constitutional power to manage higher education at state levels, at least they should have been taken on board before formulating these bills. This is the reason why several state governments under opposition parties have not liked some of the bills because their powers on higher education institutions and universities are likely to be curbed by these bills.

Reinventing MBA

2012-10-29T04:31:00.004-07:00

Indian MBA programmes, designed for the command and control economy of 80’ and 90’, have lost their relevance completely. The context of the global as well as the Indian economy has undergone sea change. Although our economy has grown fastly during last two decades, its biggest challenges are poor performance on human development, inclusiveness, sustainability and governance.

Indian B’Schools need to do soul searching and change themselves from class room teaching to innovation factories which produce socially responsible leaders who create sustainable value while addressing the challenges of human development, inclusiveness, and sustainability.

What should we expect from the Union Budget for Higher Education?

2012-10-29T04:27:00.000-07:00

On March 16, 2012, Finance Minister Pranab Mukherjee will present the Union Budget. Since direction of the national economy for next one year is broadly determined by the Union Budget, all sections of the society are anxious to know how the budget is going to affect their own economy. The organized section of the society viz. industrialists, traders, big farmers, trade unions etc try to influence the budget-making in their favour by sending their suggestions or meeting the Finance Minister directly. The Finance Minister also interacts with economists, business media and industry associations every year before finalizing the Union Budget.

Education, health and social welfare are crucially significant for the overall prosperity of the common man, but there is hardly any lobby to raise these pressing issues related to financial requirements for quality measurable level of education, health and social welfare. Teachers are organised at national, state and local levels but our student community has hardly any say on budget matters. Higher education in India directly affects future of 14.6 million youth in the age group of 18 to 23 years who are enrolled in our colleges, universities and institutions of higher learning. Their parents are also concerned about cost, quality and outcomes of higher education.

Since higher education caters to manpower needs of almost all sectors of economy, our industries, government services, hospitals, armed forces, police, R&D labs, schools, media, and civil society expect from colleges and universities to supply them manpower with required skills, competencies and abilities. There have been complaints about the competence level of graduates and postgraduates coming out from our universities and colleges which perceived to be less than adequate and recruiters have to spend large amounts on training freshly recruited manpower. NASSCOM and Merit Track have surveyed the employability of fresh BE/B.Techs and MBAs and found that hardly one fourth of them are employable by the industry.

In the above background, it is very important to debate the likely financial allocations to be made for higher education in the Union Budget to be presented by Mr. Pranab Mukherjee. These allocations will largely determine how we are going to attain higher education targets set under the 12^th Five year plan. The Approach Paper for 12^th plan says.

“During the 12^th Plan period, an additional enrollment of 10 million could be targeted in higher education equivalent to 3 million additional seats for each age cohorts entering the higher education system. This would significantly increase the GER brining it broadly in line with the global average.”

It has been proposed by the UGC that under the 12^th Plan, the GER should be increased from 17.21 percent to 25 percent. According to a recent statement of Mr. Kapil Sibal “By 2020, about 45 million students would go in for higher education from the present level of 13-14 million.” To meet this target by the year 2020, we will have to admit additionally 3 million students each year from now on. It will call for sizable expansion of infrastructure, faculty and funds. The Union Budget for the next financial year will indicate whether the Union Government will be able to provide huge funds to achieve GER targets for 12^th as well as the 13^th Plans.

The Union Government claims that it has provided sufficient funds for higher education during the 11^th Plan. The allocation for higher and technical education during the 11^th FYP was Rs 84,943 crores (as compared to Rs 9600 crores during the 10^th FYP). Out of this unprecedented allocation, higher education was allotted Rs 46,449 crores. It is ironical that much of this huge allocation could not be utilized fully due to various reasons including bureaucratic delays and political compulsions. Till March 31, 2011, only Rs 12964 crore could be sanctioned and utilized for higher education. This is a big failure in the governance of our higher education system and the MHRD should fix-up responsibilities for the utilization of a meater 28 per cent of the allocation.

In spite of big expansion during last two decades, Indian higher education is facing variety of challenges at all levels. Out of these challenges, one major challenge is related to the poor quality of education delivered by state universities and its affiliated colleges. Currently there are 289 state universities and 31,935 colleges which account for more than 90 percent of total enrollment in higher education. These state universities suffer from poor governance, high level of corruption and severe shortage of funds which ultimately lead to low standards. In the forthcoming Union Budget, higher education plans of state governments can be allocated funds by the Union Budget for academics reforms, better governance and infrastructural upgradations. Incentives can be offered to state universities for raising their own funds through upward revision in tuition fees and other legitimate means.

To deal with the low level of employability both in professional and general streams of higher education, special funding can be given for curriculum modernization, pedagogical innovations, and examination reforms. Our graduates now require skills beyond the basics of reading, writing and arithmetic (the 3Rs). Now there is need to focus can the 4 Cs (critical thinking, communication, collaboration and creativity).

The problems of Indian Higher Education are endemic and are well entrenched in our socio-political system. Prof. Craig Jeffrey of Oxford University, UK has done extensive researches on Indian campuses and published a book “Time pass : Youth, Class and Politics of Waiting in India”. In this book, he has termed Indian Higher Education as a “time pass” for the idle middle class youth who are unable to get a decent job on the basis of their degrees. They take admission in courses after courses for “killing” time and always look for a Jugad to grab a government job!

We cannot expect miracles from the Finance Minister for solving all the encrusted problems of higher education. But at least Mr. Pranab Mukherjee can be reminded a promise of UPA II to spend 6 percent of GDP on education out of which 1.5 percent was to be allocated for higher education. Currently only 1.12 percent of GDP is being spent on higher education. In the year 2010, Mr. Kapil Sibal had announced setting up a National Education Finance Bank (NEFB). Should we expect from Mr. Pranab Mukherjee an allocation of Rs.5000 crore for the equity capital of NEFB?

NEFB can be play the catalyst in designing a new scheme of educational loans with low interest rates (say 5 to 7 percent annually) and long payment period (15-20 years). Currently only 1.5 of the percent students are getting educational loans due to high interest rates and lengthy procedures to get a loan. Bank can also provide loans at low rate of interest to young entrepreneur for setting up schools, colleges and skill centers in small towns, cities and backward districts of the country.

Knowing well the severe resource constraints and political compulsions in budget making, we cannot expect big announcements and huge funds for higher education in the upcoming Union Budget. But we expect from Mr. Mukherjee that his budget should ensure that no deserving youth from poor or middle class family should be deprived of quality higher education for want of funds. We also expect that the academic standards of state universities and affiliated colleges should be raised up to the level of IITs and IIMs so that benefits of quality higher education are not confined to a tiny minority of the Indian youth. In a democratic and plural society, it will not be fair that only a privileged class should get world class education and aam aadmi be given degrees which do not have much intrinsic value.