The planning commission has suggested the idea of allowing higher education institutions to run for-profit. In the final draft of 12th Five Year Plan, the commission has incorporated this suggestion despite strong opposition from the ministry of the HRD.

The commission argues that the philanthropy-driven institutions do not have the resources to bridge the demand supply gap in higher education. Enrolment in higher education in India has increased over the past decade. According to a recent report by University Grants commission (UGC), number of students enrolled in higher education institutions doubled from nearly 8.4 million to 17 million in a decade.

The UGC report also shows that the number of degree granting universities in India has more than doubled from 256 to 564 in last 10 years, primarily due to deemed-universities and private universities.

But does that really mean that private institutions should be given free hand in making profit to meet the increasing demand? No. For profit, higher education model will allow these institutions to charge any amount of fees they want to for a course. It will make education exclusive for those who can afford to pay for it.

Today many private higher education institutions charge huge fees for professional courses. Some even sell seats for an additional cost, which do not go on record. This allows these institutions to make huge money.

This is mainly because of two reasons – first, most of the professional courses are only offered by private institutions; secondly, there are many students who are ready to pay anything to study a professional course, engineering or medical particularly. With the huge investment these institutions are able to build infrastructure and attract good faculty.

The commission says higher education institutions are allowed to charge whatever fee they want to, on a condition that they will be taxed. This might help government to collect revenue which otherwise goes unaccounted today. But at the same time, we need to understand that this financial burden will be transferred to students.

Also, the commission argues that it will come out with large scale scholarship programme through this revenue. But how many of the scholarship will it be able to offer – 100, 500, 1000? Seeing the increasing competition for each seat it will be really difficult to choose some and leave others.

Today at least families belonging to middle class and above can afford to give private higher education to their children. But if these institutions are given free hand, children from these families will also depend on these scholarships. So a child, who today competes for a particular seat through an entrance examination or cut off marks, will then compete for scholarships to study the same course.

Thus, instead of giving free hand to the private institutions to make profit, the government should focus more on improving its own capacity so that it can offer variety of professional courses to students and also increase admissions. Also, it must focus and invest on promoting and conducting research which these professional institutions do not do.

Talking about the public expenditure in education, in 2009, it stood at 13.63 percent of total public expenditure and 3.77 percent of GDP. Of this the higher education got 32.3 percent.

The gross enrolment ratio (GER) for higher education has shot up from 12.4 to 20.4 percent in last few years. HRD minister Kapil Sibal aims to increase it to 30 percent by 2030. Despite of growth in terms of number of colleges and enrolment the numbers are not sufficient enough to cater to the education needs of increasing young population of this country.

Sibal says that it is difficult for the government to do that alone and it will need a lot of help from private players. But even then he never favored to give free hand to these institutions.

These institutions must participate in nation building but should not be allowed to enter this discipline only with a motive to make profit.