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 Education for Life
Why quantity is important in education
The Financial Express, India Friday, April 23, 2010

The recent public policy decisions in education evade the fact that quantity leads to quality. the Governmnet artificially restricts the number of admits in higher education institutions. This is license Raj and not unfettered competition. Institutions are figuring out ways to differentiate and be more creative, writes Manish Sabharwal in the Financial Express.

A few recent moves in education public policy, though driven by honourable intentions, don’t recognise how quantity leads to quality. Putting ‘deemed universities’ on notice has not only created a long-drawn court battle but has also created a sharp arrow in the quiver of many state education ministers to demand ransom from all institutions. Crackpot regulators like AICTE are fining Manipal for taking 173 MBA students of the 7,830 applications instead of the 120 ‘sanctioned’. Consistent with AICTE’s Ayatollah instincts, they have issued a fatwa that caps every new engineering college to 540 students. More dangerously, it specifies 60 students per discipline. Does AICTE really believe that all these disciplines have equal demand? Do they have a secret model to predict job creation demand that nobody in the private sector does? To compound the damage, older engineering colleges with higher student numbers have been prohibited to increase numbers beyond what they are currently admitting, even if they are willing to invest in infrastructure and faculty. So, we are back to the licence raj rather than encouraging competition.

But there are early signs of something wonderful in education.


Institutions are starting to think about differentiation and becoming creative in their messaging if not in reality; ragging-free campuses, faculty ratios, faculty qualifications, infrastructure, openness to parent involvement, soft skills and spoken English curriculum, employer outreach, deferred fees and much else.

More importantly, many school and college ‘trustees’ are making a clinical calculation about their ability to generate revenue relative to embedded asset values. The obvious consequence of this calculation is the realisation that running a school is different from owning one and that many of these institutions may be worth more dead than alive, that is, the real estate assets must be deployed better or liquidated. The ‘deployed better thought world’ is leading them to sign management contracts or lease their premises to professional educational groups.


The potential policy implications of these trends are clear; the new Education Regulatory Authority must recognise that quantity is finally starting to drive quality out. It must accelerate this trend by rapidly lowering the entry barriers and licence raj that has hindered competition and made students hostages, not clients. This lowering of entry barriers must be accompanied by a one-time window during which existing managements could transfer control of trusts, migrate to Sec-25 companies, exit the business or, under specific circumstances, consider for-profit incorporation. Fundamentally, we must move away from education regulatory micromanaging student capacity and be patient during the five years that it will take for quality and differentiation to develop.

The unfortunate reality in India is that the most important decision a child makes is to choose his or her parents wisely. The only sustainable way to sabotage this ovarian lottery is a Cambrian explosion of education entrepreneurship.


In the final analysis, the most expensive school is no school. And a bad school is better than no school. And this is why education public policy must make the painful-in-short-run choice of quantity over quality.

This article was published in the The Financial Express on Friday, April 23, 2010. Please read the original article here.
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