Should We Do Away With Subsidies For Higher Education?

Inclusiveness and equity are very important characteristics of a good public institution.

In the wake of a very public protest by students of the Jawaharlal Nehru University ( JNU) over a proposed fee hike, a considerable amount of controversy has been generated on whether higher education should be subsidised. In a conversation moderated by G. Ananthakrishnan, Yoginder K. Alagh and Shyam Menon underscore the importance of greater inclusiveness, diversity, and quality.

Subsidy in education produces positive externalities such as health improvement, and reduction in population growth, poverty and crime, and strengthening of democracy. Yet, there is a demand for removal of subsidies.

Yoginder K. Alagh (YKA): I think it is a little more than that. You are also building the economy for the future. If it had not been for the fact that we had built a whole system of the CSIR, the IITs and Central universities, we would really not have been having the major source of growth, which is software. Please remember that this is not about machines. This is [about] men and women who have the capability to be able to design systems. This is a matter of education, higher education. You have to have a very broad base.

Now, this notion that higher education is not funded or subsidised is a very antediluvian one, it is historically not true. Fees account for less than 10% of the expenditure on higher education in most European countries. In the U.S., it is true that fees account for a substantial part, more than 30% to 40%. But please remember that they have huge scholarship schemes. A girl or boy who can make it to college is taken care of. [But] they have to repay through their lifetime.