Retreat of the State in Financing of Higher Education - Questions over the funding of MD University, Rohtak | Rajinder Chaudhary

by Rajinder Chaudhary

Fortunately, but unusually, recently financing of higher education in Haryana was under spotlight after the Finance Department of Haryana issued a notification sanctioning loan of Rs 147.75 crore to publicly funded Universities of Haryana [1]. Newspapers reported that this loan was in lieu of annual grant-in-aid. Right at that time, a joint forum of students’ organisations of MD University, Rohtak [2] had been agitating seeking roll back of doubling of various kind of fees and charges for services like migration certificate, confidential result etc. Following all round criticism, letter of loan to public Universities of Haryana has been withdrawn and existing pattern of grant-in-aid will continue. MDU has also reduced/partially withheld increased user charges. While this indicates a bit of back tracking by the State government, but issue of financing of higher education in state universities remains unaddressed.

Apparently, MD University administration had justified increase in fees on two counts- a lot of time had elapsed since these were last revised and as compared to the charges for similar services in various other universities of Haryana, even revised charges of MDU were lower. Perhaps, university administration is factually correct on both these counts yet it amounts to missing the wood for trees. And that important fact that is being missed is that during this very period contribution of State Government to MD University rather than increasing has come down even in absolute terms. As per latest budget estimates of MDU, it has come down from Rs 105 crore in 2019-20 to mere Rs 90 crore for 2021-22 (as per revised budget estimates) after touching a low of Rs 50 crore in the intervening period. For many years, whatever may have been initial budget estimate for grant-in-aid from the state to meet recurring expenses (Rs 130 crore for 2021-22 and Rs 150 crore for the current fiscal), actually it has been stagnating at Rs 50 crore. This consistency of grant-in-aid in a situation of rising prices and expanding education system (13% increased enrolment in MDU) is totally unwarranted. In the meantime, Grant-in-aid from the state to meet non-recurring expenses has also come down from 53 crore in 2019-20 to 40 crore in current fiscal, while it was nil in 2020-21. Total state grant has come down by about 15%.

So, even when grant in aid was being given rather than loan, over last many years, only about 20% of regular running or recurring expenses of MDU have come from public funds. As per the revised budget estimates for the last fiscal, it was less than 19%. If we include recurring expenses of MDU Centre at Gurgaon, whose budgetary provisions, for unexplained reasons, are given separately, contribution of state government to recurring expenses comes to 18.22% only. Even if we include all public funding, both recurring as well as non-recurring, and contributed by state as well as central agencies like UGC, it has moved between high of only one-third to low of mere one-fifth; in last fiscal it was 28%. Between 2019-22, it has come down by 13% in absolute terms. And this is not a recent phenomenon. CAG audit (Report 5 of 2017) of the University showed that during 2012-2017 too level of public funding was similar.

How has MDU met this situation of falling government funding? By running two very lucrative profit centres. One of these is examination branch. In fiscal 2020-21 about 61.5% of examination fee collected was saved after meeting all expenses and as per revised estimates for last fiscal, saving will be more than 60%. In current fiscal it is expected to be a little less, mere 56%! Other profit centre is Directorate of Distance Education. Net saving of DDE was more than 74% in 2020-21 and more than 67% in the last fiscal. It is anybody’s guess as to how has this high saving rate been managed. A clue may be found in the fact that of the 12 teaching posts in DDE, and pertaining to 12 different academic subjects, just one has been filled up.

Similar is the state of affairs in the other departments of the University. Excluding self-financing courses, out of 29 sanctioned posts of Professors, 24 are vacant. No, this is not a typographical error. Actual number of Professors is definitely more than 5 but those are promoted Professors. Similarly, out of 41 sanctioned posts of Associate Professors, 25 are vacant and out of 319 posts of Assistant Professors only 216 have been filled up, out of which some would have been promoted as Professor/Associate Professor. This means about 40% teaching posts in courses that are not under self-financing scheme, are vacant. So, teaching is taking place without regular teachers! Besides shortage of teachers, e.g., History department has no regular teacher though a retired teacher has been reemployed, there are departments with nil budget allocation for research activities, extension lectures, workshops and seminars (e.g., Departments of Economics and Public Administration). In the circumstances, other than doling out degrees, what more can be expected from the University?

Besides, running two lucrative profit centres and doing without regular teachers, University has worked out another smart way of managing its finances; rather than increasing charges that fall on all students, particularly those on the campus, who can come together and protest, it has been primarily raising those charges that fall only on some or on those who are not on the campus. As a result, tuition fee of students has not seen much of a jump and collections from tuition fee have actually come down from Rs 2.15 crore in 2020-21 to Rs1.93 in last fiscal. Over the same period aggregate, internal receipts saw a jump of more than 35%. As a result, against all logic and common sense, fees paid by students of Distance Education are much higher than that paid by regular students as DDE students being dispersed, find it difficult to come together and protest.

Paradoxically, this period of declining state funding has been accompanied with Government practically having veto power over all decisions of the University. Vide Statute 11A incorporated in MDU act in 1994, consent of state government is must in ‘matters involving additional financial liability’, and there can be only a few decisions that do not have a financial implication.

As a consequence of falling state funding, MDU has constantly been in the red. In 2020-21, last year for which final accounts are available it had deficit of little more than Rs73 crore (28%) and for the current fiscal, as per budget estimates, deficit is expected to be more than 132 crores (23.4%). Perhaps, it is to bridge this mounting deficit, universities in Haryana had been advanced loan, which it is rightly feared, may sometime in future become a ground for disinvestment of these loss-making degree awarding enterprises.

As other universities in Haryana too have been sanctioned loan, it clearly indicates that the state of affairs describe above is not unique to MDU. Anyway, there is no reason to believe that MDU is being particularly discriminated by the state government and other funding agencies. This is the general state of universities in Haryana, and one might say even in neighbouring state of Panjab (where however rather than relying on distance education to generate funds to the extent as has been done in Haryana, fees of regular courses have gone up much more than in Haryana).

As against this, what is the pattern of financing of higher education in the developed countries? OECD data shows that at the turn of the century, in 1998, Denmark, Germany, Iceland, Netherland, Norway, Portugal and Turkey had zero private expenditure in higher education. This means that in these 7 countries all higher education was publicly funded. And even in most of the other countries, private expenses on higher education have played a minor role. Why? Because education including higher education is not an issue that concerns students or their families alone. It concerns society as such. Sooner it is realised better it is.

(Author: Rajinder Chaudhary is a former Professor of Economics, MDU, Rohtak)