Reforms 2.0

Divert Funds From IITs to State Universities

Reform Idea

The union government should divert budgetary support from established IITs & NITs to ailing state universities.

IITs and NITs, in turn, must raise funding from alternate sources – alumni, foreign university collaboration, industry partnerships, increase in fees, etc.

What was the intention behind the regulation we’re trying to reform?

When the first IITs were setup, the aim was to create institutions par excellence that nurture extraordinary technical brains, trained in an atmosphere both of original research and of practical experience. This was considered necessary for ensuring India’s prosperity in the post-war period.

The Institutes of Technology Act (1961) declared certain Institutes of Technology as institutions of national importance. This Act mandated that the Union Government shall “pay to each Institute in each financial year such sums of money and in such manner as it may think fit”. Originally the Act included five IITs – Bombay, Delhi, Madras, Kanpur and Kharagpur.

What began as a support for 5 IITs currently encompasses 23 IITs (8 of which started in the last 5 years) and 31 NITs.

What were the unintended consequences?

Given its limited resources, the union government cannot contribute towards improving state universities, which are languishing in terms of both research output and teaching.

Established and premier IITs and NITs are being improved at the cost of crumbling state universities. As per the 2017-18 Union budget, Rs 11,296 crores out of a total higher education budget of Rs 33,000 crores is for IITs and NITs. Established IITs and NITs receive a lion’s share of this funding. Union Government’s scheme for supporting higher education in states – Rashtriya Uchhatar Shikhsa Abhiyan or RUSA – received 1300 crores. For comparison, even IIMs, which boast of illustrious individuals being their alumni, received 1030 crores.

There is no sunset clause for any institution. Once established, an IIT or a NIT continues to be funded indefinitely by the Government of India, even when such funding is no longer essential to its survival.

Why is this reform important and what will it achieve?

Nearly a million young people join the higher education system in India annually. Currently, 94% of the students enrolled in higher education attend state universities. State universities are caught in a vicious cycle – poorly funded institutions are unable to attract talented faculty and staff, and, in turn, cannot improve their research or teaching quality, which leads them to not being attractive to private funding.

This reform will help MHRD’s department of higher education achieve its stated vision -“To realize India’s human resource potential to its fullest in the Higher Education sector, with equity and inclusion.”

If funding for state universities will not increase, then their standards will continue to deteriorate and India will continue to churn out unemployable youth. This is not to say that increasing funding will solve all the problems, but it is an important part of the solution.

What is needed to carry it out?

Just as the Union Government helped the states with large amounts of funding in implementing Sarva Shiksha Abhiyan, it should play a larger role in RUSA. Funding for RUSA can be increased by lowering the budgetary support provided to the established IITs and NITs. Use that money to handhold state universities instead.

What are the obstacles to this reform?

Backlash from faculty and staff at IITs and NITs. A cut in funding will entail large resistance from these institutions.

What else is needed?

We need to ensure that the funding needs of IITs and NITs are indeed met by other sources of financing.

We need to ensure that the increase in central funding will actually result in improvement of standards at the state universities. Funding is only one part of the solution.

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About the author

Nidhi Gupta

Nidhi Gupta is Head, Post-Graduate Programmes at the Takshashila Institution. She is a graduate of the London School of Economics and Political Science. Her research interests lie in behavioural economics and in origins of public opinion.