Saturday, 18 April 2015

Subsidized education at IITs : Some thoughts

(Note: The article below was written before fees were hiked at IITs a few years ago. It presents an alternate model to address cost of education that I believe is better.

It is basically this: Extend subsidised education to those who need it but in return have them commit that they will work for the science and technology sector within the country for a certain number of years (say five years for full subsidy). This period can be deferred if the student wants to pursue higher studies.

I think both options can be made available: 1) Pay the full fees OR 2) Receive subsidized education in return for a commitment as per the paragraph above.

Note that since the article was written some years ago some of the figures involved may need to be revised.)


So here's a little back of the envelope calculation that might help spark off a debate that I believe is relevant.

Apparently the Government of India subsidizes undergraduate education at the IITs by about Rs. 2.5 Lakh per student per year. That's Rs. 10 Lakh per student for the four year program. There are 16 IITs right now. Plus a few more are opening up soon. If we assume that about 10,000 UG students are absorbed across all IITs put together every year, we are talking about a subsidy of about Rs. 1000 Crores per batch! If we extrapolate this to the next twenty batches of students, we are talking about a subsidy of about Rs. 20,000 Crores (and that's not accounting for interest etc.) in subsidy for just the under graduate program of just 20 institutes in a country of 1.2 billion with a severe poverty situation.

Some argue that the subsidies get paid back (perhaps several times over) when the beneficiaries of the same rake in their heaps of moolah and pay taxes. That's hardly a valid argument since the whole point of establishing institutes of technology is to create technological manpower that will take the country technologically forward. Else all this money could very well be invested in high return business enterprises directly in the first place!

In my view, this entire model needs to be scrapped. Subsidy at this level of education needs to be tied to a commitment to work for the science & technology sector within the country for a certain number of years. This period of commitment can perhaps be deferred if someone wants to study further and get a Masters / PhD / some post-doc experience. But eventually invoked be it must.

[Note: The above calculation does not account for the real estate locked aside for these institutes. At about 500 acres of land per IIT, we are talking about 10,000 acres for 20 of them. I'm no real estate expert but do know that that's some serious money right there.]

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