Policy Orientation for Private Sector Investment

The policy perspective in the matter of funding is undergoing a steady transformation aimed at according an increasing role to the private sector. The emphasis in this respect is varied between the different stages of education. It is pointed out that the positive or the beneficial impact of education is not restricted to the individual but spills over to the entire community and the society at large. For this reason, education is generally regarded as a public good and policies of even developed countries favour keeping the sector under the public domain.

However, in the changing circumstances of fiscal constraints owing to adoption of economic reforms, there is a move to keep only the elementary education under the public sector’s (i.e. solely the government’s) domain and progressively increase the role of the private sector’s involvement in meeting the funding needs of the secondary sector and beyond.

The higher education sector, in particular, was proposed to be treated as a non-merit good in which phased increases in cost-recovery (to bring it to a level of 50 per cent of the cost) was proposed to be levied. By this measure, the burden of financing higher education was to be shifted gradually to the private corporate sector and the private individuals of the household sector. This policy initiative was a sequel to the choice of such policy courses expressed by national policy documents/bodies on education [e.g. the national policy on education (NPE; 1986, 1992) and the UGC] with the objective of reducing the role of the government in the higher education sector.