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Thursday, November 05, 2020

A financial model for higher education

 

Tuition fees, research grants, and endowment funds should contribute a third each to income


India’s gross enrollment ratio (GER) in higher education is 28%. It lags behind the global average of 38% and behind China’s 51%. If India wants to become a knowledge economy, our higher education institutions (HEIs) will have to play a leading role in boosting the innovation ecosystem while, at the same time, increasing GER to 50%. This calls for the scaling up of existing institutions as well as the creation of new premier ones. To put things in perspective, 23 Indian Institutes of Technology (IITs) will admit as many as 15,000 undergraduates this year, while just one state university in the United States (US), Arizona State University, admits 13,500 undergraduates each year.

While the scaling-up of existing institutions and the creation of new institutions require additional budgetary allocations, running them well calls for money on a recurring basis. As a percentage of Gross Domestic Product (GDP), the nation’s expenditure on higher education remains low. This lower investment per student also has a strong correlation with global rankings.

The new National Education Policy (NEP) is trying to address this issue by allocating a fixed percentage of GDP for higher education.

It also talks about granting administrative autonomy to higher education institutions. Currently, these institutions receive upwards of 80% of funds from the government. They must explore 21st-century financial models to secure financial and administrative autonomy.

What is needed is a structural overhaul and creation of a diversified financial model for our institutions. Indian Institutes of Management (IIMs) have been able to achieve autonomy by charging a higher tuition fee, contributing up to 85% of their funds. Is charging high fees the only viable financial model? It need not be if we follow the best practices of various countries and use a combination of these models.

Tuition fees contribute up to a quarter of the income for the most universities in the US, Australia and Asia. In the IITs, it contributes to only 6-7%, since only a fraction (approximately one-third) of students pay the upper limit of tuition fees. Others pay a much lower amount, based on their social category and economic status. This contribution can be increased not only by charging market competitive tuition fees, but also by bringing all students into the fee-paying category. This can be achieved by decoupling students and their families from the upfront financial barriers by offering them collateral-free and interest-free Income Contingency Loans (ICLs) through a centralised financial structure. Australia’s Higher Education Loan Program (HELP) is a widely-praised ICL model that is managed by the Australian taxation office. The repayments are linked to the debtor’s income level and are collected directly by the Australian tax authorities. ICLs are different from the education loans offered in the US that have caused massive student debt problems. A scheme can be piloted in India with IITs, which could also offer professional, executive and online programmes that do not require the infrastructure conventional degree programmes do.A third of the income could come from the research activities. Though research is primarily government-sponsored, universities such as UC Berkeley, Harvard and Ecole Polytechnique Federale de Lausanne raise up to a third of their research funds from non-government sources. Research at IITs is predominantly government-sponsored. A critical challenge has been managing and operating research facilities with insufficient overheads (ranging 5-10%) from these government grants. Alongside the expected increase in overheads, IITs could tap funds from the private sector, invest in and incubate research start-ups, and strengthen technology transfer and intellectual property licensing mechanisms. Mechanisms such as Foundation of Innovative Technology Transfer (FITT) at IIT Delhi and Society for Innovation and Entrepreneurship (SINE) at IIT Bombay may facilitate institutional equity investment in deep-tech start-ups. The recent launch of the world’s most affordable Covid-19 testing kit by IIT Delhi and the supply of over 4.5 million export-quality personal protective equipment by IIT Delhi start-ups are small demonstrations of the potential such investments by HEIs can generate. For boosting industry participation in research, IIT Madras has shown a way through the creation of technology parks. IIT Delhi is currently developing three technology parks for various industry sectors.

Harvard, Stanford and Massachusetts Institute of Technology (MIT) have pioneered the concept of endowments, now adopted by public universities across the world. Endowment investment returns can easily contribute up to a third of the university’s income. Endowments are raised not only from the alumni but also from industry, philanthropists and governments. Last year, IIT Delhi launched an endowment fund with a target of raising $1 billion, that will provide a conservative investment income of ₹700 crore every year. A successful endowment model will require the creation of fund-raising teams and investment policy changes to overcome bureaucratic hurdles.

The new financial model for HEIs will be fuelled by the income from, one, deferred tuition payments; two, research grants/equity investments in startups/technology transfer fees; and, three, endowment donations. The transition is imminent, and it is up to us whether to lead or follow.

 Ramgopal Rao is director, IIT-Delhi, and Anurag Sachan is executive, IIT-Delhi

Source: Hindustan Times, 3/11/20

In Bihar, is class transcending caste?

 

The issues are centred on poverty and suffering, of the need for local opportunities, and of the failures of the state to stand by its poor in their hour of need


For students of political change, the Bihar assembly elections are of great significance. The world’s poorest go to vote in the world’s largest democracy, in the first direct elections of this scale after the Covid-19 pandemic has engulfed the world. Under the formal veneer of campaigning, marked by political rallies and speeches, is a truly substantive and deep political deliberation in Bihar’s villages and towns, with labour primarily re-centering the electoral discourse towards aspects of life and livelihood in unanticipated ways. Labour and its desire for voice and visibility in Bihar signals a shift in the base, and indicates a reshaping of the political arena, following a long period of political continuity and bureaucratic-charismatic leadership in the name of development and welfare.

The change has been truly unanticipated and sudden for a polity hitherto characterised by the caste-based politics of agada-pichada (forward-backward), where Lalu Prasad’s Mandalisation engulfed even the sharpest tenors of Left politics rooted among agrarian labour; and where Chief Minister (CM) Nitish Kumar’s plank of good governance was firmly rooted in a social base of the ati-pichada — the extremely backward classes conglomerate referred to as a cluster of panch-phorana jatis. This contextual rootedness, Kumar’s background as being one among the Jayaprakash Narayan-Karpoori Thakur-inspired socialists, and his personal clean image was embedded in his governance model — it is this that is the central object of questioning in these state elections.

The pursuit of good governance earned Kumar the sobriquet of sushaasan babu and dominated the administrative directions of many states after liberalisation. But he was not alone.

Since the late 1990s, many CMs began to be seen as leading the agenda of vikas (development), and emerging as the chehra (face) associated with delivery of public services and welfare. Chandrababu Naidu was among the earliest such leaders. A favourite of the World Bank and global business, he was referred to as the CEO in the arena of democracy. In northern India — more rural and agrarian — Shivraj Singh Chauhan’s pro-women welfare schemes such as Laadli Lakshmi earned him the title of Mama.

It was Kumar, however, who transformed the landscape north of the Vindhyas in Bihar by merging Mandalised electoral politics with the provision of universal basic services — roads, law and order and schools in his first term, and electricity in his second. Pro-poor and clean management of floods in large areas of Purnea and Saharsa, bordering Nepal and honest efforts at flood-relief earned him the trust of the most vulnerable.

Both the extreme backwards and the Mahadalits put their trust in the Nitish Kumar-led political regime for close to two decades. But they are, today, at the forefront of the silent-but-deep questioning on the ground — this is particularly true of labour, which is seeking to find its voice after having had to flee urban centres during the lockdown.

During conversations in Saran district’s oldest nagar panchayat of Riwilganj, many stories emerged of the hardships faced by labourers as they struggled to return home, many from those who belong to social groups traditionally considered loyal to Nitish Kumar.

There is a high density of population in the region, and no source of local work, leading to palaayan, exodus/migration, said Bhagwan Ji Sharma, a badhai by caste. “We left our soch (thinking) based on jaat-paat and organised round-the-clock meal services for labourers walking back. There was one who was returning from Tamil Nadu who had walked hundreds of kilometres and taken rides on trucks. His feet were in tatters.”

But the resentment is not merely that labourers had to struggle, but that there was political apathy. “Nitishji did not speak up for us, even a Yogi Adityanath organised buses for travel of labour from Uttar Pradesh”, said Dhurinder Manjhi. Ranju, a young Sahni woman from Darbhanga district, was stuck with three children at a Delhi construction site, and barely survived the threats of the building contractor. A labour contractor from Barauni helped her survive and get back, not the administration. Back in her village, Ranju can only rely on her skills of makhana farming in water puddles owned by landlords — she does not own any land.

The refrain is similar in Begusarai. Labourers want to go back to the opportunities available in flourishing sites of neoliberal economic development. But trains are limited. The bus operators charge ₹3,000 for a road journey to Delhi. “At least Nitish Kumar could have helped labour go back by train. There is no fear of the coronavirus in holding election rallies, but when it comes to us, our freedom is curtailed,” argued a group of young men from the Kushwaha community who have studied in public universities in Patna.

In each field site, the discussions transcend caste identities, and even partisan affiliations. The issues are centred on poverty and suffering, of the need for local opportunities, and of the failures of the state to stand by its poor in their hour of need. Unfortunately, generating economic opportunities locally was just not a priority of the sushaasan agenda.

Manisha Priyam is associate professor, National University for Educational
Planning and Administration
The views expressed are personal

Source: Hindustan Times, 5/11/20

Tuesday, November 03, 2020

Quote of the Day November 3, 2020

 “When nobody around you seems to measure up, it's time to check your yardstick.”

‐ Bill Lemley

“आपके आसपास के लोगों में से कोई भी जब आपके मानदंडों पर खरा न उतरे तो मान लीजिए कि अपने मानदंडों को फिर से परख लेने का समय आ गया है।”

‐ बिल लेमली

India takes step closer towards mass production of hydrogen fuel from biomass: IISc Bengaluru

 

The IISc and the Research and Development Centre of Indian Oil Corporation Limited had signed a Memorandum of Understanding to develop and demonstrate biomass gasification-based hydrogen generation technology for producing fuel cell-grade hydrogen at an affordable price.


In a boost for the clean energy sector, the Indian Institute of Science (IISc), in collaboration with Indian Oil Corporation Limited, has developed a process to produce hydrogen fuel from biomass that doesn’t involve combustion.

The IISc and the Research and Development Centre of Indian Oil Corporation Limited had signed a Memorandum of Understanding to develop and demonstrate biomass gasification-based hydrogen generation technology for producing fuel cell-grade hydrogen at an affordable price.

Biomass gasification is a controlled process that involves heat, steam, and oxygen to convert biomass to hydrogen and other products without combustion. The technology developed by IISc first produces hydrogen-rich syngas (synthetic gas) from biomass and then separates hydrogen from the syngas.“The technology envisaged under this programme would not only provide a cleaner energy option for India but will also be a step towards addressing the challenge of biomass waste,” the institute mentioned in a statement.

According to the IISc, this is another step to bring hydrogen fuel into India’s mainstream energy matrix while utilising the agrarian strengths of the country.

“The developed technology will be scaled up and demonstrated at Indian Oil’s R&D Centre at Faridabad. Hydrogen generated from this demonstration plant will be used to power fuel cell buses as part of a bigger project being conceived by Indian Oil towards ushering in the country’s hydrogen economy,” an IISc spokesperson said.

Source: Indian Express, 2/11/20

Economic & Political Weekly: Table of Contents

 

Vol. 55, Issue No. 44, 31 Oct, 2020

Editorials

From the Editor's Desk

From 50 Years Ago

Strategic Affairs

Commentary

Book Reviews

Perspectives

Special Articles

Notes

Current Statistics

Letters

Appointments/Programmes/Announcements

US elections: Why the electoral college still has powers to choose President

 

Embedded within the institution, is the idea that state legislatures have the power to decide on who gets to elect the president of America.


The 21st century dawned upon the United States on a rather dramatic note with a historic presidential election. The electoral contest between Republican George W. Bush and Democrat Albert Arnold Gore Jr. is cited as one of the most significant elections in recent decades that laid bare the complications involved in prioritising the electoral college over popular sentiment. The victory of Bush was determined by a Supreme Court judgment that awarded all 25 electoral votes in Florida to him, despite losing the popular vote by a margin of 537. Neither was this the first time that such a situation had arisen, nor was it the last. In all of US history, on five occasions a presidential candidate has lost despite having won the popular vote, the most recent being the 2016 elections, when Democrat Hillary Clinton lost to Republican Donald Trump, despite having won the popular vote by a margin of nearly three million- the widest margin of victory ever by a losing candidate.

The electoral college in American presidential elections has been a matter of debate since the early days of the federal republic. Embedded within the institution, is the idea that state legislatures have the power to decide on who gets to elect the president of America. The system of the electoral college is designed to elect a temporary body of electors from each state, in numbers proportionate to the total number of representatives in the Congress, who in turn gets to vote for the president. Interestingly, how this body of electors are chosen from each state is also left on the individual states to decide.

“It’s a heritage of our constitution. Our constitution left matters of voting to the state. Our elections are run by the state, and so is the right to vote determined by the states,” says Alex Keyssar, historian and professor of History and Social Policy at Harvard University, in a conversation with indianexpress.com. He explains that the decentralised system of voting has been frequently discussed and debated but there has been resistance from the states to alter it. “The most recent substantial discussion occurred after the 2000 election when Bush won by a tiny margin in Florida, where not only was voting technology different from the rest of the country, but it also differed from one county to the other,” he says.

A legacy of the founding fathers

At the onset, the United States was formed by 13 British colonies that fought a revolutionary war against the British empire in the late 18th century. Consequently, the Americans began expanding westwards, bringing more states under the republic’s umbrella. Political scientist Alfred Stepan had famously compared the formation of the USA and India, as he classified the former as a ‘coming together’ federation, as opposed to the latter being a ‘holding together’ federation.

In other words, the coming together of the United States is largely dependent on the power that the constitution of the republic gives to the independent states. As the chief justice of the United States had famously declared in 1869, “the constitution, in all its provisions, looks to an indestructible union composed of indestructible states.”

As the Constitutional convention started out in May 1787 at Philadelphia, the delegates were quick to settle on the powers to be invested in the chief executive and by mid-August, had decided that he would hold the title ‘president’. The challenge, however, was to determine the way in which the president would be elected. Keyssar in his recent book, Why do we still have the electoral college? notes that one of the key difficulties being faced by the delegates was the fact that there was no historical precedent in the selection of a republican chief executive. “When the convention began, the most readily available option (the ‘default’ in twenty-first century argot) was selection by the legislature,” he writes. Yet the delegates at the convention kept going back and forth on their decision over the matter.

During the early debates, there was significant support for choosing the president through a popular vote. James Wilson was strongly in favour of the same, on the grounds that a popular vote would ensure that the branches of the government are independent of each other and also of the states. James Madison too was of the opinion that “the election must be made either by some existing authority under the national or state constitutions- or by some special authority derived from the people- or by the people themselves.”

The argument against a popular vote, on the other hand, was based upon the burning issue of slavery. Madison, for instance, argued that given the fact that voting rights were more diffusive in the northern states than in the south on account of a larger slave population there, the latter would have lesser influence in the choice of a president. “What limited the support for a single national election, thus was not antagonism to popular participation but an array of other apprehensions: that such an election would be too conducive to a national rather than a federal government; that it would be too impractical, and that it could threaten the balance of influence between free and slave, as well as small and large states,” writes Keyssar.The debate was settled only towards the end of the convention, by late August when a committee chaired by David Brearly of New Jersey proposed the idea of the ‘electoral college’ which entitled the state to a definite number of electors and gave it the power to decide how they should be chosen.

Accordingly, Article II, section I of the US constitution states:

“Each state shall appoint, in such manner as the Legislature thereof may direct, a number of electors, equal to the whole number of Senators and Representatives to which the State may be entitled in the Congress: but no Senator or Representative, or person holding an office of trust or profit under the United States, shall be appointed an elector.”

Challenges caused by the electoral college

The problems with the electoral college became evident from the time the constitution was written. “As early as the 1790s, political leaders began pointing to the flaws in their new constitution’s blueprint for selecting presidents, and by the 1820s even James Madison- the principal ‘father’ of the Constitution- was voicing support for significant reform,” writes Keyssar.

But the problem with the electoral college lies not much in its intent as in its functioning. Specialist in American national government, Thomas H. Neale in his research paper, The electoral college: How it works in contemporary presidential elections, notes: “notwithstanding the founders’ efforts, the electoral college system almost never functioned as they intended, but, as with so many constitutional provisions, the document prescribed only the system’s basic elements, leaving ample room for development. As the republic evolved, so did the electoral college system.”The foremost challenge caused by the fact that the constitution and the federal law is silent on nomination procedures for party candidates. So the process of electing an elector is left on state preferences. Thereby, voting technologies, voting rights and also the weightage given to popular votes have varied across states.

“In the early days of the republic, the legislatures themselves chose presidential electors in more than half the states, which meant that voters in those states had no direct involvement in the election,” writes Neale. However, this practise changed over time as democratic sentiment grew in the 19th century and since 1864 voters have chosen electors in all the states. However, given the constitutional provision for state legislatures to decide on electors, the ability of the states to exercise this power does exist, as was illustrated in the Bush vs Gore election of 2000. The state legislature had suggested stepping in if the local authorities were unable to decide on who won the 25 electoral votes.et another problematic feature of the system is that in every other state apart from Maine and Nebraska, the practice of ‘winner takes it all’ exists, leaving many voters with the feeling that their votes don’t count. This is particularly true for states where one political party is dominant.

Further, it also affects the way political campaigning is shaped. Jesse Wegman of the New York Times explains this in a recent editorial“Today, 48 states use winner-take-all. As a result, most are considered “safe,” that is, comfortably in hand for one party or the other. No amount of campaigning will change that. The only states that matter to either party are the “battleground” states — especially bigger ones like Florida and Pennsylvania, where a swing of a few thousand or even a few hundred votes can shift the entire pot of electors from one candidate to the other.”

Consequently, political campaigns focus on only those issues which are of importance in these states like fracking in Pennsylvania and prescription drug plans in Florida. Problems such as climate change in California and transportation problems in New York are conveniently ignored.

Yet another source of discontent with the electoral college is the issue of faithless electors, or those who vote for a different candidate other than the one they were pledged. This happened as recently as the election of 2016 when attempted to cast ballots for candidates other than those to whom they were pledged and seven succeeded.

There exists a sufficiently strong public opinion in America to alter the system of presidential elections. “In the late 1960s and 1970s, 65 to 80 percent of voters favoured amending the Constitution to replace the Electoral College with a national popular vote; during the first decade of the twenty-first century, the figure hovered just above 60 percent, including majorities of both Democrats and Republicans,” writes Keyssar. He notes that opinion polls have also shown that Americans are confused about what the Electoral college is and how it works.

However, after the 2016 elections, the Gallup poll reported a rise in support for the electoral college. “In the aftermath of this year’s election, the percentage of Republicans wanting to replace the Electoral College with the popular vote has fallen significantly,” explained the analytics company.The challenges posed by the electoral college is expected to reach a new height this year with a pandemic raging and the number of mailed-in ballots swelling to historic heights. “The jumble of election rules and deadlines by state, including in presidential battlegrounds like Pennsylvania and Wisconsin, all but ensure that the victor in a close race won’t be known on Nov. 3,” writes political reporter Shane Goldmacher, in an article in the New York Times, as he cautions the public and politicians to recalibrate expectations on when the 2020 elections might come to a definite conclusion.

Further reading:

Why do we still have the electoral college? by Alexander Keyssar

The electoral college: How it works in contemporary presidential elections by Thomas H. Neale

Let the people pick the president: The case for abolishing the electoral college by Jesse Wegman


Source: Indian Express, 2/11/20


Managing flood of foodgrains is the nation’s problem today

 

Every mandi yard must have silos, automatic cleaning and weighing machine (that issues electronic receipt) and an elevator to store the grain in the silo. state procurement agencies and even private players can be roped in.


The nation is sitting on a mountain of foodgrains. Huge sums have been spent on procurement and the carrying cost is humongous, too. Punjabi farmers were applauded when food scarcity in the country was banished under then Prime Minister Lal Bahadur Shastri’s slogan- Jai Jawan, Jai Kisan. Not famine, but a flood of foodgrains, is the nation’s problem today.

The farmers are apprehensive that the government may abdicate its responsibility of buying grains at the minimum support price (MSP). This apprehension stems from the fact that the Shanta Kumar Committee recommended in 2015 that the Food Corporation of India hand over the food procurement operations to the states, knowing fully well that the states did not have the funds to procure the grains.

It is suggested that stocks be pared down to the buffer stock norms in three ways: (a) releases under the open market sale scheme at a discount if needed; (b) exports – the Atal Bihari Vajpayee government had exported almost 8 million tonnes of foodgrains (out of which Punjab Markfed, where I was managing director then, had a share of 2.6 million tonnes), and (c) giving it away as food aid to conflict-ravaged countries such as Yemen, Burkina Faso, South Sudan, Nigeria and Congo (to earn international goodwill).

PROMOTE CULTIVATION OF FRUIT, VEGGIES

Sale and export can generate Rs 150,000 crore, besides saving of around Rs 20,000 crore on the annual carrying cost. The funds so raised should be used as “seed money” for setting up a price stabilisation fund, for other commodities, which carry an MSP. Prices of pulses, maize, oilseeds and cotton should be assured as per the MSP. Many farmers may then shift away from foodgrains and the recurring problem of overflowing buffer stocks will be solved. Second, we need to promote the cultivation of fruits and vegetables by promoting the establishment of cold chains linked to supermarkets, which should be allowed to sell them.

Third, our current imports of onions from Afghanistan shows that Punjab can be the hub for the sale of milk, eggs, chicken, buffalo meat, fruits and vegetables to the Middle Eastern Arab nations through Pakistan and Afghanistan by creating a land route through diplomacy. This will generate a business lobby in our neighbourhood, which can be a counterweight to the hawks in the region.

ADOPT US MODEL OF HANDLING AGRI PRODUCE

The price stabilisation fund should be used for oilseeds, pulse, maize and cotton, besides wheat and paddy and cash crops such as basmati and Durum wheat. These crops need not be procured physically. We can emulate the policy of the United States for handling agri produce - namely the non-recourse loan scheme.

In the US, the federal government announces support prices but the farmers are encouraged to store their foodgrains in silos at harvest. They are provided non-recourse loans by the commodity credit corporation. The amount of loan is equal to the quantity stored and multiplied by the support price.

The farmer is given three years to liquidate the stock. If the market price is higher than the support price, the farmer sells the grain and repays the loan with a nominal interest, keeping the profit. To prevent speculation, the loan can be recalled if the prices hit a trigger – 175% for grains and 140 % for corn. If the prices do not touch the support price, the farmer can default on the loan and surrender the grain. There is no other penalty. That is why it is called a non-recourse loan. The policy has worked well since 1933, when it was initiated for cotton and corn.

The policy can be implemented in India by using the electronic negotiable warehousing receipt system, which late Ram Vilas Paswan had inaugurated in 2017. All farmers (including small and marginal ones) can store their crops at harvest and get a tradable receipt. On storage Nabard/ RBI should provide the farmer a loan.

MAKE PROCUREMENT PROCESS MECHANISED

To make the scheme transparent, the procurement operation must be mechanised. Every mandi yard should have silos, automatic cleaning and weighing machine (which issues an electronic receipt) and an elevator to store the grain in the silo. The scheme can include state procurement agencies and even private players. Across the country, 980 warehouses have been registered with the Warehousing Development and Regulatory Authority, while there are 64,000 warehouses storing 20,000 tonnes of commodities. Four registered warehouses operate in Punjab. In a regulated warehousing system, the regulatory authority could be government, as is the case in the US and Tanzania, or private as in South Africa.

Implementing the system would be a painstaking and slow task and an overlapping five-year term should be given for it. During this period, the MSP regime must continue and the same should be written into law.

If the farmers manage to secure an MSP on all 23 crops for which it is announced by the Centre and if the farmers or groups of farmers can use the electronically generated warehouse receipt to catch the off season high prices, the goal of doubling farm incomes by 2022 would be achieved.

The only issue that remains to be addressed is the loss of mandi fee and rural development cess. The Union government should compensate the state for five years or so, after which the taxes on food processing and buoyant agriculture subsidiary activities would help balance the budgets. dhanbirbains@gmail.com

The author, a retired Punjab-cadre IAS officer, earned a Master’s degree from Harvard University, specialising in agri-business

Source: Hindustan Times, 3/11/20