Vantage point

Thursday, June 30, 2005

Higher Education Subsidies

The World Bank proposal to tax IITians leaving the country is a convoluted round-about idea which unnecessarily complicates things.

The "bright" idea elaborated here (Link Via Amit Varma) says that since the government subsidizes the education of IITians, and these IITians leave the country, it is effectively subsidizing the foreign countries to which they migrate. So what the government should do, according to the World Bank, is take this subsidy back when the student leaves the country.

I have an easier idea.

Stop subsidising higher education!!!!

As i have written on my blog before, and also over here, when literally millions are starving, don't have potable water, don't have access to primary education and living in inhuman conditions, if at all any taxpayer money is to be spent on subsidies, it should be to solve these problems.

Stop funding higher education. Make the students pay for it. If they don't have the money, let them take loans. With a boom in the banking sector, getting loans is easy for IIT and IIM students. And believe me, repaying these loans is NOT difficult. The salaries we get are enough to pay for it.

But under the present scenario, we get subsidized engineering and management education, and we have good incomes. So what we are doing with that money is, spending it in swanky restaurants, on great clothes, cars, ipods. That extra income can be used to pay the educational loan.

Effectively, a poor girl in rural Bihar was denied a decent primary education so that me, or any other yuppie like me could buy a wide screen TV.

You call this pro-poor?

So instead of paying out a billion dollars in subsidy and getting it back, just go ahead and de-subsidize higher education, at least until every Indian has access to basic needs.

Supporters of subsidizing higher education often use examples to make emotional appeals. They will tell us about people like Manoj Rawal, who was denied an education in Stephen's because his father is too poor to pay the fees.

Tugs at your heart right? makes you want to support the subsidy?

Just remember that for every Manoj denied higher education, there are thousands, even millions denied food, water and primary education. If you had a limited amount of money, whom would you rather help?

Who tugs your heart harder?

P.S. - Of course, I am not supporting just taking money from IIT-IIM and blindly giving it to the government schools, water boards the PDS. The delivery mechanisms need an overhaul. For example, to ensure primary education for all, we need the coupon system which will make sure the government just pays for the education, and does not waste money running schools inefficiently. Similar such mechanisms can be devised to provide citizens with the basic necessities, with the government just paying for it, instead of actually being the agency that provides them.