A Bachelor's Degree in Engineering on demand?
Kannan M. Moudgalya, Chemical Engineering
It is known that in the knowledge business of Information Technology and Bioinformatics, India has a great potential. Another opportunity of equal potential, if not a greater one, which does not seem to be adequately appreciated, is the business of providing engineering education at the Bachelor's level.
First of all, let us look at the demand scenario. All India Council of Technical Education (AICTE) pegs the demand for engineering education to be 500,000 seats per year. This year, 189,000 students wrote the Joint Entrance Examination (JEE) to get admission into about 3,000 seats of IITs with the remaining 186,000 forced to seek admission in engineering colleges.
At present there is no guarantee of access to good engineering education. The current generation spends a substantial amount of money on tutorial colleges attempting to get admission into prestigious institutions like IITs and attempting to graduate from ill-equipped colleges in which they are destined to enroll.
A typical enrollment per college is 250 students per year or 1,000 for four years. Considering the costs involved in providing a good engineering education, a tuition of Rs. 50,000 per year per student is reasonable. The tuition collected from all the 1,000 students is Rs. 50 million per year. To meet the student to faculty ratio of 16 to one, 60 teachers are required. For a typical programme of 45 theory and 15 lab courses in 4 years, the average load per teacher is 3 courses and 1 lab per year. These figures are in agreement with the AICTE norms. If the average salary of the teacher is Rs. 25,000 per month, then the teacher's salary component works out to 25,000 x 12 x 60 = Rs. 18 million. It should cost an average of Rs. 100 million to establish such a college. At a rate of Rs. 16.5 million per year (at 13% interest rate), it will take 12 years to pay back the entire principal. The college will have a balance of Rs. 15.5 million per year, which is sufficient to meet all other expenses.
One can come up with innovative ways to help reduce the tuition burden of the needy students: The Government subsidy for engineering education can be in the form of scholarships to deserving students. For example, the Government may reimburse full tuition to, say, 5% of the students, depending on their performance. In return, these students may be asked to serve the armed forces/ISRO/DAE/DRDO/CSIR and other Government labs for a specified amount of time. The banks, many of which are looking for investment avenues, may also agree to give loans to a large number of students. Private and public sector companies may also set up scholarships.
Deregulation implies that the market forces determine what salaries to offer and what tuition fees to charge. This could, among other things, depend on factors, such as, the quality of the teacher, and reputation and location of the college. Naturally, there should not be any limit on the number of new colleges that can come up. The bitter pill of contract appointment for teachers can be sweetened by high salaries, as is the case in the industry.
With the self-corrective mechanism built in, the average quality of engineering education will go up dramatically. As the quality goes up, the export market will also open up. Students from all developing countries as well as poor students from developed countries will find the option of getting good education at US$ 1,000 per year an attractive one. It is safe to assume that there is a potential of 100,000 overseas students enrolling in our colleges every year even if they have to pay slightly larger (say 20-30% more) tuition.
The next question is where do we get good teachers for all the colleges even if high salaries are offered. The answer is that IITs, IISc and a few other institutions that are already essentially postgraduate institutions, can be restructured to produce postgraduates exclusively.
Another question is what do we do with all the graduates: do we have a capacity to absorb them? A possible breakup of where all these graduates may go is given in the accompanying pie chart. Note that 500,000 is only 2-3% of the about 20 million Indians who reach the age of 16 every year.
The total potential of this sector is 500,000 x 4 x 50,000 = Rs. 1,000 billion, the deregulation of which should result in an explosive growth of ancillary industries: hospitality, lab products, publishing and tourism, to name a few. The monetary value of these can be considered to be another Rs. 1,000 billion.
I cannot help comparing the two wheeler industry before and after deregulation. Recall that in early seventies it required a waiting period of several years to get a scooter for US$ 1,000. On the other hand, now, for about US$ 800 to 1,000, one can get a much superior model of one's choice on demand. Note that in all industries, and especially in those with a large customer base, deregulation helps the customers. Engineering education is no exception.
Deregulation of and the consequent improvement in this sector will remove the trauma that our college students go through. More importantly, it can catapult India into the league of advanced nations as today, more than ever, knowledge is power and education is a way to achieve it.
The views expressed in this article are those of the author only and not necessarily of IIT Bombay.