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Q. IIT fee hike: what are the rationales behind fees hike?
Apr 12, 2016 Related to : GS Paper-3

Ans :

Introduction-

Recently the human development ministry (HRD) has proposed a new hiked fee structure, which is applicable from next academic session. According to new fee structure the fee for general category has been raised to Rs 2 lakh per year, while the fees SC/ ST students, the disabled and those from economically weaker sections (whose annual family income is less than 1 lakh) has been completely waived off. Those from families with annual income of less than 5 lakh also have some concessions. Besides, they can apply for scholarships and student loans.

Rationale behind fee hike-

  • Budget-2016 proposed a new funding pattern for publically funded institutions. It proposed to setting up a Higher Education Financing Agency, a quasi sovereign body which will tap bond markets and then lend the proceeds to these institutions. The plan was that while the operational expenditure of these educational institutions would be met with the help of their internal resources, their capital expenditure would be met through borrowings to be made by the proposed agency.
  • Similarly, some of the country's top management institutes have also made a steep increase in the fees of their flagship programmes. It was inevitable for keeping pace with inflation.

  • It is  again is a desirable step as large subsidisation of students who pass out from these top institutes isn't required -- and, in any case, there are adequate fee waivers for students with economically challenged backgrounds and complete waivers for SC/ST students.

  • The relentless subsidies on higher education have affected school education, especially at the primary level. A rationalisation of the enormous subsidies at the higher education would create budgetary surpluses which can be channelled into school education.

Conclusion-

In the process of phasing out of subsidies, exclusion on the basis of ability to pay is a reasonably best way to practice. The rationalisation of fees would not affect the prospects of students who make the grade academically but may require financial assistance. Hence recent hike of IIT fees is one of the right steps towards rationalisation of subsidies in education.


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