Citizens' Issues
How the Andhra govt. killed the education system–2: Free ‘scholarship’
After success at the junior college and the primary education level, the government should have freed the engineering education. But in 2008, the Congress government introduced a free scheme, which turned out to be a disaster. This is concluding part of a two part series 
After experiencing relative success at the junior college and the primary education level, the next logical step should have been to free the engineering education from government control and let the competition prevail. Or at least not ruin it by further intervening. But what followed was a disaster. A perfect case-study for market distortion. 
In 2008, the congress government under YS Rajasekhara Reddy (YSR), introduced a Fee reimbursement scheme for engineering students, which many say brought him back to the power in 2009 elections. Fee reimbursement scheme, in other words, was government-sponsored scholarships to buy votes. Since government was paying the fee, everyone started enrolling into engineering courses whether they were worthy of it or not. Because of this inflated demand, new colleges started cropping up just to encash this phenomenon without any real intention to provide education. Since there was a cap on the fees colleges can charge, existing colleges had no incentive to improve the quality. Even as the standards started to fall more and more engineers were coming out. This is what is reflecting in the Pearson’s survey. The bubble had to burst at some point, and it did. People started finding it difficult to get jobs for the poor quality of education. "Engineering degree would get you an IT job" had started slowly fading away. The demand came crashing down. Lakhs of seats were left vacant and colleges started shutting down.

Learning the wrong lesson

But the problem here is, people learn the wrong lesson. They think, increase in number of engineering colleges or lack of infrastructure is the problem. Hence, they call for more regulation in allotting the engineering colleges. The issue here is Government's intervention and distortion. Otherwise, abundance is something we must celebrate. Competition will take care of improving infrastructure and teaching standards. During Naidu’s regime too, number of colleges increased, but there was a genuine demand due to the industry coming in. Here in the YSR’s case the colleges started coming up to encash the government scholarships. One can compare it with another scenario. 
In early 2000s, with the services industry started coming in, there was a huge demand for "English medium" education even at the lower end of financial spectrum. As this report suggests, AP recorded 100% increase in English medium schools during 2003-06. Highest in the country. But this was a market driven phenomenon, hence we did not hear of schools shutting down until the Government passed a draconian law named "Right to Education" in 2010. A clause in the law, demands a certain minimum standards of physical infrastructure (number of classrooms, a playground, a library, etc.). As per one report, if strictly applied, 95% of schools in the country will not comply with these standards. And the above mentioned schools from the James Tooley's research, which have been educating the poor are now shutting down.

Where the government is absent

But interestingly, there is one area of education that escaped government's eye and is doing very well. Private tuition/coaching centres. They need no licences ...need not spend on any unnecessary infrastructure, they are at liberty to charge whatever they want... As a result, they can give more attention to the student to achieve better results. Unlike schools and colleges, there are no entry barriers here. Anybody can start a coaching/tuition centres. Once they gain some reputation and earn some money, they can use it to get licenses for schools and colleges. It is evident as one of the biggest educational institutes in AP, Narayana Group of Institutes, started as a coaching centre. I personally studied in a school which started as a tuition centre. From coaching 4-5 students for the 10th standard maths in a small verandah, it has emerged into a group of institutions and has now become the most popular brand in that area. 
However, what is the popular notion that imposing norms will improve standards. Far from it. When you impose infrastructural standards, you are denying those people with genuine talent and interest, but financially lacking to meet those standards. But then the Government is set out to destroy even this sector. Enter RTE. Each and every word of the act is destructive. Lot of articles have been written criticising it. But there is a clause that is relevant to the discussion, which did not get the attention it deserved. Clause 28: No teacher shall engage himself or herself in private tuition or private teaching. This is for any schoolteacher, private or public. This is a cruel violation of human rights. A punishment for taking up teaching profession. A move, if strictly implemented, will destroy tuition centres…and all the good that has been discussed above. This is what happens when government plans things.
And then, there are these software institutes, which are proving to be the lifelines of engineering education today. Since they are not confined to any particular curriculum, they can design their own courses. As a result, they are able to bridge the gap between the sluggish education system and the dynamic needs of the industry. There is a place called Ameerpet in Hyderabad, where the bulk of these institutes are located. Here is where the actual engineers are made. Even the industry has direct tie ups with some of these institutes and send their employees to get coached here. This report estimates that one-lakh students every year take advantage of institutes in Ameerpet alone. Clearly, sans regulation, this area has been able to inject the much needed sense of purpose to an otherwise lacklustre system.
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(The author can be reached at



Meenal Mamdani

1 year ago

The author's assertion that AP govt sponsored scholarships to engineering colleges as an election gimmick may be true but it was the lack of regulation and oversight that led to the proliferation of substandard colleges.
As for Right To Education, the biggest complaint of private schools has to do with the requirement that the schools must accept at least 20% students from economically weaker sections of society. The rest of the requirements such as library, playground, etc are not set in stone and hardly any schools are closed down for lack of such facilities.
Moreover, none of these problems are peculiar to Andhra Pradesh. They exist all over India.

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Nifty, Sensex to hit a resistance soon – Monday closing report
If Nifty stays above 7,930, the upmove may continue
We had mentioned in Friday’s closing report that Nifty, Sensex may give up some gains and Nifty has to stay above 7,930 for the gains to continue. Weak global cues dented investor sentiments at the opening and Nifty fell to 7,908 in the opening half hour but the market staged a strong recovery when the US futures moved from negative to positive and European markets opened in the green.
Healthy foreign funds inflows, announcements on financial sector reforms and hopes of a rate cut arrested the slide in a barometer index which closed flat on the back of weak global cues on Monday.
The S&P BSE Sensex, which opened at 26,107.98 points, closed at 26,192.98 points -- down 25.93 points or 0.10% from the previous day's close at 26,218.91 points.
The Sensex touched a high of 26,233.46 points and a low of 25,972.54 points in the intra-day trade.
Among the Asian markets, Japan's Nikkei dropped by 1.96%, Hong Kong's Hang Seng fell by 0.75%. However, Shanghai Composite Index closed higher by 1.91%. 
Other market watchers elaborated that the global growth concerns coupled with fears of a possible US interest rate hike in the latter part of 2015 played negatively on investors’ sentiments. 
The FIIs were net buyers in the cash market segment on Monday. They bought shares worth Rs154.87 crore. 
The domestic institutional investors (DIIs) were also net buyers. They bought shares worth Rs415.09 crore in the capital markets segment.
The rupee also ended the day's trade on a flat note. It closed at Rs65.72 to a US dollar, up 5 paise from its previous close of Rs65.67 to a greenback.
Sector-wise, banking, capital goods and automobile managed to stay afloat. However, fast moving consumer goods (FMCG), oil and gas and consumer durables stocks declined. 
The S&P BSE banking index rose by 160.26 points, capital goods index rose by 78.24 points and automobile index increased by 29.76 points.
The S&P BSE FMCG index receded by 57.52 points, oil and gas index declined by 24.01 points and consumer durables index was lower by 19 points.
Major Sensex gainers during Monday's trade were: Hindalco Industries, up 2.43% at Rs78; Axis Bank, up 2.05% at Rs527.90; Maruti Suzuki, up 2.00% at Rs4,491.85; State Bank of India (SBI), up 1.16% at Rs245.15; and Gail, up 0.99% at Rs290.50.
The major Sensex losers were: Reliance Industries, down 1.94% at Rs877.70; Mahindra and Mahindra, down 1.43% at Rs1,184.40; ITC, down 1.32% at Rs314.30; Dr Reddy's Lab, down 1.11% at Rs3,957.35; and Bharti Airtel, down 1.00% at Rs352.60.
The top gainers and top losers of major indices in the Indian stock market are given in the table below:
The closing values of major Asian indices are given in the table below:
Among European indices, DAX was at 9,927.10, up 0.1% and FTSE 100 was at 6,159.39, up 0.90%.


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