1. Introduction
When there was no university elsewhere in the Europe; Takshasila, Vikramshila, Pallavi, and Nalanda were the centers of Global Education and attracting learners from all around the globe. The development of modern education in India started with the establishment of Hindu College in Calcutta in 1817. During British reign, Calcutta University was the first to confer the bachelor degree on women in 1883.
After independence various universities have been opened both by the government as well as private sector. The main motive behind opening these universities were not to earn profit but to serve the society by imparting higher education and conducting researches related to pure and social sciences. The fees charged from the students were minimum, hence these institutions were generating deficit so there was a need to go for the donations and aids to cover its fixed and running expenses. But gradually there was a drastic change in the scene .The education sector emerges as one of the most profitable business opportunity. The increase in the number of private schools and institutions supports the fact. Higher education is not an exception to this. Gradually most of the corporate entities have also entered into the picture.
2. Corporatisation of Higher Education
Now a days education sector is a trillion dollar industry. It is a service sector industry in the area of education as service with a huge global market in which students, teachers and non- teaching employee constitute resources for profit generation. So the concepts of marketing are also applicable. The organizations have to market their product and themselves in order to survive. In this industry the students are the customers, the teachers are the service providers and the institutions are organizers or marketers and teaching-learning process is no longer for the building of a nation but a business for profit making. Education at all levels, will continue to grow, because it cultivates the human mind and makes people important and useful in the all round development of a country, however for the corporate sector it will grow as a big service industry. Predatory and powerful MNCs are targeting public education, particularly higher education, for profit- making. Though predominantly a government supported service most governments are as consequences of neo-liberal economic reforms, withdrawing from it. The government of India through extensive privatization, commercialization and deregulation is encouraging this process.
3. Education under GATS umbrella
In 1996, the United States provided exports of education and training services had reached 8.2 billion dollars, and its trade surplus in education amounted to 7 billion dollars. Higher education was the fifth largest service exported by the US. Therefore, the pressure of the United States on WTO member countries in relation to trade in education service is clearly understandable.
The US, the European Union (EU), Japan and Canada are the main powers behind the GATS. Though WTO membership consists of nation states, the transnational corporations of these countries that sit on all the important “advisory” committees and determine detailed policy shape its agenda. While denying access to decent healthcare, education housing and long term care to millions of workers and their families the world over, the agreement will confer ever greater political power on these corporations as they control and dictate public policy.
GATS have two components: (i) the framework agreement containing 29 articles, and (ii) a number of Annexes, Ministerial decisions etc. as well as the schedules of commitments by each member government, which bind them to allow market access, and /or remove existing restrictions to market access. This agreement covers all services, including education
When the services are entirely provided by the government, they do not fall within the GATS rule. For a service to be out of the purview of the GATS rule it has to be entirely free. However, when the service have been provided either by the government partially or some prices are charged (as happens in education where some fees is charged) , or provided by the private providers , they shall fall under the GATS rule.
The informal WTO classification List (W/120) divides educational services into five parts: (a) Primary education (b) secondary education (c) higher education (d) adult education (e) other education.
The idea behind this is the creation of an open, global marketplace where services like education can be traded to the highest bidder. GATS cover the educational services of all the countries whose educational system are not exclusively provided by the public sector, or those educational systems that have commercial purposes. In India, we cannot get exemption in education from the application of GATS because education at all levels, particularly at higher education level is not entirely free (i.e. some fees has to be paid)
Corporate because of their huge financial resources are able to attract the best talent available in the country and hence they are providing the quality service to their customers (students). They have the access to the new sources of finances .In India also the issuing of shares by the schools and educational institution and its trading in the stock exchange will be a reality. Then the quality of the institute may be judged by looking at the share prices in the stock market and like any other business enterprises the wealth maximization will be the main goal of the institute and their entire effort will be to increase their market share and ultimately to increase the market capitalization. The government is reducing the grants given to the universities and colleges and these institutes are asked to arrange their own sources of finance .In that scenario those educational institution who will not be earning surplus will die like any other seek industrial unit. So it is the high time for those institutes to think for earning surplus and make themselves competitive for survival.
But when these institutions will be running on absolutely business principles for earning profit obviously the fees charged from the students will be higher. The application of some unethical and unfair practices for attracting the students and earning higher profit cannot be overlooked in that scenario.
4. Indian reality
In a country like India where a large section of our population is living below the poverty line, almost 35% of the population is still illiterate and we are talking about removing poverty and illiteracy, in that situation they will be the most mistreated people. So it is the government and its institutions, which will have to look at this aspect. Hence imparting higher education by charging high fees by the government run universities and college will not be desirable and the government has to look at the welfare aspect of its people. But before coming to any conclusion we have to consider the following two ground and hard realities in this respect: -
1. India being the member country of WTO, must abide by the decisions and regulations of WTO. So it cannot stop the foreign universities and institutes to operate in India, which are having ample financial, physical and intellectual resources and are running on absolutely business principles for earning profit.
2. The government of India is reducing the grants and aids given to the government universities and colleges and these institutes are called to mobilize resources from their internal sources as well as external sources. They are also asked by the UGC and NAAC to become more competitive.
So it is the time as well as the opportunity for our Government funded institutions/universities/colleges to make themselves competitive and to go for globalization. This can be only possible when they will stand on their own feet by earning surplus and are effectively and efficiently run. But at the same time we have to think for the weaker sections of the society who could not afford a high expenditure on the study.
Therefore it is very high time for educational institutes to build a business model, which will be able to compete with the foreign universities and also the weaker sections of the society will also be taken care of.
5. The model of Arvindo Eye Hospital, Madurai
The Arvindo Eye Hospital of Madurai has set an outstanding business model showing how an organisation can serve the society at large on one hand and can also earn profitable surplus on the other hand. At Arvindo Eye Hospital, economically poor people are provided treatment at free of cost and the patients who can afford are charged the requisite treatment charges. More than two-third of the patients treated in the hospital fall under the former economically unprivileged category and yet he hospital earns substantial profits. But a remarkable policy to be noticed is that the service provided to both categories of rich and poor patients are exactly same and no compromise of any sort is done with regard to the quality of treatment and service provided. The secret behind the success of the hospital is the volume of patients giving business and fact that hospital does not spend money on conspicuous consumptions. Promotion is through word of mouth and mass print media.
Similar model can be adopted by our government run and universities, whereby the required fees can be charged from students whose parents can afford the same, and concessions to be provided to the economically deprived students. With the globalization, liberation, privatization and economic growth more and more people are finding occupations in private sector leading to an increase in the purchasing power at the hands of the middle and upper class of the society who has become conscious of and can afford quality education at higher prices. This is a positive factor which the universities can cash upon and which further supports the above model.
Notes and References
1. http://www.bc.edu/bc_org/avp/soe/cihe/newsletter/news23/text001.htm
2. Www.education. nic.in/htmlweb/iperposch.htm
3. Www.pd.cpim.org/2002/feb17/02172002_wto_educ_2.htm_2000
4. A Case study on Arbind Eye Hospital, Madurai, IIMB Review, September,2005.
5. Kumar R; World Trade Organisation, Structure, Functions, Tasks, Challenges, Deep and Deep Publications, 2004.
Lecturer,
Department of Business Administration,
School of Management Studies,
Assam University,
Silchar, Assam, India
