All Higher Education In India Should Be Privatized - Online Article

“If India wakes up to the world situation and readjusts her educational institutions, I have no doubt that the Universities will have a great and noble part to play in regard to the future of civilisation.”          - Shri. Alladi Krishnaswami Aiyyar, in 1929. 


A spectre haunts the Indian higher educational system, the spectre of privatisation. The government’s share in overall education expenditure in 1983, which was 80 percent, has gone down drastically to 67 percent in 1999. At the same time, private expenditure on education has increased by about 11 times in the last 15 years. In the case of engineering colleges, the private sector, which accounted for just 15 percent of the seats in 1960, now accounts for 86.4 percent of seats. In the case of medical colleges, the private sector dominance has risen from 6.8 percent in 1960 to 40.9 percent in 2003.2 Statistics reveal that in 2000-01, around 42% of the 13,072 colleges in India were privately owned and managed. This sizeable chunk educated nearly 37% of the students who had enrolled into higher education.3 Moreover, the protracted and fiercely contested battle in the last five years, over seat-sharing and fee structure in these institutions, shows that privatisation of higher education has become an issue of national importance. However, it is mainly after Indian policy-makers, without much choice in this regard one should say, cast the dice in favour of privatisation in the 1990s that the higher education sector has witnessed this massive rise in the number of private players.

In fact, the 1950s had witnessed the exercise of a completely different choice by a new nation born at the stroke of the midnight hour. Realising how institutions imparting higher education, especially professional education, played an integral role in national development, India tried to introduce elements of Nehruvian socialism into the State-engineered educational sector. This decision gave India the few islands of excellence it can boast of, such as the IITs and the IIMs, and very many mismanaged public/Government colleges caught in the deep-rooted malaise of bureaucratic inefficiency and outdated syllabi. However, with the burgeoning rise in population figures, it was clear that the State would not be able to do justice to this aspect of nation-building all by itself. This coupled with the neo-liberalist reforms since 1990, has generated considerable confusion over the last 15 years.4 Today, at this crucial juncture, India is left with no choice but a thorough revamp of her higher educational system.

Presently, higher education is imparted in India by more than 15,0005 colleges. On the flip side, a mere 8-9 percent of the relevant age-group between 20 and 24 years is presently enrolled in these institutions, as against 50-85 percent of this age-group of the population availing of the benefits of higher education in developed countries. Again, while there were a mere 32 universities conferring degrees upon the college-going Indian youth of the 1950s, today the number exceeds 300. Despite this, several concerns about the quality of, and access to, India’s higher educational system are being expressed on a scale much larger than ever before. In short, higher education in India is a bundle of contradictions.

In this context, the marked shift towards privatisation in higher education can be analysed using different perspectives. There is certainly scope for an entire debate on the desirability and merits of privatisation and capitalism over socialism and State-sponsored higher education. Such a debate would probably derive most of its theoretical perspective from the discipline of economics. It is also possible to look at privatisation of higher education in India from a sociological and cultural perspective, focusing on the bias inherent in private education and how this bias works against certain underprivileged sections of the society. Accepting that all of these are equally important vantage points from which the whole issue of privatisation of higher education can be examined, this paper focuses on using the Indian Constitution, a guiding document dedicated to India and her people by her founding fathers, as a prism through which the contentious issue of privatisation in higher education may be examined.

The Indian Constitution, like any other guiding document, certainly envisages the attainment of certain goals, these being collectively referred to in this paper as the constitutional vision. At the same time, it is less certain whether the Constitution prescribes any doctrinaire means for the fulfilment of this vision. Ultimately, whether it is higher education or land reforms, the economic and social ideologies perpetrated and implemented by the power-holders in each epoch of India’s national evolution have probably kept changing according to political necessities. The constitutional vision, however, has always been the attainment of the noble goals enshrined in the preamble, the Directive Principles of State Policy, and several other constitutional provisions.

Thus, when we look at privatisation of higher education from the perspective of this constitutional vision, it is clear that there are two materially different issues to be addressed. The first issue is that of permissibility. Is privatisation of higher education constitutionally permissible in the first place? If the answer to this is in the affirmative, the next aspect of permissibility pertains to the extent of privatisation as well as the restrictions on privatisation. This issue of constitutional permissibility in the arena of privatisation of higher education has been dealt with extensively by the Hon’ble Supreme Court of India as well. Therefore, a discussion of this issue also involves an analytical examination of the important judicial pronouncements that deal with private educational institutions. The second issue, being one less discussed by judges and less considered by policy-makers, is that of desirability. Here, the structuring of private higher education so as to attain this constitutional vision in the most desirable way is of primordial importance. This certainly involves a grasp of intricate policy choices pertaining to standards of education and autonomy in the management of private institutions. The unavoidable foray into the realm of policy when examining questions that have a bearing on the issue of desirability, has probably contributed to the judicial silence on this issue. For the same reason, this issue has not been addressed in great detail in this paper as well.

To fulfil my objective of discussing these issues, I have structured this paper into two parts, with each part being further divided into various sections. The first part discusses the issue of permissibility, and this certainly occupies larger attention in this paper. Firstly, I have sought to point out some of the essential goals enshrined in the Indian Constitution. While doing so, I have also delved into the question of whether the Constitution specifies any route for the attainment of these goals, for if it does, then the whole privatisation model could theoretically speaking be inconsistent with the Constitution. Using this as a vantage point, it is next sought to examine the constitutionally guaranteed rights of private players and the restrictions permissible on these rights. Here, emphasis has been placed on analysing judicial and legislative approaches, and thereby demarcating the scope and extent of constitutionally permissible privatisation of higher education in India. From here, the second part of this paper goes on to examine the issue of desirability. This stems from the fact that higher education plays a prominent role in fulfilling the constitutional vision. Keeping in mind the constitutionally permissible restrictions on private higher educational institutions, and the challenges imposed on higher education per se by the constitutional vision, I have sought to examine how best this vision can be realised. While doing so, I have also attempted to interpret the permissible in a manner most consistent with the desirable.

Privention of Higher Education: The Permissible

The Indian Constitution as a Guiding Document

The Preamble to the Indian Constitution constitutes its spirit and backbone9, and therefore no better way to begin than from the very beginning. The Preamble promises a commitment by the people of India to secure to all Indian citizens the laudable objectives of liberty, justice, equality and fraternity. Though on a primary reading, this may look like an exercise in rhetoric, on deeper examination, a sense of purpose and direction is evident from the Preamble and its wording. Social, economic and political justice are arranged in that very order with a clear purpose: Economic justice is a hollow promise without the attainment of social justice, and only the joint assurance to an individual, of both these kinds of justice, can result in guaranteeing political justice. Similarly, the unity and integrity of the nation can be secured only through the guarantee of individual dignity. Without equality of status, equality of opportunity is an unattainable goal.10 This insightful vision enshrined in the Preamble must have influenced Chandrachud, C.J., in Minerva Mills v. Union of India11, to express the view that “the edifice of our Constitution has been built upon the concepts crystallised in the Preamble.”

Thus, it is evident that the ideals of social and economic justice, and equality of opportunity, form an integral part of the constitutional vision. This is further confirmed by the guarantee of equality as a fundamental right under Article 14 of the Constitution, and the desirable guidelines for policy-making as expressed through the Directive Principles of State Policy. Most importantly, the Preamble was amended by the 42nd Constitutional Amendment to specifically proclaim adherence to the socialist principle. The idea of socialism is therefore an integral part of the constitutional vision.

The Road to this Vision

Having submitted that social and economic justice constitutes an integral part of the Indian constitutional vision, I now seek to examine whether the very idea of privatisation of higher education is inconsistent with this vision. Here, one has to give due regard to the express commitment to socialism as enshrined in the Preamble, and the nationalisation model of economic development that was long considered as a manifestation of this socialist vision. As rightly observed by Gajendragadkar C.J., in Akadasi Padhan v. State of Orissa, while the rationalist would take a pragmatic approach and implement the nationalisation model only when it was certain to assure higher economic efficiency and returns, the socialist would adopt a doctrinaire approach and justify nationalisation or State ownership as a matter of principle and root its justification in the general notion of social welfare. Socialism certainly places importance on State-engineered measures for securing social and economic justice. The judiciary in India has also endorsed the doctrinaire approach as is evident from various decisions that resort to the principle of socialism while upholding nationalisation schemes. At the same time, it is submitted that socialism can only be a justificatory principle in the Indian context. Ultimately, the Indian Constitution is an organic document, flexible enough to be interpreted according to the changing times, and the necessary corollary to this is that socialism as enshrined in the Preamble cannot be used to impugn other models of development, especially more economically efficient ones. If a contrary view is taken, the Indian Constitution would no longer qualify as an organic document.

The expression ‘socialist’ has not been defined in the Indian Constitution and therefore, can derive its content only from specific constitutional provisions and related judicial philosophy. As far as the constitutional provisions go, none of them stipulate any ideologically coloured means for attainment of the constitutional goals. Concepts such as social justice are not fixed but ever changing in nature, depending on the time, place, and needs of society. Even at the time of drafting of the Constitution, the idea was only to create a democratic constitution with a socialist bias so as to facilitate India in becoming as socialist as desired by its citizens or as dictated by its needs.16 Judicial philosophy in the post-liberalisation era has also affirmed this constitutional reality. In Delhi Science Forum v. Union of India, it was contended that the telecommunications industry being integral to the security and welfare of India should have been monopolised by the State, and not privatised at all. The Supreme Court rejected this contention while explicitly recognising that the Indian Parliament had adopted a national policy of liberalisation and privatisation. The Court opined that it was not its function to pronounce on the desirability of any national policy at a given juncture or under a particular situation prevailing in the country. Similarly, in Zippers Karamchari Union v. Union of India, the de-reservation of an integrated zip-fastener manufacturing plant after having followed protectionist policies for the past 25 years was challenged using the socialist ideal of protectionism of small scale industries. The Supreme Court rejected this doctrinaire approach and found the policy of de-reservation to be capable of producing quality zip fasteners worthy of competing in the world market and also of generating more employment in the field of readymade garments and leather industry. Based on this, it was held that there was nothing unconstitutional about the policy. The continuation of this trend was witnessed in BALCO Employees’ Union v. Union of India, where the Supreme Court took the view that actions taken in public interest at one point of time need no longer serve the same purpose, as public interest was an ever-changing concept. Therefore, if in public interest, the Government could take over a sick company to preserve the productive unit and the jobs of those employed therein, it could also disinvest from the public sector companies for reducing the continuing drain on its limited resources or raising funds for its priority welfare or even mobilising funds for running the Government.

As rightly observed by Sinha, J., in State of Punjab v. Devans Modern Breweries, though the expression “socialist” is found in the Preamble, constitutional interpretation has to reflect societal changes without doing damage to the core constitutional intent of the makers, especially in the age of globalisation when vast changes are taking place both at the social and political levels. Therefore, from a constitutional perspective, there is no blanket prohibition against privatisation of higher education in India, as there is no chosen path prescribed by the Constitution for the attainment of the constitutional vision. At the same time, certain restrictions are indeed permissible as well as necessary, as the next section goes on to discuss.

Private Managements and their Rights

Using a fundamental rights discourse, it is well settled that private managements have the right to establish and manage educational institutions under Article 19(1)(g) of the Indian Constitution, as they are necessarily carrying on an occupation of their choice. In the case of minority institutions, Article 30(1) guarantees religious and linguistic minorities the right to establish and administer educational institutions of their choice. The right to establish and administer educational institutions whether under Articles 19(1)(g) or 30(1) broadly comprises of the right to admit students, to set up a reasonable fee structure, constitute a governing body, appoint well-qualified faculty, and take disciplinary action in cases of dereliction of duty. As far as permissible restrictions are concerned, Article 19(6) allows the State to impose reasonable restrictions on the right guaranteed by Article 19(1)(g) in the interests of the general public. Article 30(1) on the other hand looks at first sight to be an absolute right, a matter of very important consequence for the minority institutions.

The Doctrine of Proportionality and the Reasonableness of Restrictions

The concept of reasonableness plays an important role while gauging the permissibility of the restrictions on Article 19(1)(g). In State of Madras v. V.G. Row,23 it was held that various factors such as the nature of the right alleged to have been infringed, the underlying purpose of the restriction, the extent and urgency of the evil sought to be remedied, the disproportion of the restriction, and the prevailing conditions at the time of imposition of the restriction, would all be relevant in determining the reasonableness of the restriction. Though the restriction in this case related to Article 19(2), the same principle was held applicable to Article 19(6) in Collector of Customs, Madras v. Nathella Sampathu Chetty.24 Unfortunately, in the Indian scenario, this has not been followed many a times. A good example is the price-fixation regime in socialist India and the judicial attitude of deference to the legislative and executive policy in this regard.25 This attitude has in fact been criticised26 as showing complete disregard to the judicial evaluative process as laid down in V.G. Row and Chintaman Rao v. State of M.P.27 At a conceptual level, however, this principle of reasonableness assumes greater significance as a manifestation of the doctrine of proportionality in the Indian constitutional context. In Om Kumar v. Union of India,28 the Supreme Court held that the principle of proportionality was applied vigorously to State action in India ever since 1950, in the case of legislation relating to restrictions on fundamental freedoms. The principle expounded in V.G. Row was heavily relied upon to derive this conclusion. It was also conclusively pronounced that except in situations of challenge to legislative or administrative action on the ground of the ‘arbitrariness doctrine’ in Article 14, all State action having a restrictive effect on fundamental rights would be tested on the anvil of the doctrine of proportionality.

It is therefore imperative to understand the proportionality doctrine and its implication on the restrictions that may be imposed on the rights of both minority and non-minority private educational institutions. The doctrine of proportionality essentially involves a balancing of competing interests to ensure a proportionality of ends, as well as securing the proportionality of means by permitting only the least restrictive choice of measures by the legislature or the administrator for achieving the object of the legislation or the purpose of the administrative order.29 Essentially, there are three important criteria used while applying the doctrine of proportionality. The necessity criterion prevents the State from taking any action that goes beyond what is necessary to achieve its aims, i.e. the method least burdensome to the affected persons.30 The suitability criterion insists that the means chosen be suitable for achieving those aims. As per the balancing criterion, the State must have balanced proportionately the burdens imposed on affected persons against the importance of the purposes sought to be achieved.31 In determining the reasonableness of any restriction using proportionality, the legislative objective should be sufficiently important to justify such a restriction, the measures designed to meet the legislative objective should be rationally connected to it, and the means used to impair the right or freedom should be no more than is necessary to accomplish the objective.32 These principles go to show that the nature of the competing interests play a significant role in ascertaining the limit on constitutionally permissible restrictions.

Legitimate State Interest in Private Higher Educational Institutions

As already seen, the noble constitutional goals of social justice and equality are part of the larger constitutional vision, and would most certainly qualify as legitimate competing interests. These are, however, abstract by their very nature, and in a situation where the State does not have any financial stake in the matter, the uncertainty involved in the usage of these terms should not be wrongfully exploited to the disadvantage of the private managements. Under Article 41 of the Indian Constitution, even the State’s aspiration to secure education to its citizens is restricted by the limits of its economic capacity and development. When Article 41 itself restricts the provision of higher education to the financial capacity of the State, there can be no legitimate State interest that every student, regardless of merit, gets access to higher education. At the same time, there are certain compelling interests that the State can legitimately protect in the realm of private higher education.

The Universal Declaration of Human Rights (U.D.H.R.), to which India is a signatory, provides that higher education shall be made equally accessible to all on the basis of merit.33 Since resources are limited in nature, compulsory higher education for everyone is not feasible. At the same time, meritorious individuals should have access to higher education. This is the guiding principle behind this provision. The right to development is also gradually attaining the status of a human right. The content of this right can be derived from the U.N. Declaration on the Right to Development, 1986, which describes development as a comprehensive economic, social, cultural and political process that aims at constant improvement of well being of people and of individuals on the basis of their active, free and meaningful participation in the process.34 As well established by now, constitutional and other legal provisions should, as far as possible, be interpreted in a manner that best facilitates the attainment of international obligations and goals.35 When Articles 19(1)(g) and 19(6) are interpreted in the light of India’s constitutional vision as well as international obligations such as U.D.H.R., it becomes clear that the State has a compelling interest in ensuring that meritorious students are not denied admission to higher educational institutions due to other considerations.

As a necessary corollary to this, it is legitimate State interest that private educational institutions follow the principle of merit while admitting students. It is also legitimate State interest that poverty does not stand in the way of meritorious students who are desirous of pursuing higher education. Since the quality of higher education is important in shaping the future of the nation, the State also has a legitimate interest in ensuring excellence in higher educational institutions, whether they are of a private or public character. However, these legitimate interests should be balanced with the rights of the individual as per the ‘balancing criterion’ in the proportionality doctrine. Moreover, this doctrine requires that the least restrictive and most suitable means be employed to achieve these legitimate interests, as the fundamental rights of private educational institutions hang at the other end of the balance.

Balancing of interests

In P.A. Inamdar v. State of Maharashtra,36 the Supreme Court favoured maximum autonomy for private educational institutions in the sphere of admissions as well as determination of fee-structure. Both minority and non-minority private institutions seeking recognition from the State could be regulated through the imposition of conditions consistent with the requirement of ensuring merit, excellence of education and prevention of mal-administration. Such conditions could extend to prescription of minimum standards for the faculty, the existence of certain basic infrastructure in the form of funds, property and appropriate technical equipment required for the effective imparting of the particular discipline taught in that institution without which the private institution would merely be a ‘college in a shed’, and any other reasonable regulations of similar nature. However, according to the Hon’ble Court, the State could not impose its policy of reservations on the private managements, nor could they prescribe differential fee structure based on government and management quota. In short the whole idea of a compulsory Government quota, the product of the Supreme Court decision in Unnikrishnan J.P. v. State of A.P.,37 was conclusively declared impermissible.38 To overcome this much-lamented verdict, Article 15(5) has been introduced in the Indian Constitution.39 The State Legislature of Kerala has also passed a bill attempting to override the decision in Inamdar and providing for prohibition of capitation fee, regulation of admission, fixation of non-exploitative fee, reservation of seats to Scheduled Castes, Scheduled Tribes and other socially and economically backward classes, and other measures to ensure equity and excellence in professional colleges run by private managements.40 These measures have the possibility of giving rise to fresh confrontation. At this juncture, it is very important to take stock of the situation and critically examine whether the position favoured by the Supreme Court, or the stand taken by the States and the Parliament, is constitutionally more justifiable.

Inamdar, though this judgment does not specifically state so, has used the doctrine of proportionality while reaching the conclusion that States have no power to insist on seat sharing in the unaided private professional educational institutions by fixing a quota of seats between the management and the State. This thinking is seen in the least restrictive alternative suggested by the Court: consensual arrangements between the private managements and the State, or voluntariness on the part of the managements themselves, to award scholarships to their students or follow a policy consistent with the reservation policy of the State. It is felt that this stand taken by the Supreme Court is extremely sound. Firstly, the Unnikrishnan scheme fails to fulfil the “suitability test” due to two major defects.41 The doctrinaire socialist assumption that Governmental quota alone could ensure better access to higher education influenced the initiation of the differential quota system. Unfortunately, from a rationalist point of view, it was seen that the Unnikrishnan scheme did not in fact improve access to higher education. Many private educational institutions were unable to continue with their activity, as the differential fee structure resulted in their financial incapacitation. If this process continued, it was evident that the private institutions would be forced to close down, and the consequent supply shortfall would lead to reduced access. Moreover, differential quota and fee-structure had led to the defect of cross-subsidisation and the consequent overturning of the legislative objective of subsidisation of poorer students by the richer ones.42 Secondly, it would be unduly harsh to insist that the private unaided institutions charge the fee prescribed by the Government. Here, we are not speaking of a situation where the Government is spending any public money. On the contrary, the Government does not have enough resources of its own. It would be unfair in such a situation to cripple the private player who is willing to provide the same service which the Government cannot provide, and force him to fulfil the role of the State. It was precisely the faulty logic of equating private educational institutions with State-run colleges that led Unnikrishnan to impose State-dictated fees on private institutions. The fact of recognition and affiliation of private institutions by the State was used to support this treatment. Recognition and affiliation, however, regardless of the merits of these processes, are only like any other Governmental regulation in other activities. Therefore, if the Unnikrishnan logic were to be extended, the Government could dictate the private players in any sector of some consequence where it faces a resource crunch, to provide the service at the rate fixed by it. This would render Article 19(1)(g) a mere paper right. Thirdly, there are better and less restrictive means that can be used by the State to achieve the same objective, perhaps in a more effective way. These means have not been explored due to lack of willingness and imagination on the part of the State.

For instance, in the United States, private universities have vigorously implemented the affirmative action programme because they see immense value in increasing the diversity in their student body.43 Like in the United States, it is very possible that private colleges in India consider it in their best interest to provide subsidised education to poor meritorious students. Such measures have the effect of attracting some of the best talent, who otherwise would have felt discouraged from even thinking of education in these institutions. In fact, a good number of Indian students go to the United States on student aid, and add considerable value to the institutions that admit them. If that be the case, an assumption that the same would never occur in India is devoid of merit. The MacBride principles that took shape as a measure of social justice in places of employment, in Northern Ireland, can also be considered a good example of how non-binding obligations have succeeded in ensuring equality of opportunity. Even giant multinationals today consciously make efforts to stick to these principles while hiring their personnel. The reason for this is simple: Compliance with MacBride principles is considered an ethical business practice in itself, thereby contributing to the value of the multinational.44 The MacBride principles profess to ensure equality of opportunity, as opposed to equality of outcome. Though special action is requested from employers for increasing the number of minority employees in the workforce, the Principles do not speak of any special consideration to religious minorities when taking employment decisions. This allows for employers to make their hiring decisions based on merit while at the same time living upto their obligation.45 Measures such as these have in fact produced good results in ensuring equality of opportunity without imposing unnecessary financial burden and unwarranted interference with the autonomy of private institutions. These are clearly less restrictive measures, and when such measures exist, it is impermissible to rely on the Unnikrishnan scheme. The State could very well provide special incentives to private managements who provide merit-cum-means scholarships. However, it would violate Article 19(1)(g) if private managements are compelled to admit students at a subsidised fee and bear the cost for the same.

As regards the policy of reservation, it is again felt that any compulsion placed on private institutions would fly against the face of the proportionality standard of review and hence end up as an unreasonable restriction. Even if the State asks private managements to induct members of the lower strata of society, such as SCs and STs, at higher rates of fee, it would be an impermissible restriction. Private managements have the right to maintain high standards and quality of education in their own colleges. This would clearly be infringed, if non-meritorious candidates from weaker sections of the society have to be compulsorily admitted. It is purely a matter of individual choice for the private institutions to adopt the reservation policy. Even here, providing special incentives to those private managements that follow the reservation policy is the only permissible balance between the right under Article 19(1)(g) and the State’s interest of social justice.

It may seem that the least-restrictive means suggested by the Court in Inamdar are completely dependent on the voluntariness of the private educational institutions, and therefore ineffective. The ‘balancing criterion’ gives the counter to this. While it may be true that compulsory reservation is the most effective method of ensuring that some percentage of the students is from backward classes, the least-restrictive means under the proportionality doctrine need not necessarily be as effective as the most-effective yet most-restrictive means. To see the logic behind this proposition, let us take an extreme situation. It is not disputed that the State has a legitimate interest in the security of the nation. The most effective means of convicting those who are a threat to the nation would be to extract confessions out of them by resorting to custodial torture. However, this is not permissible as the rights of the accused are paramount. Some less-restrictive measures such as admissibility of voluntary confessions made to the magistrate can be resorted to. Though these measures may not be as effective as custodial torture, they strike the right balance between the legitimate State interest and the rights of the individual. Applying the same logic, while compulsory reservations or compulsory subsidised fee-quota, with all its imperfections as pointed in T.M.A. Pai, may be the most effective means, balancing the State interest in securing social justice with the right under Article 19(1)(g) requires that only voluntary methods be used. In the light of this discussion, Article 15(5) is to be critically evaluated.

Article 15(5): Inamdar undone?

Article 15(5) is very similar in its wording to Article 15(4) of the Constitution, which was introduced to mitigate the effect of the decision in State of Madras v. Champakam Dorairajan.46 The latter provision was held to be a special provision in M.R. Balaji v. State of Mysore, the purpose of this provision being furtherance of the principle of absolute equality. This special provision was held to be an exception to Articles 29(2) and 15(1). As is evident from the language itself, Article 15(4) cannot violate the general principle of equality enshrined in Article 14. This serves as the underlying rationale for the conclusion in Balaji that reservations under Article 15(4) cannot in any case exceed 50 percent.

Using these principles, if we closely examine Article 15(5), it is seen that this provision is only an exception to Article 19(1)(g) and Article 15 itself. It cannot violate the principle of equality in Article 14. In the case of Article 15(4), it is true that reservations to the extent of 50 percent were treated as permissible “special provisions”, in Government or Government-aided institutions. Such measures were considered as furthering the principle of equality of opportunity. The Government had a legitimate interest in furthering social justice, and on a balance of interests, could discriminate against some deserving students in favour of other backward students. This measure did not violate Article 14 as the socially and educationally backward classes protected by Article 15(4) were a separate class who needed reservation for getting real access to Government and aided institutions. Article 15(5) on the other hand deals with “special provisions” in private educational institutions. It is submitted that such “special provisions” in the case of private institutions cannot extend to introducing compulsorily a subsidised fee-quota or reservations in admissions. This is due to the reason that Article 15(5) does not exclude the operation of Article 14, and any of the above-mentioned measures if compulsorily imposed upon private institutions would lead to violation of Article 14.

Such measures as rightly pointed out in T.M.A. Pai and affirmed in Inamdar, lead to nationalisation of education. Nationalisation may or may not be right, but it is certainly wrong to impose the cost of nationalisation on private institutions. In other words, if State obligations are compulsorily imposed on unaided institutions, it is a case of equal treatment of unequals, this being a violation of Article 14. An unaided private institution does not have the power of taxation to raise money from the public exchequer. The major portion of funding for a private management can come only through its students, as opposed to a Government institution, which has the backing of the State purse. This makes private institutions fundamentally different in their character from Government institutions. Their predicament is special: they cannot charge the same fee as a Government institution, and expect to continue providing education. At the same time, they also cannot survive in the long run if, after charging higher fees, they fail to provide education of the highest quality. To ensure this, they have no choice but to admit the most meritorious students in their institution. This is inconsistent with the State insistence on reservations. On the other hand, with Government institutions, since the major source of funding comes through the public exchequer, they can afford to take ample measures for promoting social justice – a choice which private unaided institutions inherently lack, thus again making them fundamentally distinct from Government institutions.

As a counter to these arguments, it may very well be stated that the same percent of reservation or subsidised fee-quota as prevails in Government institutions need not be imposed on private institutions. This argument fails to see that regardless of the percent of reservation or subsidised fee-quota introduced as a “special measure” under Article 15(5) the effect of such measures is to violate Article 14. To clarify this further, whether the percent of reservation is 50 percent or 10 percent, the State is ultimately dictating compulsory norms on private institutions and Government institutions. If these norms relate to reservation or subsidised fee-quota, both Government and private institutions are in reality treated alike despite there being a fundamentally distinct difference between the two that makes it impermissible to dictate any such norms to private institutions. This in turn violates Article 14 as such measures result in like treatment of unequal institutions in total disregard of the fundamental difference between them, and consequent harm to the interests of one class of these institutions, namely private unaided institutions.

Therefore, Article 15(5) as it stands presently is ineffective in achieving the objective of circumventing the Inamdar decision. It can at the same time be used to further the decision in Inamdar by facilitating “special provisions” such as merit-cum-means scholarships provided on a voluntary basis with incentives for the same, free Government-funded entrance examination coaching for poor students and other like measures. It is very likely, however, that this Article may be amended along the lines of Article 31B, so that the special measures under Article 15(5) will prevail, notwithstanding anything contained in Part III. It is also likely that measures taken under Article 15(5) may be included within the IXth Schedule, thereby protecting them from a challenge based on Article 14. To meet all such situations, one has to rely on the basic structure doctrine propounded for the first time in the seminal decision in Keshavananda Bharati v. State of Kerala.

An unconstitutional “constitutional” amendment

In Indira Sawhney v. Union of India (II), it was held that the principle of equality as enshrined in Article 14 is part of the basic structure of the Constitution. This principle was used to condemn the non-exclusion of the “creamy layer” from the reservation policy, by the State of Kerala. This 3-judge bench verdict of the Supreme Court has derived this principle from the pronouncement in Keshavananda that the promise in the Preamble is part of the basic structure. The Preamble as we know, specifically speaks of equality of status and opportunity. Article 14 guarantees the protection of this promise, and is therefore, part of the basic structure. As already submitted, Article 15(5), if used to provide for compulsory reservation or subsidised fee-quota, would result in placing the same burden on private institutions as well as government institutions. Private institutions due to their fundamentally different character are incapable of taking this burden which government institutions, on the other hand, can effectively fulfil. This is a clear case of equal treatment of unequal institutions, and hence violative of Article 14 which is part of the basic structure. Therefore, though Article 15(5) is not per se unconstitutional, it cannot be used to provide for these compulsory measures as such measures go against the basic structure doctrine.

There is also another aspect pertaining to the scope of Article 15(5) that would render it unconstitutional. Protective measures taken under Article 15(5) cannot be extended to minority unaided educational institutions. In Inamdar, as well as in T.M.A. Pai, it was held that minority rights under Article 30(1) do not confer any additional right to the minorities over and above the right of the majority-run institutions under Article 19(1)(g). Article 30(1) was to be construed more in the lines of a special protection for safeguarding minority interests. This is a very significant distinction. On applying the proportionality doctrine, the State’s legitimate interest in ensuring access to higher education based on the principle of merit is eroded to the extent this minority interest is to be safeguarded. Therefore, while in the case of majority-run institutions, the State can ensure strict adherence to the principle of merit in admitting students, the same cannot be done with minority institutions as the right under Article 30(1) extends to securing access to higher education among students of the minority community who may be less meritorious than the others. The minority institution’s opportunity to further this goal cannot be hampered. However, apart from this, both the minority and majority private unaided institutions have the same right. Therefore, while a compulsory reservation policy cannot be extended to minority unaided institutions, a compulsory subsidised fee-quota, if permissible, can be extended to both. The minority institutions in this situation can still take students from their community but at a lesser fee. There are many such special measures that may be taken under Article 15(5) which do not in reality have any bearing on the additional protection conferred on minority institutions. In all such cases, if these measures can be legitimately taken against majority-run institutions, they should also be enforced against minority-run institutions, as the only difference between these institutions is the one brought in by way of the additional protection conferred by Article 30(1). Despite this, Article 15(5) introduces a blanket waiver for minority-run institutions from all such measures. This is a case of unequal treatment of equals. If the minorities have an additional protection under Article 30(1), the operation of those measures which have a negative impact on this protection can be waived for these institutions. However, the operation of other “special provisions”, it being nobody’s case that reservation is the only measure permissible under Article 15(5), cannot be waived for minority unaided institutions, as this would violate Article 14. In the earlier situation of equal treatment of unequal institutions, Article 15(5) could still be interpreted in a constitutional manner. In this situation, on the other hand, there is no possibility of doing this without violence to the very wording of this Article. On this count, Article 15(5) again falls foul of the basic structure doctrine.

Merit and the Constitutional Challenge

As already discussed, the State has a legitimate interest in maintaining standards of excellence in higher educational institutions. The procedure for admissions assumes significance in this endeavour. At the same time, the right of private institutions under Article 19(1)(g) also extends to the mode of admissions. Moreover, the State also has to control unhealthy practices such as profiteering and levying of capitation fee, while at the same time permitting each institution to charge enough fees for generating a reasonable surplus. The right balance has to be struck here between the competing interests. It is submitted that Inamdar has been largely successful in doing the same.

In Inamdar, though private educational institutions were allowed to conduct their own examinations, the concept of a “consortium” entrance test was mooted so as to take care of the legitimate concerns of the students. This concept, wherein all institutions imparting similar type of professional education hold a joint entrance examination, is certainly a commendable solution. The triple point criteria of fairness, transparency, and non-exploitation, can be used to challenge these entrance examinations, and a judicial finding to this effect can seriously hamper the reputation of these institutions. The State has also been given maximum authority to put in place effective institutional machinery for ensuring adherence to the golden triumvirate. The private institutions have to abide by the determination of merit through this common entrance test, and can only admit students through a centralised counselling process for all such institutions. These safeguards would also help in cutting down on capitation and profiteering. Moreover, the regulatory bodies established in Islamic Academy for the purpose of supervision over the admission procedure and fee fixation have been upheld as being a reasonable restriction under Article 19(6). This is also a welcome finding.

In short, the decision in Inamdar strikes a good balance between the legitimate interests of the private educational institutions, the State, and the students. A notable point about this decision is the reasonable reliance it places on market forces. This is extremely laudable. One would be taking a doctrinaire view of social justice by not doing so. It is true that there are some private institutions keen on fleecing students. This, however, does not justify unreasonable regulations that prevent good institutions from excelling further. Regulation against market imperfections, and maximum autonomy to the players in the market – this seems to be the Inamdar stand.

The Desirable Path: A Case for Deregulation

Role of the State in the administration of Private Institutions

In T.M.A. Pai, the issue of day-to-day administration of private unaided institutions was briefly discussed, with the tenor of the discussion being in favour of maximum autonomy to such institutions. The most important concerns here are as regards the quality of the faculty, the teaching plan and material, the fairness and vision of the governing body, and conditions of service of the employees. In all these cases, it is felt that minimum standards need to be fixed by the State. Ultimately, the day-to-day administration is instrumental in shaping the long-term excellence of the institution. Beyond minimum standards, however, maximum autonomy should be given to the institution to prescribe higher standards. The Supreme Court has accepted this view in Brahmo Samaj Education Society v. State of West Bengal. The Hon’ble Court held that even in private aided institutions, independence to select teachers from the list of qualified candidates was fundamental to the academic and administrative autonomy. Another interesting point in this case is that the Court specifically found it unnecessary to determine whether the concerned institution was a minority institution under Article 30(1). According to the Court, the right was already available under Article 26(a) and 19(1)(g). The implication of this finding could possibly be that in situations where the specific question of autonomy has no bearing on the minority character of the institution, the Supreme Court jurisprudence in the context of autonomy of minority institutions under Article 30(1) could be extended to other private educational institutions as well. This is also the necessary fallout of the decision in T.M.A. Pai that the right under Article 30(1) would be subject to restrictions made in national interest. Therefore, presently, there exists no substantial difference between the rights under Article 19(1)(g) and 26(a) on the one hand, and the right under Article 30(1) on the other, except that the minority status guaranteed by the latter should not be denuded. As a result, the various Supreme Court decisions favouring maximum autonomy to minority educational institutions would also apply to other private educational institutions, especially unaided institutions. In fact, the principle of maximum autonomy has been applied by the Supreme Court in I.I.T.T. College of Engg. v. State of H.P., while quashing an interim order by the Delhi High Court directing the Director of Technical Education to take over the management of the appellant private unaided college. The Supreme Court remarked that a direction of this nature was against the principle of autonomy with regard to the administration, vested under Article 19(1)(g). From these pronouncements, it is quite evident that the Supreme Court is very much in favour of reading the permissible extent of restrictions under Article 19(1)(g) in a manner furthering the desirable principle of maximum autonomy.

From Administrative autonomy to Academic freedom: The Road Ahead

Ultimately, Indian Universities will be able to shape the global future as desired by Shri. Alladi Krishnaswami, only if the standard of higher education meets up to the global standard. This in turn cannot be engineered in any manner. The only way out is to grant maximum academic freedom. Unfortunately, the present structure of higher education in India, dominated by innumerable regulations and regulatory bodies, presents an altogether dismal scene. The biggest criticism has also been one which if true could be fatal – the absence of quality.

The structure of higher education is presently one that gives primordial importance to the one-size-fits-all model of curricula and syllabi prescribed by the University Grants Committee and other regulatory bodies. It is impossible for a private institution, even if it desires to have better standards or “in sync with the times” syllabi, to implement it. The concept of affiliation demands that every institution be affiliated to a university. As per the U.G.C. Act, all universities are to be started under a Central or State Act, except for deemed universities. Even the State Universities, however, have to enforce the standards prescribed by the U.G.C. The Supreme Court has also given its approval to this thinking. In State of Tamil Nadu v. Adhiyaman Educational & Research Institute,55 it was held that the States could not use their law-making power under Entry 25, List III, to prescribe standards higher than those prescribed by the U.G.C. This principle has very recently been affirmed in State of Maharashtra v. Sant Dnyaneshwar Shikshan Shastra Mahavidyalaya.

It is submitted that the whole structure of affiliation should be suitably modified to grant greater autonomy to private institutions. Though the Supreme Court in Prof. Yashpal v. State of Chattisgarh57 had passed strictures against private universities, good quality private universities are in fact the need of the hour. Otherwise, there is no incentive for any college, public or private, to aspire for excellence, as the degree awarded will be that of the university. On the other hand, if an opportunity is given to private institutions to confer their own degrees, it would give them the incentive to improve the quality of education in their institution so that the degree conferred by them is valued most in the job market or in foreign countries. This is a matter, however, on which suitable legislation has to be passed. Though one may argue that the right to establish private universities would also fall within the ambit of the right under Article 19(1)(g), and this is in fact true, this right can only be properly regulated if our law-makers display the alacrity to pass a legislation detailing the applicable regulations and restrictions. This should not be left to a Court of law, as was done in the case of private colleges.

Concluding Remarks

When Milton Friedmann argued in the American context that public education is the only major social enterprise that runs counter to a basic market economy, he would not have imagined that his observation would by and large hold true in the Indian context as well, especially with higher education.58 When undue restrictions such as fee-regulation and reservations are imposed on private institutions in the name of social justice, consistency in policy is lost. The Indian State has not told its private hospitals to charge differential rates, nor has it ordered private hotels to provide food and lodging at subsidised cost. This is despite the fact that both health and food are basic goods for the survival of mankind, maybe even more important than higher education in this regard. The attitude of the State in the field of higher education has been to impose its own burden on private players, an attitude decried by the Supreme Court in Inamdar. Despite this, Article 15(5) stands testimony to the fact that our policy-makers still refuse to be guided by reason. One can only wish that the State instead of attempting to unduly restrict private players fulfils its own responsibility. Since India is a signatory to the General Agreement on Trade in Services (GATS), it will soon have to open its doors to international service providers in the field of higher education as well. The only way forward is to improve the quality of education. Instead of thinking about this, our policy makers seem keener to cling to an outdated model of social justice. Truly speaking, the privatisation of higher education has thrown up much less constitutional challenges than the attempt of the State to control the free play of market forces.

About the Author:

No further information.


Rajesh Kumar Gupta on 2009-03-18 01:06:12 wrote,

Quality Content

Prashant Gaur on 2009-03-19 00:00:21 wrote,

Well a very gud article...!!!