10805791_effects of Current Issues on Indian Economy

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PRIVATISATION OF HIGHER EDUCATION IN INDIA:CONSTITUTIONAL PERSPECTIVES AND CHALLENGES

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 noblepart to play in regard to the future of civilisation.

- Shri. Alladi Krishnaswami Aiyyar, in 1929. 1

INTRODUCTION

A spectre haunts the Indian higher educational system, the spectre of

privatisation. The governments share in overall education expenditure in1983, 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, nowaccounts for 86.4 percent of seats. In the case of medical colleges, theprivate 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 chunkeducated nearly 37% of the students who had enrolled into higher

education.3 Moreover, the protracted and fiercely contested battle in the lastfive years, over seat-sharing and fee structure in these institutions, shows

that privatisation of higher education has become an issue of nationalimportance. However, it is mainly after Indian policy-makers, without much

choice in this regard one should say, cast the dice in favour of privatisationin the 1990s that the higher education sector has witnessed this massiverise in the number of private players.

In fact, the 1950s had witnessed the exercise of a completely differentchoice 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 tointroduce elements of Nehruvian socialism into the State-engineered

educational sector. This decision gave India the few islands of excellence itcan 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bureaucratic inefficiency and outdated syllabi.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 burgeoningrise 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 theneo-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
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colleges. On the flip side, a mere 8-9 percent of the relevant age-groupbetween 20 and 24 years is presently enrolled in these institutions, as

against 50-85 percent of this age-group of the population availing of thebenefits of higher education in developed countries.6 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, severalconcerns about the quality of, and access to, Indias higher educational

system are being expressed on a scale much larger than ever before. 7 Inshort, higher education in India is a bundle of contradictions.8

In this context, the marked shift towards privatisation in higher education

can be analysed using different perspectives. There is certainly scope for anentire debate on the desirability and merits of privatisation and capitalism

over socialism and State-sponsored higher education. Such a debate wouldprobably 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 biasinherent in private education and how this bias works against certain

underprivileged sections of the society. Accepting that all of these areequally important vantage points from which the whole issue of privatisation

of higher education can be examined, this paper focuses on using the IndianConstitution, 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 referredto in this paper as the constitutional vision. At the same time, it is less

certain whether the Constitution prescribes any doctrinaire means for thefulfilment of this vision. Ultimately, whether it is higher education or landreforms, the economic and social ideologies perpetrated and implemented by

the power-holders in each epoch of Indias national evolution have probablykept 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 otherconstitutional provisions.

Thus, when we look at privatisation of higher education from the perspectiveof this constitutional vision, it is clear that there are two materially different

issues to be addressed. The first issue is that of permissibility. Isprivatisation of higher education constitutionally permissible in the firstplace? If the answer to this is in the affirmative, the next aspect of

permissibility pertains to the extent of privatisation as well as the restrictionson privatisation. This issue of constitutional permissibility in the arena of

privatisation of higher education has been dealt with extensively by theHonble Supreme Court of India as well. Therefore, a discussion of this issue

also involves an analytical examination of the important judicial
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pronouncements that deal with private educational institutions. The secondissue, being one less discussed by judges and less considered by policy-

makers, is that of desirability. Here, the structuring of private highereducation 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 themanagement of private institutions. The unavoidable foray into the realm of

policy when examining questions that have a bearing on the issue ofdesirability, 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 havealso delved into the question of whether the Constitution specifies any route

for the attainment of these goals, for if it does, then the whole privatisationmodel could theoretically speaking be inconsistent with the Constitution.

Using this as a vantage point, it is next sought to examine theconstitutionally 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 andextent of constitutionally permissible privatisation of higher education in

India. From here, the second part of this paper goes on to examine the issueof desirability. This stems from the fact that higher education plays a

prominent role in fulfilling the constitutional vision. Keeping in mind theconstitutionally permissible restrictions on private higher educationalinstitutions, and the challenges imposed on higher education per se by the

constitutional vision, I have sought to examine how best this vision can berealised. While doing so, I have also attempted to interpret the permissible

in a manner most consistent with the desirable.

I. PRIVATISATION OF HIGHER EDUCATION: THE PERMISSIBLE

- The Indian Constitution as a Guiding Document

The Preamble to the Indian Constitution constitutes its spirit and backbone

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, and therefore nobetter 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 deeperexamination, 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 jointassurance to an individual, of both these kinds of justice, can result in guaranteeing political
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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., inMinerva 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.12 Mostimportantly, 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 expresscommitment 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. Asrightly observed by Gajendragadkar C.J., in Akadasi Padhan v. State of Orissa,13 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 androot 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 theprinciple 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 IndianConstitution is an organic document, flexible enough to be interpreted according to the changingtimes,14 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 meansfor 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.15 Even at the time of

drafting of the Constitution, the idea was only to create a democratic constitution with a socialistbias 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,17 it was contended that thetelecommunications 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
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desirability of any national policy at a given juncture or under a particular situation prevailing in

the country. Similarly, inZippers Karamchari Union v. Union of India,18 the de-reservation of an

integrated zip-fastener manufacturing plant after having followed protectionist policies for thepast 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 alsoof 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,19where the SupremeCourt 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 forreducing 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,20 though the

expression socialist is found in the Preamble, constitutional interpretation has to reflectsocietal 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 politicallevels. 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 restrictionsare 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 toestablish and manage educational institutions under Article 19(1)(g) of the Indian Constitution,

as they are necessarily carrying on an occupation of their choice.21

In the case of minorityinstitutions, Article 30(1) guarantees religious and linguistic minorities the right to establish andadminister 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.22 As far aspermissible 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 veryimportant consequence for the minority institutions.

- The Doctrine of Proportionality and the Reasonableness ofRestrictions

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 factorssuch 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 berelevant in determining the reasonableness of the restriction. Though the restriction in this case
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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 Indiaand the judicial attitude of deference to the legislative and executive policy in this regard.25This

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 Kumarv. Union of India,28

the Supreme Court held that the principle of proportionality was applied vigorously to Stateaction 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, allState 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 privateeducational institutions. The doctrine of proportionality essentially involves a balancing of

competing interests to ensure a proportionality of ends, as well as securing the proportionality ofmeans 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 ofproportionality. 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 burdensimposed 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 thelegislative 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. 32These principles

go to show that the nature of the competing interests play a significant role in ascertaining thelimit on constitutionally permissible restrictions.

-- Balancing of interests

InP.A. Inamdarv. State of Maharashtra,36 the Supreme Court favoured maximum autonomy forprivate 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 ofensuring 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 theeffective 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 Honble Court, the State could not impose its policy of

reservations on the private managements, nor could they prescribe differential fee structure based
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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.38To 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 ScheduledCastes, 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 isvery 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 ofproportionality 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, orvoluntariness 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 takenby 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 theinitiation 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 thatthe 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 ofpoorer students by the richer ones.42Secondly, 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 Governmentdoes 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-dictatedfees 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
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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. Suchmeasures 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 theinstitutions 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 ofhow 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 TheMacBride 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 theirhiring 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 withoutimposing 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 specialincentives 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 privateinstitutions 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 animpermissible 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 amatter 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 States interest of

social justice.It may seem that the least-restrictive means suggested by the Court in Inamdarare 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 compulsoryreservation 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 logicbehind 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.
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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 theindividual. 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.

-- An unconstitutional constitutional amendment

InIndira Sawhney v. Union of India (II),50 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 ofKerala. This 3-judge bench verdict of the Supreme Court has derived this principle from the

pronouncement inKeshavananda 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 alreadysubmitted, 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 governmentinstitutions. 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, itcannot 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 itunconstitutional. 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 minorityrights under Article 30(1) do not confer any additional right to the minorities over and above theright 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 States legitimate interest in

ensuring access to higher education based on the principle of merit is eroded to the extent thisminority 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 securingaccess to higher education among students of the minority community who may be less

meritorious than the others. The minority institutions opportunity to further this goal cannot be

hampered. However, apart from this, both the minority and majority private unaided institutionshave 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 communitybut 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
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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 anadditional 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 nobodys case that reservation is the only measure permissibleunder 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 nopossibility 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 asprofiteering 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 herebetween 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 thelegitimate 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 challengethese 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 placeeffective institutional machinery for ensuring adherence to the golden triumvirate. The privateinstitutions 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 theadmission 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 Inamdarstrikes a good balance between the legitimate interests of theprivate 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 privateinstitutions 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 theInamdarstand.

II. THE DESIRABLE PATH: A CASE FOR DEREGULATION


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- 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 bythe State. Ultimately, the day-to-day administration is instrumental in shaping the long-term

excellence of the institution. Beyond minimum standards, however, maximum autonomy shouldbe given to the institution to prescribe higher standards. The Supreme Court has accepted this

view inBrahmo Samaj Education Society v. State of West Bengal.51 The Honble Court held that

even in private aided institutions, independence to select teachers from the list of qualifiedcandidates 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 findingcould 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 ofautonomy of minority institutions under Article 30(1) could be extended to other privateeducational 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 alsoapply 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.,52 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 unaidedcollege. 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 thepermissible 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. AlladiKrishnaswami, 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 academicfreedom. Unfortunately, the present structure of higher education in India, dominated by

innumerable regulations and regulatory bodies, presents an altogether dismal scene. 53 The biggestcriticism has also been one which if true could be fatal the absence of quality.54

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 andother 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
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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 alsogiven 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 hasvery recently been affirmed in State of Maharashtra v. Sant Dnyaneshwar Shikshan Shastra

Mahavidyalaya.56

It is submitted that the whole structure of affiliation should be suitably modified to grant greaterautonomy to private institutions. Though the Supreme Court in Prof. Yashpal v. State of

Chattisgarh57had 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 otherhand, 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 toestablish 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 thealacrity 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.

III. 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 thathis 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 onprivate institutions in the name of social justice, consistency in policy is lost. The Indian Statehas 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 inthis 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 byreason. 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. Insteadof 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.
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10805791_effects of Current Issues on Indian Economy

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