Policy Measures for Private Sector Investment

Policy measures aimed at reforming education financing was made with two major propositions, viz.

(i) Improving the efficiency in the functioning of public institutions on the one hand, and

(ii) Mobilising resources from the non-governmental sources on the other.

The first proposition seeks to improve the efficiency in resource use with the objective of increasing education sector’s output without employing additional resources. Measures like changing the staff-student ratio, increasing the teaching workload, etc. are adopted to achieve this. The second proposition aims at diversifying the sources of funding by developing alternative arrangements to meet the costs of providing the education. The trend in achieving this is to shift the burden of cost from the public to the private and household domains.

Consequent to the adoption of structural adjustment programmes, the reforms suggested by international funding agencies (World Bank, 1994) particularly for developing countries include:

(i) Encouraging greater differentiation of institutions of higher education including development of private institutions

(ii) Cost-recovery mechanisms including cost-sharing with students

(iii) Redefining the role of the government by evolving a policy framework to make the sector more market friendly and public institutions more autonomous

(iv) Prioritising investments towards quality improvement.