MANY public-sector universities, especially the older and bigger ones, have been facing severe budgetary pressures for the last few years. Inflation has been close to double digits during many of these years. The government has cut funding for recurrent expenses of universities a number of times, and in those years when the funds have not been cut, the government has barely covered the previous years’ expenses in nominal terms.
The universities cannot increase their tuition fees by much. So, they have been feeling the squeeze a lot. Expenditures have been increasing, even without any expansion of facilities, due to inflationary and other cost-push factors, while revenues have not been increasing and government assistance has been going down. It is not surprising that some of the older universities, that also have significant pension liabilities, have been severely short of funds. Some have not been able to make their payroll in certain months and have, at times, had to be given emergency funds. Some universities have delayed salary payments and even pension payments to their faculty, staff and retired employees.
But all this did not stop governments from continuing to set up new public-sector universities. Punjab alone had announced the creation of around 10 universities last year. The federal government has also set up a number of new higher education institutes — some very expensive ones among them. The recurrent expenses of these universities and higher education projects, once they start, will have claim over higher education funding as well. This will only mean more pressure on all the universities.
A few days ago, we saw the current government proposing only around Rs30 billion for recurrent expenses for universities for next year. Last year, the amount was approximately Rs65bn. If universities were in trouble with Rs65bn, what are they going to do with only Rs30bn? How are they going to survive the next year?
The amount our universities actually need is well in excess of Rs100bn.
The amount our universities actually need is well in excess of Rs100bn. The last government could only give Rs65bn. This had created a very serious problem for a number of universities and had even driven some to the brink of insolvency. If the proposal for cutting funds to Rs30bn goes ahead, this will completely decimate higher education in the public sector.
The appeal to the government would be to increase higher education funding. The future of young people and the future of the country depends on producing human capital that will put Pakistan on a decent growth trajectory and keep it there. Higher education plays a crucial role in this goal.
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If funding cannot be increased, at the very least the universities should be given as many funds (in real and not nominal terms) as they had last year. If we assume an inflation level of around 10 per cent, it would mean funding of about Rs72bn for the coming year. Even with this funding level it might still be necessary to a) stop most development projects, and b) reverse or at least halt the development of new universities/ projects that were announced last year. We clearly cannot afford new universities at this stage. And if we keep reallocating from the same fund, we will keep compromising on the quality of education that we can give to our students.
If the government, God forbid, does decide to cut funding to Rs30bn, then we should have a serious debate in the higher education sector about closing down a significant number of programmes in many universities and maybe even a number of universities themselves. There is no conceivable way in which public-sector universities can continue to offer all the programmes that they currently are if their funding is cut by half.
Asking universities to raise their own funding is not going to be of much help. How much can they raise the tuition fee by, even if they wanted to, in one year? Raising non-tuition revenues in the higher education sector in Pakistan is not easy. It is hard enough for private not-for-profit universities, it is near impossible for most of the bureaucratic, rule-governed public-sector universities to do. So, the only viable option will be selective closures.
Does the current government really want that? Is this the ruling coalition’s plan for higher education? They do not want to raise fuel prices for fear of the public reaction and for, supposedly, not wanting to hurt the poor, but would they be fine with killing the higher education sector in the country? It seems to be a really strange choice the government seems to be making.
Ideally, the government should be raising funding for the higher education sector substantially as the previous government had reduced it by too much and, at the same time, had started many new university/ higher education projects. But, these are tough financial times as well. Clearly, the government has not made it a priority to give education, school or university level, more funds in these times. If more funding is not available, the government should keep the funding levels at last year’s level but stop the work on new projects and move resources towards universities that are in financial distress.
If the government decides to cut funding by half, they should seriously consider closing down many programmes and universities. It will happen by default. It is better to do it by design. But the government should then also accept the fact that education has a fairly low priority for them. The consequences in terms of the impact on the current cohort of youth and on future growth prospects for Pakistan should also be acknowledged and accepted.
The writer is a senior research fellow at the Institute of Development and Economic Alternatives, and an associate professor of economics at Lums.
Published in Dawn, May 27th, 2022