7/18/2019 Blog Education

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License Raj in Indian education

Should the Indian Government deregulate education and end the license raj in education? Let's

look a bit into the history of license raj in India. The architect of the system of License Raj as

!andit "aaharlal #ehru$ India's first %rime minister. !rivate %layers could manufacture goods

&mostly bulk consum%tion goods only ith official licenses. The (uantity of goods they ere

alloed to %roduce as determined by the license regime$ not by free)market demand.

*ny attem%ts at a centrally %lanned economy fails to take into account the basic fact+ that value

is subjective$ and the (uantity$ (uality and %rices of goods that need to be %roduced is best

determined naturally by the demand and su%%ly in a free$ unregulated market. *ny attem%ts at

centrally controlling the economy amounts to dictating to the individuals the value that anything

in the market is su%%osed to have. In short$ the economy best orks bottom)u% as o%%osed to

to%)don.

In a free market$ the %rice of goods is determined by communication beteen buyers and sellers$as o%%osed to dictation by the government. The e,change of value is the blood circulation of

economy$ and government attem%ts at centrally controlling the economy amounts to obstructing

the natural flo. #ot only is it detrimental to the health of the economy$ one may argue that it is

unethical$ for it infringes u%on individual sovereignty$ the right of consenting adults to form

voluntary associations.

India had started out in the -/0s ith high groth rates$ o%enness to trade and investment$ a

 %romotional state$ social e,%enditure aareness and macro stability. *s a result of India1s

License Raj$ by the -20s$ the country as left ith lo groth rates$ closure to trade and

investment$ a license)obsessed$ restrictive state$ inability to sustain social e,%enditures$ macroinstability$ and economic crisis. The government of India then initiated a liberalisation %olicy

under !.3.#arasimha Rao. Liberalisation resulted in substantial groth in the Indian economy$

hich continues today.

4!roof is in the %udding$5 they say. * basic understanding of economics and a study of history

shos that government regulation in economy ham%ers economic develo%ment$ besides

tram%ling over individual liberty. The same a%%lies to our current education system. Its

accessibility is lo$ it encourages rote learning$ the syllabus is boring and diluted$ and its utility

for the industry is limited.

Should the government liberali6e and deregulate education$ this ill make it easier for %rivate

 %arties to establish education institutions$ and the com%etition in the education sector ill boom.

In such a situation$ hat need is there for the government to regulate (uality and %rices of

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education services? The situation ill inevitably lead to lo %rices$ better accessibility$ better

teaching methods$ and syllabi that are more relevant to the industry.