Economics for Idiots

Till the time I passed out from my CBSE affiliated school, Economics was taught as a compulsory course for two years. But looks like in the good old days this was not the case. I am discounting the fact that either none of the policy makes of CBSE had ever studied in CBSE affiliated schools or they never took their economics class seriously, and am hoping that this is not a blunder. But the fact remains that the recent CBSE directive that requires all CBSE affiliated schools to provide free education to a single girl child and equivalent concessions to multiple girls without any provision of compensation to the schools does not make any economic sense. Moreover, it is all set to hurt most whom it was meant to help, that is single girls.

While the schools have already formed a group and filed petition seeking to quash this order, it will be interesting to note the implications of this order, if it gets implemented.

The first option that many schools are contemplating is to switch either to ICSE or some other board. I believe that only those schools will opt for it for whose students fees is a major concern and a marginal increase in fees would mean changing schools or dropping off, i.e. loss of business (as after all, establishing schools is also an example of entrepreneurship and money matters). This is because such a switch would be a blow to school's reputation and credibility.

Let us now have a look into the schools that will stay with CBSE and implement its directive. Let's first get rid of the trivial case of boys' schools that will continue to function as usual. Now let's consider the case of co-educational schools. These schools will definitely conclude that in order to retain its students, they will have to keep a higher percentage of risk-free students, namely boys. They would also have to counter the psychology of boys' parents that making them studying in co-ed school will be costlier as compared to an equivalent boys school (considering that the cost of education is proportional to the quality of the education in the absence of such economic incentives/disincentives). So the co-ed schools will have to do more than enough to tackle this problem. Hopefully for them, the plight of girls' schools will offer them a way out. This will become clear after we take a look into the economics of running a girls school.

The girl's school will unarguably be the hardest hit. It will be highly foolish to think that the schools will try to absorb the deficit owing to their already premium fee structure, as some sections of the society feel. Even a simple hand calculation shows that the cost per student will show super linear growth and for moderately high percentage of single girls, it is a rectangular hyperbola. For example if in a girl's school (urban), there are 35% equivalent single girls studying, it will translate to a 54% increase in fees that will have to be paid by the rest of the students. From a girl's parent point of view (those who will not benefit from this scheme), the economic implications would be drastic and they would be forced to admit their wards in co-ed schools, which will openly embrace them owing to their own economic considerations. The reluctance of such parents to allow their children to continue in girl's school would mean the problem of girl's school compounding as the quality schools will be flooded with admission applications from girl's parents cutting across economic spectrum.

In plain English, girl's school will have an economic disincentive to admit or to continue with single girl students. One doesn't have to be an expert in Economics to conclude that if an incentive exists, it will be exploited. Consequently girl's schools will device ways to keep off single girl child students. On the admission front they would be discriminated heavily against. The most effective way would be to introduce interview basis of selection, as the decision on the basis of written tests can always be challenged owing to the deterministic nature of written tests. Even those students already inside the school will face discrimination, enough to force them out or provide some 'defense'.

Imagine you are a father of a single girl child and are seeing your child being discriminated against. Naturally you would want to provide some protection for your child. This logically would be an undertaking that you will not claim the aforementioned benefit from the school if your child is admitted/allowed to continue in the school. Definitely this will be implied not explicitly asked for by the schools, as doing it openly would invite prosecution on the basis of discrimination. The schools will also not forget to add a little milk to the coffee so that it doesn't get too dark. The schools, of course are not idiots and don't even need an article like this to implement such decisions.

Let us now talk about the lower economic strata of society for whom this directive is originally meant to address. Most of such girls study in government schools, which will definitely not discriminate against them. But in such societies, the proportion of single girls is nominal. Even most of the single girls are so by chance as their parents get prepared to welcome another child in their family. Incidentally having another child won't affect them. If the next child were a girl, they would still get an equivalent of one girl's education fees waiver. On the other hand, if 'fortunately' it is a boy, it will not be reported to schools. Even if the school authorities find it out, which teacher or principal (whose priority is education of the masses) will cancel such waiver knowing that the parents are already burdened by the expenses of another child and an additional burden of a girl's fees may result in her dropping out. So in most of the cases, they will also remain mum. In reality, all this economics won't even reach out to the rural population for whom, an additional child means an additional working hand. Education unfortunately has a trickling down effect, not a trickling up effect. Whom does this directive propose to benefit is unclear, as it is clearly against single girl child. Boys on the other hand have nothing to loose if they keep safe distance from single girls (i.e. join boy's schools).

The IIT Dream

A couple of weeks back, Prof. Gautam Sinha (Training and Placement-In-charge of IIT Kharagpur) held a meeting with the students to discuss the changes in the the Training and Placement schedule commencing this year. As major changes have been introduced, he wanted to take the students in confidence by meeting them in person.

Here's the jist of the change...Starting this year, the training and placement process of all IITs will begin in December.

Definitely, if there's smoke there had to be a fire. So what was the collective 'fire' in all the IITs that resulted in this collective decision? The answer is obvious to the insiders, but hardly guessable to any outsider.

It was observed that IIT students (regardless of the IIT they study in) have been making the T&P process an excuse to miss classes. Regulations allow students to miss classes provided the timing of the Test/GD/Interview of any company clashed with the lecture hours. But it was observed that many a times the students start skipping classes even a day before the event, and missing all classes on the day in question is considered a birth-right. If the students were really serious, there would have been no problem, but the truth is that the students hardly utilized this time to prepare. What most of them do is spend the time on their computers, looking for new movies to watch, or just spend it playing LAN games.

And this wasn't difficult for the T&P section to find it out. With a majority of students flunking the tests, one doesn't need a sixth sense to guess. There is one very famous incident about the student's attitude that many of us know. It so happened that Tata Motors came for an interview last year for jobs, and majority of the students (including the department topper) flunked scoring less than a score (20) per cent. And what more, the guy in question argued that its not possible for him to get so bad marks and challenged the integrity of the Tata Motors selection panel. What happened next brought shame to all of us. Tata Motors sent back his copy to show that his answer-script has been graded according to the established norms and standards. What more, they pulled up the T&P section for having such mediocre and arrogant students, and claimed that the same question paper in other colleges like Jadhavpur had plenty of students scoring well above 80. The reprimanding trickled down the level and our Head of Department scolded us for being similar to him.

And this was another issue that Prof. Gautam Sinha discussed with us in the meeting. He told us how the times are changing and the IIT stamp is losing ground to the NITs faster than expected. He told is how the other colleges have started scoring better than IIT Kharagpur in the placements.

Companies are fast realizing that the IIT stamp is fame and no longer valuable as it used to be. Many companies have even started to avoid coming to IITs as they believe that IIT students are usually aloof, don't work hard enough, expect higher salaries and leave companies early. Even those who come to the IIT campuses have felt that the IITians are no longer the material they used to be.

But what has changed over the last few years that has spelt doom on the IIT dream? Here's the things that have changed.

IITs have emerged like a brand, brought popularity by the strong alumni, and over-hyped by the media. But IITs are not soap-making factories that can churn out good soaps given the quality of the raw material remains the same. The IITs have been based on discipline that has been inculcated in successive batches given the competition they faced from their peers. Getting into the IITs was tough and then competing with the 'chosen few' made the IITians strong as a rock when they went on to face the world. All the IITs strived to keep themselves out of politics and set aspirations for higher standards. This created the IIT brand as we know it and the recruiting organizations knew they would get the gold if they came to recruitment here. But what the media did was a doomsday spell. It created an atmosphere that made people feel that cracking the JEE was the final frontier, and failed to account for the IIT system and the real value addition. This had a very bad effect. People who aspired for IIT felt that once inside, the IIT will take the trouble of giving them good jobs regardless of whether they are serious or not. And this was apparent from my very first year in IIT Kharagpur and the same experience continues till date. And it has been this attitude that has spelled doom. As years pass by, more and more companies are realizing that judging a batch based on its predecessor is getting more and more illogical.

Even the assumption that the raw material is the same is no longer valid. With centres like Bansal's that make the student mug their way into the IIT, the proportion of mediocre students in the IITs is increasing.

Another major change that the IIT system has seen is the introduction of free internet facility for the students. While originally meant for education, it is hardly used for what it was originally established. This started some four years back in most of the IITs, and the result is obvious. Instead of reading in libraries and playing outdoors (read:enhancing their personality), people glue onto their computers and do all sorts of activities, even bringing their IIT into the news for the wrong reasons. And today, the LAN of IIT Kharagpur boasts of 10 TeraBytes of data, most of which is pirated softwares/videos obtained from the net.

A person who joins an XYZ college knows that the world is tough. And throughout his education, he is reminded that if he has to survive, he will have to improve himself. Its a different story about those who don't have any inclination to succeed, but those who want good, do good. And at the end when they emerge out of the college, they are prepared to handle the world. An IITian on the other hand, feels that he already has success stamped on his back and need not stress himself any further. In the IITs, there are many people who want good results but refuse to stress it out. And the trouble is, this tribe is fast increasing.

Then how come we still have IITians among the successful in business world and even in IIMs, etc. The reason is similar to the gambler's world. Only those who make it big make the news. Only the alumni who are successful will come back to his alma mater with a head held high, giving us the false impression that all IITians are successful.

So is it the end of the story? The end of hope for all those who pursue IIT as a brand? Thankfully, the answer is "No". And there are enough reasons for this.

Ironically, it will be the media again who will bring back the glory to the IITs. And this process has already started. One regularly gets to see news that a certain college student has achieved something big and then the newspaper claim "and he isn't an IITian!". The stories of NITs and other colleges doing well will also find welcome approval with the media as this is "News". Slowly the horror of these details will trickle into the minds of the IITians and they will stop seeing themselves as special. The technologies that made the IITs elite (like the internet) will reach these colleges pretty soon and establish a level playing field. And this will happen before a student freshly out of school starts to choose an NIT over an IIT giving the IITs an edge with a better raw material. Amen.