HEC's higher education plan far exceeds available fiscal resources: World Bank

The expenditure to be incurred by Higher Education Commission (HEC) on reforming higher education in the country under the Medium-Term Development Framework (MTDF) for 2005-2015 "exuberantly exceeds the available financial resources" and it is difficult to bridge the gap despite all measures proposed by the World Bank.
According to the assessment report of World Bank, the HEC projected programmes require Rs 1120 billion, whereas the estimated amount of Rs 570 billion for the proposed period of over ten years falls well short of target. There is no source in the pipeline to meet this huge cost-resource gap of Rs 550 billion, the report says.
In the report, experts have tried to reduce this financial gap through various techniques, taking into consideration the optimum approach, and have theoretically managed to bring it closer to the target. They have used techniques to minimise the cost and maximise the resources, bringing the gap to Rs 130 billion. This has given some hope to HEC to achieve its MTDF targets under Millennium Development Goals (MDGs).
In the report, the World Bank has recommended some rational measures, without affecting the quality of education. To reduce the cost it has carefully increased the student-faculty ratio from 19:1 to 25:1, increased the private enrolment share from 25 percent to 30 percent and, simultaneously, exercising change enrolment mix to increase intake in scientific and technological fields, which are more in demand and would attract more students. These reforms, if exercised properly, would bring the cost down from Rs 1120 billion to Rs 960 billion, quite optimistically.
Regarding resources, the report suggests that if the proposed budgetary target of the government sailed smoothly with respect to education from 1.8 percent to 4 percent of the GDP between 2006-15, the amount which is correlated with GDP growth of 6 percent per annum (as expected) would automatically add to the educational budget proportionally.
Secondly, it says, the university allocation is targeted at 21 percent, where it would be maintained and kept constant, but with the increasing GDP it would automatically keep on building up with the same proportion. These criteria would be able to generate revenue of Rs 680 billion for higher education, the report says.
The World Bank has very cautiously advised for an yearly increase of 5 percent in the tuition fee to further bridge the revenue and expenditure gap. This would compensate for another Rs 155 billion and would represent 23 percent of total resources and ten percent of universities' cost. However, keeping in view the financial problems at the end of the students, it has suggested to compensate students from lower socio-economic backgrounds with introducing supportive schemes, which should run parallel to revenue generation schemes to facilitate them.
For the remaining difference of Rs 130 billion, approximately, the report says many more options could be considered to bridge this gap between cost and revenue such as more intense involvement of the private sector, exploring schemes to match the universities' own resources with fiscal resources beside the option of foreign support, which could play a key role in reducing this gap.