At the outset readers will think that other than organised farming and technical equipment used in agriculture there is no similarity between the two technical degrees and agriculture. However the Indian Banks Association (IBA) data on Non-Performing Assets (NPA) throws another surprise when the data was shared by the finance ministry in the Parliament on 22nd December, 2017- NPA’s or bad debt, had gone up from Rs 3,536 crore at the end of March 2015 to Rs 5,192 crore on March 31, 2017. This is an increase by 47% between these two years. Are these engineers and MBAs looking out for loan waiver scheme on the lines given to agriculture sector by Indian states like Maharashtra and Uttar Pradesh? Hope not.
Defaults can be due to two reasons –
- Willful defaults
- Defaults due to unemployment or underemployment.
Willful Defaults
Due to lack of guarantee clause for procuring education loans, willful defaulters opt to stop repaying these loans even after procuring high paying jobs. The banks then have to resort to tracking them and making them to pay. CIBIL will surely be of rescue to the future lenders. But the current lenders have a tough time getting their loan repaid.
Other Defaults
Since the exact bifurcation of the existing NPA’s is not available between willful defaults and others, it is tough to do future analysis. However if recent information can be taken as a base, then the defaults under the ‘Others’ category is expected to control sizeable portion of the above NPA numbers. In this case the Indian government has many reasons to worry. In 2015, 23 lakhs applied for 368 peon posts in Uttar Pradesh! To add to the woes some applicants were holding technical degrees including engineering degree!! Do we add more?
Causes of other defaults
- Unemployment
- Underemployment
- Outdated education standards
The first two causes of other defaults is directly related to the third cause – ‘Outdated’. In this fast paced life, the only thing that is constant that is ‘change’. However what is seen that the technical institutes are eager to increase their profits by charging astronomical fees and capitation fees with slightest regards to education itself. Secondly our education system right from the word go disregards interest of each student. Result is beautifully captured in the below cartoon:
NPowersU Expert Opinion
The purpose and benefit of loans for higher education to students cannot be discounted. In a developing country like India where skilled man power is scarce but the potential, seeing the huge youth force, is bright education is the useful bridge between unemployment and employment. However loans single handedly cannot serve the purpose but it has to be effectively backed up by continuous change in ways and means of education itself so that the future generation are able to stand apart globally when compared counterparts from other countries. If this is not done, reverse brain drain will happen due to other reasons and not due to ‘Make in India’.
Related Links: