Final Report Financing the Higher Education in Nepal Submitted to: South Asia Network of Economic Research Institutes (SANEI) Pakistan Institute of Development Economics Islamabad, Pakistan Submitted by: Centre for Economic Development and Administration (CEDA) Tribhuvan University Kirtipur, Kathmandu, Nepal E-mail: [email protected] Telephone: 00977-1-4331721 Fax: 00977-1-4331722 January, 2007 STUDY TEAM Dr. Durga Lal Shrestha : Team Leader Cum Economist Mr. Tritha Bahadur Manandhar: Education Expert Mr. Krishna Man Manandhar: Statistician Mrs. Shakila Singh: Research Associate Mr. Indra Kumar Shrestha: Research Associate Ms. Subhechchha Shrestha: Data Analyst / Computer Programmer Acknowledgement To meet increasing rate of demand for higher education six universities and two specialized institutions at the university level have already been established and four other universities including two additional regional universities are in the process of opening. The faster development of higher education needs a lot of funds. The state funded universities namely TU and NSU are acutely facing the problem of cost recovery with highly influenced by the political intervention. The cost recovery position of other universities is also not at the satisfactory level. In this situation, the government of least developed countries like Nepal alone cannot meet the financial needs for higher education at the cost of other sectors' development. Ultimately, the private sector has to finance the higher education. Besides, the present day demand is the social inclusion in higher education i.e., increasing access for women, dalits, indigenous and backward people to the higher education. That’s why; higher education has now been treated as both social as well as economic goods and both public and private partnership is required for financing the higher education. Furthermore, the study team is grateful to South Asia Network of Economic Research Institutes (SANEI), Pakistan Institute of Development Economics, Islamabad, Pakistan for entrusting us and financing this study. The study team is also grateful to Dr. Ramesh Chitrakar, Executive Director of Centre for Economic Development and Administration (CEDA) for providing us opportunity to be involved in this study. Mrs. Laxmi Singh, Mr. Nayan Lamichhane, Mrs. Chitrakar, Mrs. Nilu Shrestha, Mrs. Subarna Shreshta and other CEDA staff deserve appreciations for full administrative support to the study team. Finally, I would like to thank all members of the study team, without their painful and hard work the study cannot be completed in this form. Dr. Durga Lal Shrestha Team Leader cum Economist January 30, 2008 Contents 1. Introduction.................................................................................................................1 1.1. Background.................................................................................................................1 1.2. Statement of the problem............................................................................................3 1.3. Objectives of the study................................................................................................6 1.4. Methodology of the study ...........................................................................................7 2. Education System and Policy....................................................................................11 2.1. Global Context..........................................................................................................11 2.1.1. United Kingdom (UK) .....................................................................................11 2.1.2. United States of America (USA) .....................................................................12 2.1.3. Generalization on experience of UK and USA................................................14 2.2. South Asian Context .................................................................................................15 2.2.1. India .................................................................................................................15 2.2.2. Bangladesh.......................................................................................................17 2.2.3. Sri Lanka..........................................................................................................19 2.2.4. Pakistan............................................................................................................20 2.2.5. Generalizations about higher education trends in South Asia .........................21 2.3. Education System and Policy in Nepal.....................................................................22 2.3.1. Introduction......................................................................................................22 2.3.2. Problems in Primary and Secondary Education: .............................................22 2.3.3. Policy with respect to School Education .........................................................23 2.3.4. Education Policy in the Tenth Plan (2002-2007).............................................24 2.3.5. Education Policy under the Three Year Interim Plan (2007/08 to 2009/10) ...25 3. Higher Education System in Nepal...........................................................................29 3.1. Historical Development of Higher Education...........................................................29 3.2. The Higher Education System in Nepal....................................................................32 3.3. Brief Description of the Universities ........................................................................33 3.4. Trends in Higher Education......................................................................................39 3.5. Problems of Higher Education..................................................................................42 3.6. Policy Relating to Higher Education ........................................................................46 3.7. Implementation of the Reform Measures on Higher Education ...............................47 4. Universities and Manpower Supply..........................................................................49 4.1. Introduction...............................................................................................................49 4.2. Manpower Produced by Different Universities ........................................................49 4.3. General Comment on Types of Manpower...............................................................51 5. Government Financing of the Education Sector.......................................................52 5.1. Total Government Finance for the Education Sector ...............................................52 5.2. Allocation of the Government Expenditure on Education for Different Levels of Education ..................................................................................................................53 5.3. Sources of funds for the Education Sector................................................................53 5.4. UGC Allocations for different Universities in Budget for 2005/06 .........................55 5.5. Financing Policy of Higher Education......................................................................59 5.5.1. State Financing.................................................................................................59 5.5.2. Students' Financing..........................................................................................60 5.6. Financial Monitoring in Higher Education...............................................................61 5.6.1. Output/Performance Monitoring......................................................................61 5.6.2. Financial Monitoring .......................................................................................62 6. Financial Analysis of Different Universities ............................................................65 6.1. Tribhuvan University................................................................................................65 6.1.1. Annual Total Expenditure of Tribhuvan University and Its Institutes/Faculties 65 6.1.2. Financial Structure of TU and Institutes..........................................................67 6.1.3. Financial Structure of Campuses of Tribhuvan University .............................70 9.1.2.1. Education .................................................................................................70 9.1.2.1. Humanities and Social Sciences ..............................................................71 9.1.2.1. Law ..........................................................................................................72 9.1.2.1. Management.............................................................................................72 9.1.2.1. Science and Technologies........................................................................73 9.1.2.1. Central Departments of Tribhuvan University ........................................73 6.2. Nepal Sanskrit University.........................................................................................75 6.2.1. Financial Structure of Nepal Sanskrit University ............................................75 6.2.2. Financial Structure of Campuses of Nepal Sanskrit University by Development Region .......................................................................................................76 6.3. Eastern Regional University .....................................................................................78