Public sector universities in Pakistan are on the brink of a financial precipice, a perilous situation that threatens both administrative and academic functions. Prominent institutions are grappling with severe financial crises, having operated with deficit budgets in the past year. Current budget projections indicate a deepening deficit, exacerbating the challenges faced by these universities.

The ramifications of this financial strain are evident in the failure of several institutions to honor salary increases outlined in the FY 2023-24 budget. Timely salary payments have become a luxury for some, while others have resorted to a temporary suspension of additional allowances. The inability to provide post-retirement benefits to employees due to financial constraints paints a grim picture of the crisis at hand.

While culpability can be attributed to various factors, the pressing concern is the absence of a clear financing strategy for higher education in Pakistan. The landscape has become fiercely competitive with the rise of private universities and a surge in local student registrations for foreign university programs. Declining public sector spending on higher education further complicates matters, leaving these institutions struggling to chart a sustainable financial course for large-scale universities.

The question of whether students should bear the cost and its implications on enrollment looms large. Why should students enroll in universities offering subpar infrastructure at exorbitant prices? The Higher Education Commission (HEC) and universities grapple with determining the actual cost of educating a student across different departments. For instance, the cost of a student in a science program versus a social science discipline remains unclear. Without calculating the per unit cost, understanding the actual subsidy amount and identifying who is subsidizing this cost becomes elusive. Is it a public sector subsidy favoring extensive programs, or are students in cost-effective programs inadvertently cross-subsidizing those in cost-intensive programs?

Currently, universities find themselves ensnared in a deficit financing model, enrolling more students to address immediate cash flow needs through fee payments. However, this short-term strategy results in disproportionate spending on these students, as many programs fail to generate sufficient revenue to cover their full costs.

The Higher Education Commission must urgently refocus its efforts on the financial management of universities. This entails developing cutting-edge financial management and planning tools. Many university finance managers lack the training to address financial matters comprehensively, including resource mobilization. As quality and compliance requirements become more expensive, immediate action is imperative to avert a deeper crisis.

In conclusion, the financial collapse of public sector universities demands immediate attention. The HEC must lead the charge in implementing financial management reforms, equipping universities with the tools and expertise needed to navigate these turbulent waters. Failure to act urgently jeopardizes the quality of higher education and the long-term viability of these institutions.

Related: Reforming Legal Education in Pakistan: A Call for Parity and Practicality

The writer, Prof Dr Aziz ur Rehman, is Director School of Law, Quaid-i-Azam University (QAU) Islamabad and can be reached at the following E-mail: aziz.rehman@qau.edu.pk

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