July 22, 2015 ☼ economic reasoning ☼ Economy ☼ education ☼ externalities ☼ film industry ☼ India ☼ liberal nationalism ☼ Provocations ☼ subsidies
This is an archived blog post from The Acorn.
One of the numerous controversies surrounding the Modi government’s appointments in the education sector revolves around a minor television actor being appointed the chairman of a government-run institute on the basis of his party, and perhaps ideological, affiliation. Students, alumni and many public commentators have opposed the appointment of Gajendra Chauhan on account of his weak acting credentials and lack of stature in the industry.
Mr Chauhan’s critics might be right. His defence — that he is being judged ahead of his performance — can also be taken at face value, not least in a country where “officially certified” graduates are unemployable, and great actors and film-makers need not necessarily be good administrators.It is not as if having great personalities running the film institute has prevented the Indian film industry from distinguishing itself through sheer mediocrity. Mr Chauhan does deserve a chance.
The Film and Television Institute of India is a government run institution. The elected government has the prerogative to appoint whoever it likes. If students and faculty do not like it, they can voice their protests, which the government ought to listen to. But if the government does not, or does not accept the criticism, then that should be the end of the matter. Students and faculty who cannot accept Mr Chauhan’s leadership can decide to quit. Whatever your politics, this is the right conduct in a republic. With apologies to John Roberts, the Chief Justice of the US Supreme Court, it is not the purpose of democracy to protect the people from the consequences of their electoral decisions.
However, the bigger issue is why is the Union government running a film institute and training actors and filmmakers with public funds? The economic argument is that the government can subsidise education that has large externalities, if there is an undersupply of such education. In other words, the reason to subsidise medical education (whether or not through government medical colleges) is that a doctor benefits society even when making money for herself. If there are too few doctors, there is a case for subsidising medical education. If there are too many of them, it doesn’t.
So do actors and filmmakers have large positive externalities? To the extent that entertainment is necessary for the well being of individuals and society, then it is possible to make a case that filmmaking ought to be supported with public funds. But are there too few actors? Are there insufficient incentives for the private sector to invest in filmmaking institutes? You could argue that a few decades ago, there was a need for government to subsidise Indian actors and filmmaking. It is difficult to argue that is the case today: the film industry was worth over $2 billion last year and almost produces more films than the United States, China and Japan (the next three biggest producers) combined. There are too many films. There are too many television channels. There is an oversupply of films, television programmes, actors and filmmakers. It makes no sense to subsidise film-making in this situation. Privatising the Film and Television Institute of India is a good idea, especially if it can use the autonomy to improve industry standards.
In a twitter conversation, a fimmaker retorted saying if government can run IITs and IIMs, then why not FTII? The answer really is that just like FTII, the government should get out of running IITs and IIMs too. Where there is need for government is in the running of 665 universities where around 30 million students are enrolled. All the IITs and IIMs together account for a mere 15000 students. The poorest student who secures admission to IITs or IIMs is likely to secure grants, scholarships or loans to pay her fees. On the other hand, the pure sciences, social sciences and arts need greater public funding because of the dismal state these disciplines are in. Universities represent education in its broadest sense, and has the broadest externalities — an educated population is in the public interest.
The debate on a few elite institutions is misplaced. The government ought to get out of running film, engineering, management and law institutes. There is no case for pouring scarce public funds in areas where there is a glut and where there are enough incentives for private provision.
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