India Inc India Inc: Tuesday, 13 November 2012 15:50

The Balance Sheet with Pratik Dattani - India’s higher education challenges

India’s higher education challenges

Indian minister Kapil Sibal estimated recently that India needs 1,500 universities, almost three times as much as the current 564, to serve its young and aspiring population, and meet expectations for economic growth.

This oft-quoted but unofficial observation reflects the scale of ambition of the Indian policy-makers, and the direct connection they make between higher education and economic growth. Consequently, India is the only major economy in the world where the government is still spending money on setting up new higher education institutions, and building up capacity in the old ones. This effort will get a further boost by the recent appearance of three of the IITs – Kharagpur (226-250), Bombay (251-275) and Roorkee (351-400) – in the Times Global 400 league table; though none of them made it to the top 200 yet.

Some effects of this additional investment, as well as the government’s enthusiasm on getting the private sector involved in higher education, is visible in the rapid expansion of higher education provision in India. The number of colleges, mostly within the private sector, has grown by 150 per cent, reaching a total number of 33,000.

The student numbers have expanded too, though this has been at a slower rate than the expansion of school capacity. The most intriguing aspect of the statistics is that despite the student growth, the gross enrolment ratio (GER) – the number of people moving into tertiary education after leaving school – remains stubbornly below 20 per cent. This is partly because of the rapid expansion of literacy, as observed in the current census, and the expansion of school level education.

However, it is also important to note that some of India’s new higher education institutions are starting to struggle, if the number of empty seats in engineering and MBA colleges is any guide. It seems that while investment has poured in and seat capacity has been expanded, students are not interested in what the university has to offer and as a result overall student numbers in higher education, while growing, aren’t going up proportionately.

This observation gains further force if we look at this issue from the perspective of demography. For plain demographic reasons, there would be 5 million more students in college by 2015 than there are now, representing a growth of 25 per cent. Also, the gross enrolment ratio below 20 per cent is significantly lower than that of comparable countries, for example China. By historical precedent, a country’s GER tends to grow alongside its income, levelling off somewhat as it approaches the 40 per cent level. It requires a somewhat bigger leap in income thereafter for the GER to grow again. The Indian model, therefore, represents an anomaly. The student numbers have grown, but this can be solely attributed to demography and growth in income.

Once we have considered the impact of these two factors, there is little to show for all the extra money that the government is spending, and for the huge expansion of capacity in the private sector. In fact, it seems there is an apparent supply glut in the private sector, and unused infrastructure is common. Colleges are up for sale, and this trend is likely to accelerate in the coming days.

Clearly, the current model of higher education expansion is somewhat out of sync with the level of demand from students. And after the next election, Indian politicians are likely to refocus their attention towards boosting economic growth and employment. This is a good time, therefore, to reflect where the model is going wrong and what could be improved.

Since countries like India often model their higher education systems after the United States, we may come up with valuable insights by looking at the American trajectory. A parallel can be drawn between India’s current situation and the US in 1940, when high-school enrolment jumped to 73 per cent of the school age population, while the college-going population stood at only 16 per cent of those who completed high-school – somewhat at the level India is today.

The wartime American government wanted an expansion of the system, as they planned for the returning personnel after World War II. After the distasteful treatment of Great War veterans led to a stand-off with American troops in Washington DC in 1932, finding gainful employment for these young men became an imperative. The resultant Serviceman’s Readjustment Act of 1944, popularly dubbed as GI Bill, was the biggest act of mass expansion of higher education in human history: It enabled 7.8 million returning veterans to attend college by the end of the validity of the act in 1956.

The Indian government should feel similarly besieged, and scared, by the rapidly growing young population of the country, and the fact that a march on Delhi is no longer an unthinkable prospect, but a realistic possibility. If, at this stage, the government is wondering why public investment and private initiatives are not increasing participation in higher education, they need to look closely at the American experience of this expansion: Faced with the expansion of the student population, President Truman appointed a Presidential Commission, which came back with the recommendation for an expansion of two-year colleges, which they called Community Colleges.

This rapidly expanding part of the American higher education system absorbed the increased demand, served the growth of the knowledge economy and drove up the GER; but, indeed, in the glitz and glamour of the American research universities, few around the world are aware of this part of the story.

New-millennium India isn’t similar to post-war America and India’s policies are likely to be different. But there is an important lesson to be learned from the American model that can be applied to Indian higher education’s current malady: The current growth is misdirected and top-heavy, which is neither addressing the issue of quality nor quantity. Public investment is primarily going to the creation of more high prestige national institutions, while private investment is directed towards the creation of provisions in engineering and post-graduate provisions in business, leaving the large swathes of general education colleges to face disinvestment and neglect.

Despite the success of India’s IGNOU, which has grown into the largest open university in the world with more than 3.5 million students, and various other open university systems across the country, the Indian government has treated these as below par offerings and wasted a great opportunity to expand higher education provision. India’s expansion of higher education has been directed at a sliver of its expanding middle class, and has failed to take into account its rapidly changing nature and composition.

There are a number of things which need to be done to create a Higher Education model that may work for India. As a starting point, the regulatory system should be overhauled to make the sector more appealing to private investors (and even allow for-profits, which is needed to expand capacity). But regulation at the same time also needs to be made more robust, more focused on the student experience and educational outcomes and less on buildings and infrastructure. As it stands today, legislation bars educational providers from making a profit – this politically motivated law must be replaced, so that educational provision can be redesigned with a positive student experience taking centre stage.

Public investment should be directed towards both the top and the bottom, thereby supporting excellence in research and teaching in select national institutions, which is already happening, but also to support those colleges which directly serve the new demand. In the last few years, the government has spent millions to create a vocational education system, but the money seems to have been mostly squandered. So far, there is little to show for the vast sums invested, except for the pockets of the foreign advisors and providers it has lined. One may wonder why the government embarked on creating a parallel system when the public institutions, ITIs and local colleges are starved of investment.

Besides, the government’s quest to create a vocational education system, mostly following the British model, is probably already antiquated – a rapidly rising middle class is unlikely to favour a two-tier system of higher and lower education. The government must bring its investment in vocational competence in line with the need to rejuvenate the public institutions and local colleges, as these are the institutions best placed to reach out to the local population in need.

Lastly, the government must support private enterprise. As is common, the Indian government has so far limited private sector forays into education and kept for-profits out altogether – absurd, considering that some of the best educational work in India was carried out by for-profit companies like NIIT, Aptech and Educomp. Yet at the same time, the government has also handed out subsidies and contracts to a few favoured providers to create a parallel system of vocational education, which has proved to be mostly wasteful.

Market-based solutions work perfectly for an aspiring middle class and the government should withdraw its subsidies and allow private for-profit universities to form in India, which will greatly expand high quality provision and establish a cost-to-outcome link resulting from such market-led institutions. Setting this into practice, however, will indeed prove difficult, as vested interests from both the political and business sectors would want to keep the status quo for as long as they can. However, with the pending collapse the Indian higher education model seems to be heading for, there may not be much time left.

India’s higher education challengesAn Education Technology enthusiast and founder-director of U-Aspire, Supriyo Chaudhri has worked with some of the world-leading companies in the sector.


Pratik Dattani is managing director of the EPG Group –– a London-based economic and strategy consulting firm that specialises in social investment analysis.

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