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Higher Education in India:

The Evolving Scenario

GRK Murty

Globalization helps realize the benefits of free trade, and thus comparative
advantage and the division of labor. It is also supposed to enhance efficiency and
productivity . It subtly leads to growing interdependence across the world on a
number of dimensions that are pretty divergent – growing integration of the
world’s economies; speedy connection with almost no barriers; a growing
connection between all the segments of society; and increase in the speed at
which ideas and the people move around the world. Amidst these ground
realities, India too embarked on transforming its regulated economy into an open
market economy. With the launching of reforms, we are getting more and more
integrated with the world economy. As Jagdish Bhagwati, (2002) observed, the
resultant ‘growth’ from the on-going reforms is supposed to create jobs that ‘pull
up’ the poor into gainful employment by providing more economic opportunities.
It provided the revenue with which the government can build more schools and
provide more health facilities for the poor. It offered incentives for the poor to
access these facilities and also for the advancement of progressive social agenda.

The prosperity and progress of an economy even in such an “enabling

environment” are largely dependent on the social norms and institutions of a
country. The citizens’ attitude towards work, their level of mutual trust, standards
of ethics and social norms form the foundation for economic activity and
prosperity of the society. It is only when individuals maximize their own selfish
utility that the resulting competitive equilibrium can become Pareto-optimality. In
this context, economists often advise that governments should help build human
capital since a substantial portion of growth in any economy has been attributed
to human capital accumulation and this is more so in a ‘knowledge economy’.
Thus, ‘Human Resources’ becomes the critical player. Knowledge Economy
demands ‘efficient’ work-force. And ‘efficiency’ alone can lead to ‘Growth’ in a
highly competitive market. The nation must therefore provide excellent
educational system to all. We need to assemble large pool of science and
technology personnel. A system supporting research on merit must be initiated
and encouraged. Organizations must have “outward orientation”. A knowledge
driven society is a must in knowledge economy.

Debates are going on about the extent to which societies should become global
and the degree to which they should modify their practices and policies to make
‘globalization’ work better for them. Amidst these upcoming demands for
‘homogeneity’ and ‘uniformity’ what is most baffling is that countries have also to
maintain a kind of ‘uniqueness’ about them to succeed in the global economy. As
Sztompka (1990) observed the emphasis is currently shifting to the alternative
types of comparative inquiry: “Seeking uniqueness among the uniformities, rather
than uniformity among variety” . And that ‘uniqueness’ has to be more in the
form of greater ‘competency’ than that in the rest of the globe at least in the
chosen field so that the country can enjoy ‘comparative advantage’ over others
that can ultimately differentiate its output from that of others and generate
market share. And that is where globalization is impacting our current educational
practices. If our educational system has to produce competent and employable
workforce that is easily differentiated from the rest in the global market, we need
to change our archaic laws.

Higher Education in India: Current Status

The early growth phase of higher education was associated with colonialism. Its
access was thus partial and its teaching and research programs were mostly
defined by colonial state policies. It is only after independence, that the state
promoted education as an instrument of social development. We indeed had a
very impressive growth since then: the number of university level institutions has
increased form 18 in 1947 to 307 by the end of 2004. The student enrolment has
also grown impressively from 2,28,804 in 1947 to 94,63,821 in 2002-03. Despite
such an impressive growth in infrastructure under higher education which is rated
to be the second largest after the USA in the world, it hardly covers 7 percent of
the population which is lower than even that of developing countries such as
Indonesia (11 percent), Brazil (12 percent), and Thailand (19 percent). There is yet
another distorting phenomenon under higher education: the discipline-wise
enrolment of students is not that encouraging with enrolments into science
stream standing at 19.7 as against 42.7 percent into arts faculty and 20.7 percent
into commerce including management (Source: UGC Annual Report 2000-01).

Higher education in qualitative terms is depicting a still agonizing scenario that

has been aptly captured by the Ramamurti committee report (1990): There are
serious complaints at all levels about the lack of responsiveness in the system.
Academic activities are at a low ebb and the academic calendar itself gets
seriously disrupted almost every year. The system of higher education continues
to encourage memorization of facts and regurgitation rather than creativity.
While the results in higher education are clearly determined by the foundation
laid in school education, we cannot wait for the ills of school education to be
remedied before bringing in meaningful improvements in higher education. We
cannot ignore the fact that we do not have many colleges today which can pride
themselves of imparting under graduate education of the higher quality,
comparable to some of the well known institutions in the world. The findings
under this report though old still holds good and for that matter the current
situation may be worse than what has been described in the report.
With the advent of reforms and the resulting concern for growing fiscal deficit,
the government is slowly withdrawing from funding higher education as could be
gauged from the fact that the outlay for student declined from Rs.7676/- at 93-94
price levels to Rs.5873/- in 2001-02 (budget estimates). With all these constraints,
we are still continuing with the system of affiliation which was started in 1857.
Indeed we made the affiliation system more complex by allowing infinite number
of colleges to be affiliated to a single university. With the result, the already
depleted financial resources are used more for administrative purposes than for
improving academic resources. The net result of all this is overall fall in academic
standards. The current plight of our university system which is entrusted with the
responsibility of disseminating higher education has been well described by Andre
Beteille: our universities are simply functioning as a degree giving institution
concentrating on conducting examinations rather than becoming a system that
transmits, generates and interprets knowledge.

Need for Private Participation in Higher Education

The World Bank report of 1994 highlights the worth of higher education wherein
it is considered that institutes of higher learning benefit state and society in
several ways: they equip individuals with advanced knowledge and skills to
discharge responsibility in government, business and professions; produce new
knowledge through research and at least serve as conduit for the transfer,
adaptation and dissemination of knowledge generated elsewhere in the world.
The task force constituted by World Bank and UNESCO during 2000 has also
observed that higher education helps increase wages and productivity that
directly enrich individuals and society. As against these world opinions, the
ministry of finance opined in its paper on government subsidies (1997) that higher
education is a ‘non-merit’ good based on the reasoning that higher education
benefited individuals more than the society. The Birla Ambani report submitted to
the Prime Minister too suggested that government subsidies to higher education
should be minimal and the funds thus saved should be invested in expanding
facilities at the primary and secondary stages of education.

According to the census of 2001, the overall literacy rate in the country has gone
up by 10 percent during the last 10 years. It is therefore possible that around 8 to
10 percent of this freshly educated lot would seek admission at college level in
the next 8 to 10 years. As against the current capacity of 8 million college seats
created in the last 150 years, we would be required to create an additional
capacity of 8 to 10 million college seats in the coming 8 to 10 years. Obviously this
is a gigantic task that can not be addressed by government alone.

In the light of these facts, there is an urgent need for opening higher education
for private participation. The autonomous setup of universities in the US, that are
surviving on private income such as fees, donations and investments, is an
example how private investment can be channellized into higher education.
Majority of these American universities are said to be purely driven by hunt for
the best talent in the strictest sense of autonomy. As against this our university
system is known for micromanagement by the government to the extent of
defining admissions based on caste, gender, etc. The impact of these differences
in the two systems is quite visible: The American private universities like Harvard,
Stanford, New York, Columbia, Princeton, Yale, Duke, MIT, etc., are well known
worldwide for their excellence in education, while except for a handful institutes
like IITs and IIMs we have very few such institutes to boast of.

There is another strong argument in favor of private participation in higher

education: user payments improve quality of education. When students pay
directly, they tend to become actively involved to ensure that they receive
benefits in return. Secondly, the monitoring by parents that is supposed to
accompany user payments can improve both the quality and cost effectiveness of
education. There is thus a strong argument favoring establishment of private
universities for imparting higher education which is a must in the globalized
economy to reap economic benefits by leveraging on comparative advantage. It is
however heartening to note that some states such as Chhattisgarh, Uttaranchal,
Tripura, Sikkim, etc., have already passed private universities bills and other states
like Rajasthan, Himachal Pradesh, Punjab, etc., are reported to be in the process
of coming up with legislations for establishment of private universities.

Private Universities and Quality Assurance

There is a doubt in the minds of certain segments in academia that in private

universities, which are likely to be setup by corporates or private trusts, etc.,
which are known to seek maximum returns on their investments, the quality of
education may become a casualty, defeating the very purpose for which private
participation being encouraged. This line of argument sounds hallow since no
institute can survive for a long on poor quality product and education is no
exception to this universal truth. Here it is worth recalling institutions such as
Gokhale Institute of Politics and Economics that were setup by private trusts
during late 30s and 40s are known for their values and concern for quality

There is no valid reason to doubt the credentials of institutes promoted/to be

promoted by private entrepreneurs. Even otherwise the state can and should
always ensure that the private universities once established, comply with the
basic quality standards prescribed by it from time to time. All that is required to
ensure quality across the board is to have a national level overseeing body that is
teethed with powers to grant permission to establish a university and to
derecognize an already established university if it fails to maintain the prescribed
standards. Incidentally, the current plight of university system in our country is
primarily attributed to the fact of removing the provisions originally contemplated
in the UGC Act namely the necessity to obtain prior approval from UGC for
establishing a university and depriving the authority of UGC to derecognize any
degree awarded by a university.

It is essential that the functioning of such a central authority is transparent and its
decisions are not arbitrary. To ensure such transparent governance the authority
should prescribe its parameters for granting permission to establish a university.
Similarly, it should also make it known to the participating agencies as to on what
lines the performance of a university is assessed to declare it as eligible for it
continuation or not. There is also a case to reexamine the role of professional
counsels such as MCI, AICTE, etc., that have been established in the recent past to
oversee the functioning of medical and engineering institutes etc. These bodies
that have evolved their own rules for imparting higher education including
prescribing the necessary infrastructure etc., were at times found to function at
crossroads with UGC. This has only created disputes resulting in innumerable
court cases. Even otherwise, too many regulators are known to create more
problems than solve them. Taking a cue from the experiences it is time that we
had one central body to oversee the functioning of universities – both in public
and private management and evaluate them on prescribed quality parameters to
ensure excellence in education.

Academic Freedom to Universities

Globalization is changing the structure of higher education radically by moving the

services across the boundaries, instead of the movement of people across the
borders as witnessed earlier. Such migration of education from its location to new
locations in search of clients is necessitating institutions of higher education in
India to reorganize themselves to withstand the competition from the developed
countries. Secondly, there is a need to appreciate the shift in demand for applied
education particularly towards IT, Bio-informatics, Nanotechnology, etc., in our
country, where we have already proved our competency, and grant academic
freedom to the universities to design new courses, structure their own curriculum
and offer market driven programs. If our youth has to acquire and enjoy a unique
competitive advantage in the global market, we should not cripple the
universities - be they private or public, with bureaucratic procedures. They must
be allowed to capitalize on the market opportunities by granting such academic
freedom that is essential if these institutes have to produce ‘employable’
graduates from time to time. In the world of internet and knowledge economy
what counts for success is agility in adapting to evolving changes. As the private
universities, which are to purely survive on fee income have to necessarily re-
equip themselves with newer programs from time to time, real academic
autonomy becomes an essential prerequisite. It is time we realized that market is
a good regulator at least of such private bodies which have to prove their merit
constantly for ensuring continuous fee income and hence they should not be
burdened with any regulation that stifles their academic freedom and
competency to deliver market-demanded skills.

Collaboration between Private and Public Universities

In the larger interest of nurturing competency in the country as a whole there is a

need to foster collaboration between public and private universities. By virtue of
their existence since long, universities under government setup, public
universities are known to have built-up research capabilities, a huge body of
knowledge and excellent academic resources in various disciplines which need to
be shared with the private universities. Similarly, the private universities that are
coming up with no baggage and establishing state of the art laboratories etc must
share their facilities with public universities. Such collaboration between these
two categories of establishments enables the nation to enjoy the best of the both
for building unique competitive advantage for the prospective students emerging
from the portals.

The public universities, at least some of the well known centers have excellent
laboratory and library facilities. It is also true that the private universities may not
be able to establish such excellent research facilities for carrying out fundamental
research ab initio. At the same time these private universities may not hesitate to
incur heavy cost on hiring highly qualified professionals as faculty. In such a
situation, it is in the pursuit of national interest, public universities can as well
think of sharing their laboratory and library facilities with the existing/prospective
private universities, possibly at a nominal fee. Similarly, the services of eminent
professors available with the public universities can also be made available for
guiding research scholars of the private universities.

As a part of their business strategy, private universities will obviously develop

excellent laboratory and library facilities in the niche areas that they have chosen
to capitalize for the common good of themselves and their students. Such of
those teaching facilities created by the private universities in the latest fields of
study such as IT, Bioinformatics, etc., can be shared with public universities. It is
only such collaborative competition between these two segments of higher
education that can really lead the country forward by delivering such an
education which differentiates its students from the rest in the global market.

Institutional Support for Funding Pursuit of Higher Education

It is obvious that private universities, unlike public universities would be

recovering their cost by charging fee from students proportionate to their
expenses. Such fee structure may not always be with in the reach of common
man. A need thus arises to fund such candidates. It is to be noted here that if
Harvard or Stanford or MIT are being fed by a continuous stream of students and
they are able to maintain such reputation for excellence in education, it is only
because there is an institutionalized support available to the students to borrow
money, pursue studies and pay it back from their future earnings with no hassles
attached. Although, the Indian banking system grants loans for higher education,
it is not as formalized, institutionalized and simplified as in the US. There is thus a
need to urgently streamline and make loaning system student-friendly. Such
formalization of loaning system, obviously, provides private universities their due
share of student enrolment and encourages them to make their institutes
stronger and academically competitive. More than anything else, it sustains the
growth rate making available a large pool of highly skilled workforce to the