With a 6% share of world income and the fourth rank in Purchasing Power Parity, one can safely conclude that
India has finally arrived. Over the last 50 years, the Government of India has provided full policy support and
substantial public funds to create one of the world’s largest systems of higher education. On the science and
technology side, India has churned out a large number of scientists, engineers and technicians who today rule
the roost in intellectual hubs like NASA and the Silicon Valley. There is no doubt that India is extremely rich in
intellectual capital that possesses a strong value system.
In the year 2000 the adult literacy
rate (% aged 15 or older) was 58.5 %
(72.3 % for males, 44.4 % for
females). These figures have all
nearly doubled since 1961 and are
higher than in most other South Asian
nations. Total government
expenditures on education in 2001
were Rs 841.8 billion (US$17.3
billion), which was 13.2 % of all
government expenditures and 4 % of
the Gross Domestic Product (GDP).
Since the 1950s, government
expenditures on education have
increased steadily, as have the
number of educational institutions from the primary to the university level
Over the years, with the increase in population and literacy, the number of educational institutes for higher
learning has also increased, but not sufficiently to meet the demand. The influx of private institutes has taken
place because the government was unable to meet the demands of the growing population and higher
education needs. This is a good sign since this will largely contribute to nation building. With the IT revolution
and technology development, changes are slowly taking place especially in the last five years. We also need
more private institutes, but of the right kind. Funds that are being allocated by the government to the
education sector will mainly go to the primary and secondary levels. This is a good move, as it will strengthen
primary education. In case of higher education, the government would like to leave the responsibility to the
private sector. Which is why deemed universities and autonomous universities are being set up.
The future belongs to India
There seems to be direct correlation between the increase in the number of colleges and universities (and thus
students) and the GDP of the country (refer Fig. 2). Logically, with the increase in the number of students the
number of educated and talented manpower entering the economy is also large and this leads to the
development of the nation.
In the next ten years, Indian universities will be in the same league as the top universities across the globe. In
order that this may be achieved, we will have to work on our technology and infrastructure. The focus must
therefore be on encouraging the committed private players. Also, educational institutions should strive to
create knowledge and should be allowed to adopt maverick approaches to raise funds.
Encourage the right private institutions to thrive and grow
In India, both public and private institutions operate simultaneously. In 2000-01, of the 13,072 higher education
institutions, 42 % were privately owned and catered to 37 % of students enrolled into Higher education, that is,
approximately 3.1 million out of total 8.4 million.
Education in public institutions is heavily subsidized due government funding. However, many of the public
institutions have not been able to maintain the high standards in education or keep pace with developments in
the fields especially in knowledge and technology. Over time, financial constraints with exploding enrolments,
and a very high demand from primary and secondary education has led to the deterioration in the financial
support provided by the government. On top of this, an overall structure of myriad controls with a rigid
bureaucracy has stifled its development. This has encouraged a large number of private players to set up
institutions.
The challenge here is to identify the committed institutes and eliminate the selfish black sheep. The right
kind of private institutes are the ones that are purely driven by the passion and commitment towards imparting
quality education. They strive to provide world-class infrastructure and facilities to the learners. The selfish
black sheep are the ones who are solely concerned with protecting their own interests. Encouraging the right
kind of private players could be a winning strategy since it can strengthen the DNA of the Indian education
system.
Maverick approaches to funding private education institutes –
The constraints on the government treasury to fund the huge infrastructure required to build the right kind of
learning ambience has led to an influx of private players into the education system. The setting up of deemed
universities and autonomous institutions is a clear evidence of this. However, in order that quality is
maintained it is important that these players have the winning combination of commitment and funding.
a) A professional cell for fund-raising
Institutes must look beyond establishing ‘chairs’ in the name of the corporate. The corporate world in the form
of alumni can do much more than just this. They can partner with the institute for the projects and actively
contribute funds to the cause they believe in. For this, the public and private institutions can set up a
professional cell for fund raising. An independent director whose sole responsibility would be fund-raising for
the institute must man this cell. This is an international concept prevalent in almost every university abroad.
The job responsibility of the Director-fund raising would be to establish strong linkages with the alumni,
ascertain the fund requirements of each department in the institute, create project reports for funding for
each section of the institute etc. Making project reports for each section and effort will help the corporates
identify the correct fit and also reassure the corporate that the funds are being deployed for the right use.
b) Full autonomy to private institutes
As mentioned previously, the right kind of private educational institutes must be encouraged. These institutes
fight their own challenges in the form of statutory fee fixation and administration norms. These challenges may
prove to be roadblocks to the development of the institute in the form of paucity of funds. As per the Supreme
Court judgement, the prerogative to fix fees and run a private un-aided institute must lie with the institute
itself. Further, the institute should be given the autonomy to fix fees that will include the cost of education
plus a reasonable surplus that will be used for the development of the institute. This judgement if
implemented will eliminate the need for fees through donation.
Either the private players must be given the autonomy of administration and fee fixation or they must be
allowed to adopt innovative models for funding their expenses.
c) Cross Subsidize education in private institutes
The private players can also look at options of cross subsidizing education as per the model
According to the above model, 15% of the students who couldnot make it to the merit, but have the financial
strength to subsidize the education of the economically challenged, meritorious students should be given an opportunity to do so and thus be given admission in return. The entire payment must be by cheque and thus
accounted for. In this way the entire money collected as donation will be deployed for the development of the
institute. Many universities in the US ensure admission of a candidate through a payment seat, whereby the
candidates name figures on the ‘endowment list’ as opposed to the ‘enrolment list’. Legalizing the cross
subsidy concept in India would mean reduction of corruption, increase in transparency and correct allocation of
public funds for development of education. This is just one of the models a private educational institute can
adopt successfully.
Focus on Knowledge Creation – in this lies the key to a brighter tomorrow
Gone are the days when educational institutes were started with the sole aim of knowledge dissemination. The
future belongs to educationists who believe in knowledge creation through high quality research and
development. For this the institutes will have a strong focus on providing world-class ambience and
infrastructure in which intellectual capital will thrive and bloom. India will thus be a knowledge hub where the
public funds will be used for teaching, coaching and learning. In this way the educational institution will
indulge in infinite value creation for the society.
It is now an accepted fact that India is going to become the next economic super power. But this cannot
happen overnight, it will require sustained efforts on the part of educationists to offer superior quality of
higher education so that the best talent is infused into the corporate world.
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