India’s higher education sector is today, and has been for quite some time, at the proverbial crossroads where opportunities and challenges abound. Despite the popular belief that India has an unlimited reserve of skilled and semi-skilled human resources, there exist critical skills shortages in many sectors. There is also an unmet demand for quality higher education provision, evidenced by the increasing number of students that go abroad for their education, primarily to the industrial West.
According to the 2008  Shanghai Jiaoting Academic Ranking of World Universities , just two Indian universities are included among the world’s top-500 research institutions (Indian Institute of Science  and the Indian Institute of Technology – Kharagpur ). Both institutions rank between 300 and 400 on the list, and also make up the only two institutions on the top-100 list for the Asia-Pacific region. While the other closely monitored ranking of world universities – the Times Higher Education Supplement’s World University Rankings  – is more favorable toward Indian institutions of higher education. However, of the nine institutions ranked in the top 500, the highest ranked Indian university (Delhi ) is still in the bottom half of the list (254th).
Flexibility and cooperation have to be the hallmarks of Indian higher education if it is to compete with educational provision and research being offered and conducted at top institutions across the world. Adoption of emerging technologies, effective fund raising, allocation and deployment of funds backed by the right governmental policy frameworks must combine with new teaching standards designed to equip students with the skills and attributes required by the labor markets. Faculty shortages must also be urgently addressed. While public provision must be bolstered, market mechanisms, in conjunction with adequate oversight, must also be encouraged to back private provision if the Indian higher education sector is to move to a higher growth trajectory in terms of both quantity and quality [1 ].
Indian higher education is, and has long been, a blend of public and private efforts. More than 40 years ago, the Birla Institute of Technology and Science at Pilani , funded and run by the Birla Group Trust, was officially recognized as a university. The Manipal Group  in Karnataka has been operating private colleges since the early 1950s while its flagship, the Manipal Academy of Higher Education  (now Manipal University) became the first private institution to be awarded “deemed-university” status in 1993.
Most of India’s 18,000 plus institutions are colleges and just 400 or so are universities. While universities award their own degrees, colleges typically award degrees through the university with which they are affiliated. Both the national Parliament and the state legislatures can authorize the establishment of universities. In addition, the national government can grant “deemed-university” status to an institution initially founded as a private or public college.
State governments own and manage most public institutions of higher education and fully or substantially fund public universities while providing a portion of the funding through grant-in-aid funds to not-for-profit private institutions (public-private partnerships). The federal government contributes no more than 25 percent to the costs of funding higher education.
The states regulate institutions through directorates or commissionarates created within the department of higher education . In most cases, these regulators also direct the flow of public funding. Non-grant-in-aid private institutions (fully private institutions) need permission from the government to start and manage their own institutions, while functioning under government or university regulations depending on their affiliation. In many states, both the state government and affiliating university practice dual control of grant-in-aid as well as non-grant affiliated institutions. In some states, a limited but increasing number of private institutions of higher education have been granted partial to full autonomy.
Most states have made extensive use of the private sector to expand access to higher education through the use of public grant-in-aid subsidies. Nationally, one-third of total enrollments are at private aided institutions, and the share is significantly higher in states with a larger number of colleges. In terms of institutions, over 40 percent are private. It can be argued therefore that subsidies to private institutions of higher education constitute a significant portion of public higher-education expenditures in many states.
Currently, both the national government and state governments can authorize the establishment of private universities, while only the national government can grant ‘deemed university’ status to institutions initially opened as private or public colleges. In recent years, there has been significant growth in the number of private institutions seeking greater autonomy from government oversight through the award of deemed status. Today, after the recent liberalization of standards for the award of deemed status, more than 70 of India’s 108 deemed universities are privately operated. A majority of India’s private deemed universities have been awarded that status in the last decade, while the government still seeks to regulate the process, which is viewed by many as opaque and open to corrupting influences.
As an interesting side note, foreign institutions wishing to establish on Indian shores would be required to do so as deemed universities under the proposed Foreign Educational Institutions (Regulation of Entry and Operation, Maintenance of Quality and Prevention of Commercialization) Bill currently under consideration by the government.
Broadly speaking, there are four main categories in the university sector:
- State and Central Universities: Universities covered under Section 2f of the University Grants Commission (UGC) Act, which include conventional, open and professional universities established through Central and State legislation Acts. These institutions are eligible for government funding. At the time of writing, there were 232 State Universities and 25 Central Universities.
- Private Universities: Established under Section 2f of the UGC Act, these institutions are established through State Acts by public-private partnerships mainly as private trusts. These are not eligible to receive public grants. There are 25 private universities (not including deemed universities).
- Institutions of National Importance: These institutions are established under Central or State Acts. In this category, there are 33 institutions including Indian Institutes of Technology and Indian Institutes of Management.
- Deemed-to-be Universities. These are institutions of high repute and long standing (or even de novo for those in new knowledge areas) notified by the Central Government as Deemed-to-be Universities (known commonly as Deemed Universities) on the recommendation of the UGC. These institutions fall under Section 3 of the UGC Act. There are 108 Deemed Universities.
For a detailed overview of the Indian education system, please see the February 2006 issue  of WENR.
Financing New Enrollments
With the world’s average gross enrollment ratio (GER) standing at 23 percent (developed nations at 54.6 percent and developing countries at 11.3 percent), India with a current GER of 11 percent needs to pool resources from the public and private sectors to increase the GER to the government target of 15 percent by the end of the 11th Five Year Plan (2011-12) and to the 21 percent target of the 12th Five Year Plan. To achieve this, the government must address geographic enrollment inequalities represented by data that show a 24 percent GER in urban areas versus only 9 percent in rural areas.
Low spending of 0.63 percent of GDP on higher education (of a committed 6 percent to education as a whole), versus an OECD average of 1.5 percent, has also been cause for concern for the Indian government. Therefore, the government increased the allocation for higher and technical education 9-fold from Rs. 9600 Crores (US$2.1 billion) in the 10th Five Year Plan to Rs. 84,943 Crores (US$18.6 billion) in the 11th Plan.
However, even such a massive increase in public investment is not sufficient to meet the rising demand for higher education in the country. The success of school reforms over the past 15 years has increased not only supply but also demand with the number of students seeking a higher education increasing exponentially in recent decades. If we take into consideration only the government’s newest initiatives of establishing 16 Central Universities, 370 colleges in low GER districts, 8 IITs, 7 IIMs, 10 National Institutes of Technology (NITs), 20 Indian Institutes of Information Technology (IIITs), 5 Indian Institutes of Science Education and Research (IISERs), 2 Schools of Planning and Architecture, and 50 Centers for Training and Research in Frontier Areas, for which Rs. 30,682 Crores (US$6.7 billion) is allocated, the funding gap identified by the Indian Government’s Planning Commission stands at a massive Rs. 2.22 Lakh Crores (US$48.2 billion).
Following the Planning Commission’s calculations, India needs an additional 200 universities to have on average one university per district. Thus, it is clear that public resources are far from sufficient to meet the growing demand for quality higher education. There is a need, therefore, to significantly increase investment in the private sector beyond the current grant-in-aid funding, as well as a need to attract greater private investment in general. With that said, it is also imperative that public funds currently allocated to higher education are used as efficiently and productively as possible.
It is also imperative that federal legislation on private provision be introduced to parliament to supplement a patchwork of state regulations, which in cases such as the Chatttisgarh Private Universities Act of 2002 opened the floodgates for substandard operators to set up shop. India’s Supreme Court later ruled (2005) that the 122 private universities that had opened since 2002 in Chattisgarh were operating illegally on the grounds that guidelines set by the government’s university regulator, the University Grants Commission , on the establishment of a university were not followed. This suggests a need for an overarching set of regulations governing the establishment of private universities to ensure certain minimum standards. However, to attract genuine private participation in higher education, the country will have to institute enabling mechanisms to the existing policy and regulatory framework. This will, in turn, increase opportunities for public-private partnership [2 ].
Despite recent growth in the size of the Indian higher education system, the GER is still less than half the average for the Asian region (22 percent). Meanwhile, India continues to be a net exporter of students with more than 120,000 students leaving India’s shores to study abroad every year. In contrast, approximately 14,000 students come to India for higher education each year. One of the primary reasons for this imbalance is a lack of harmony between the Indian higher education system and those abroad. The problem becomes more complex as the mobility of students within India is also constrained due to equivalency issues and the lack of a credit transfer system. Meanwhile, India today has no clear strategy or policy for the recognition of domestic or international academic credentials.
There are several bodies responsible for monitoring and regulating the quality standards of Indian institutions of higher education. The National Assessment and Accreditation Council  (NAAC), is primary among them. Established by the UGC in 1994 as an autonomous body, the NAAC has been mandated to assess and accredit institutions of higher education that fall under the purview of the UGC. Accreditation decisions by the NAAC executive committee are based on the findings of institutional self-study reports and external peer-review visits. While efforts have been made to encourage more universities and colleges to be a part of the voluntary accreditation process, many high-profile institutions have not submitted to undertake the accreditation process, a fact that raises questions about the credibility of the university accreditation system. As it currently exists, the NAAC system continues to be open to widespread criticism, and there remains a pressing need to make the process more efficient and discerning in terms of quality standards.
India also has professional councils that are responsible for the recognition of courses, promotion of professional institutions and providing grants to undergraduate programs. The statutory professional councils are: All India Council for Technical Education  including the National Board of Accreditation ; Distance Education Council ; Indian Council for Agriculture Research ; Bar Council of India ; National Council for Teacher Education ; Rehabilitation Council of India ; Medical Council of India ; Pharmacy Council of India ; Indian Nursing Council ; Dental Council of India ; Central Council of Homeopathy ; and the Central Council of Indian Medicine .
The real challenge of accreditation in India is to move beyond the essential criteria for approval to start educational institutions and to address the quality dimension in a real sense. The process must evolve so that it can make reliable and valid comparisons between higher education institutions. A single regulatory authority, independent of the government, needs to be established with a role limited to regulating higher education institutions – public or private – as they seek to establish, with minimum prescriptions and flexible norms that allow them to respond to changes.
The Indian high education system is one of the most regulated in the world. With the exception of certain institutions that are guaranteed a degree of autonomy from government oversight, the government regulates curriculum content, student admissions and tuition fees. This bureaucratic oversight has created a system that is largely unresponsive to the developing needs of society and labor markets. Approval procedures for establishing new programs are burdensome, curriculum revision is slow, and institutions have a high degree of overlap in the content they teach, much of which is little changed in decades. In the college sector, where the vast majority of Indian tertiary students are educated, institutions are under tight government control through the public universities with which they are affiliated. They lack the autonomy to offer new programs, change curricula and evaluation, or change policies in matters of admissions and fees.
Degree-awarding institutions that have been awarded deemed status or are considered institutions of national importance (see above) are guaranteed autonomy from government interference by acts of parliament. This autonomy theoretically extends to the creation of degree programs, curriculum content, admissions, fees, salaries and spending. Decisions on such matters are overseen by governing boards that are largely independent of the government.
The autonomy that IITs have enjoyed has been one of the driving forces behind their global standing as institutions of high academic quality, and has enabled them to develop innovative specialized technology programs that are responsive to the needs of the labor markets. However, the government still has the ability to greatly reduce the level of autonomy that these institutions are supposed to enjoy. Admission quotas for underserved minority groups has been a particularly controversial example in recent years, as has government subsidization of tuition fees at both IIMs and IITs. Opponents to tuition subsidies argue that it is just another way that the government erodes institutional autonomy.
Rather than capping and subsidizing fees, the government should focus its energies related to social justice and equity in admissions through scholarships and student loans, funded in part through institutional endowment funds. In addition, the government needs to promote on-campus part-time jobs, teaching assistantships and research assistantships. It is not possible to create high quality institutions through legislation and regulations. In fact, the National Knowledge Commission observes that Indian higher education is over regulated and under-governed [3 ].
The need for greater autonomy, which must be linked to accountability, is highlighted in the National Knowledge Commission’s current plan, which states that “autonomy is the sine qua non of excellence. Erosion of autonomy adversely impacts quality. Autonomy must, however, be linked to accountability. Furthermore, the government must ensure that fee structures do not lead to profiteering. Beyond this, the state/government must not interfere in institutional governance.” The Commission goes on to state that institutions need to set their own goals and targets to which they must be accountable.
The higher education sector needs an enabling environment that provides a level playing field for a wide variety of higher and technical education institutions. This requires that the necessary legislation be introduced to parliament, so that the current ad-hoc, case-by-case approach to public-private partnerships in higher education be ended by instituting the necessary checks and balances. To end the ambiguity of private sector participation in higher education, the long pending Private (Establishment and Regulation) Bill needs to be made reasonable and practical, and then passed by parliament.In addition, provisions to attract world-class foreign universities would provide incentives for top quality domestic private and deemed universities to further improve their standards. The Foreign Universities (Establishment and Regulation) Bill, while meeting the purpose of regulating the entry of foreign universities, should also facilitate mutual benefits by providing healthy competition between foreign and Indian universities.
It is worth experimenting by encouraging select universities to collaborate with foreign universities of proven quality to undertake joint programs at the masters and doctoral levels, particularly in the areas of basic sciences, humanities and technology. India cannot attract foreign students unless it offers programs of quality comparable to internationally respected universities. The primary focus of Indian higher education should be quality enhancement, and India’s faculty should be better trained to handle the needs of international students. Corporate involvement in academia could go a long way in improving the quality of education through increased resources as well as adopting appropriate principles of organization and management.
Teaching and Research Shortages
According to Dr. Sam Pitroda, Chairman of the National Knowledge Commission, there is a need to integrate technology into education. Teachers should cease to merely be points of delivery of education, rather become mentors to students. In this context, there is an urgent need to synergize teaching and research by fostering research in universities and teaching at research institutes [4 ]. To augment the demand for skilled labor at various levels, India must also revamp and promote relevant vocational training programs. In addition, there is a need to allow movement between vocational and academic streams upon the acquisition of the required credits.
Universities urgently need to produce creative people to manage the new economy. For this we need a pool of dedicated and talented teachers, who unfortunately are in short supply [5 ]. Strategies to attract talented teachers are perhaps the most pressing need of Indian higher education [6 ]. According to an October 2008 government report, just over 50 percent of faculty positions at state and federal public universities are currently vacant. This troubling figure is significantly higher than earlier unofficial estimates of an approximately 35 percent vacancy rate, and comes at a time when India plans a significant expansion of the higher education sector.
“The house of higher education is not in good shape, at the moment,” says the report, which was issued by the pay-review committee of the UGC. The report warns that the faculty shortage may prevent the government from meeting its goal of setting up 80 new universities, engineering schools, management schools, and research institutes, along with more than 350 undergraduate colleges.
There is clearly a need to rationalize the incentive structures for lecturers, as well as to promote postgraduate admissions. According to the UGC report, “attractive pay packages and better serving conditions” for professors should be the first step so that the faculty shortage does not become what the report terms the “Achilles’ heel” of India’s education system. The report recommends a 70- to 90-percent salary increase for professors.
Attracting and retaining faculty has to happen in concert with efforts to foster innovation by aggressively pursuing both institutional reforms and an engagement with relevant technologies [7 ]. To be leaders in the global economy, a country also needs to be a global leader in education.
There is substantial excitement, and evident cause for concern, in higher education about globalization and internationalization. The forces of globalization have given rise to greatly increased academic mobility, compatibility and employability of human resources, while it is widely accepted that educational cooperation leads to stable and peaceful societies. Common global trends and forces of internationalization are increasingly challenging closed national education systems, and international coordination in higher education is ever more important as national borders open up.
Internationalization of Indian education will take place, truly, when India makes international commitments in the area of higher education and opens up the sector to both exports and imports. Rigid licensing processes and bureaucracy still hinder the higher education sector when it comes to attracting foreign students and developing relationships with foreign institutions. If Indian higher education is to capitalize from the forces of globalization, quality issues must also be addressed in an urgent manner so that institutions can become more globally competitive, which in turn leads to greater opportunities for international collaboration, increased international enrollments, the ability to attract top academics, and most importantly to develop a stock of domestic researchers and lecturers to staff existing and future universities.
Acknowledgements: We thank Ms. Ambika Mohan, EDGE Research Fellow at NIAS for assistance. We also thank Dr K. Kasturirangan, Director NIAS and Anand Sudarshan, CEO, Manipal Education, for visionary inputs.
3  NKC Report http://knowledgecommission.gov.in/recommendations/higher.asp 
4  Rama Rao.P and B.K Anitha : Challenges In Higher Education In The Face Of India’s Demographic Ascendancy In Science and Society, IIAS, Shimla ( forth coming..)
5  B.K. Anitha and Bhushan Patwardhan (2008) Emerging Directions in Global Education in Current Science Current Science, Vol. 95, No. 3, 10 August 2008, 303.
6  For alternative strategies, read “Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future” National Academies Press 2007; “ India Education Vision Document 2008, EDGE(www.edge2008.in)
7  B.K. Anitha( 2006): India’s Competitiveness and Preparedness in Science and Technology for the Coming Decades, Current Science, vol 90, No.3, 10 February 2006