India has one of the most extensive education systems in the world but it is nowhere near meeting its burgeoning demand.

I t is a given that the knowledge industry will thrive only on mass higher education. We can't break into the big league without a high ly skilled gen-next. Are we then headed in the right direction?

Indian higher education is stranded between selective notions of socialism and free enterprise. In the glory days of socialism, we promoted higher education at the cost of universal primary education. Now in the midst of reforms, we can't shake off our reservations against private investment in higher education. The result is that we neither have China's impressive early gains nor America's high quality.

HT research team analyses India's higher education in these columns. We begin by examining the mess our policy is in. The opening report looks at the implications of knee-jerk planning, flawed policies and court interventions. The second write up measures the Indian system against some of the most successful global models. In the end, we try to offer a simple road map on the basis of several important studies.

With 342 universities and over 5,000 recognised colleges, India's education system is among the largest in the world. The same numbers look ridiculous when seen against the backdrop of our immense challenges. All these institutions cater to only 4.2 per cent of the country's youth. As India churns out 2 million graduates every year, another 28 million young people are added to its population.

Out of its 2 million graduates, only 5 per cent are of international quality, another 20 per cent are barely employable with training and the remaining 75 per cent are seriously sub-standard. Indians may be poor but at 50 per cent, their share of household expenditure on education (as percentage of total national expenditure) is very high compared to 3.5 per cent in Netherlands, 5.1 per cent in France and 24.1 per cent in United States, according to UN figures.

Private funding for higher education allows more government funds to go into primary and secondary education. The students expect and get higher quality when they pay for education. Higher expectations fuel competition, which improves quality and lowers costs. The government can be the main facilitator and regulator of quality. It can address the issue of low-cost education for the weaker sections by giving targeted subsidies and loans directly to the needy.

Technology has already revolutionized the concept of distance learning. Imagine virtual universities without classrooms, campuses or fixed facultystudent ratios. Teaching material in public domain rules out bad teaching and on-line exams handle dramatic numbers with ease. The NIIT provides specialized teaching services to 5 lakh students in 30 countries including the United States. Another Indian company, Aptech, has taught 4 million students in 50 countries in less than two decades. The time has come, perhaps, to replicate our own success stories besides learning from others.

A also that the recognitions of colleges by UGC per se were falling. From 1993 to 2000, the number of colleges increased from 7,958 to 11,831, but only 5,169, or 44 per cent of the total were recognised.

If the policy has been clearly floundering, resource allocation has been abysmal. Public expenditure on higher education per student dipped from Rs 7,676 in 1990-91 to Rs 5,522 in 2002-03. On a more macro scale, while the government spends 4 per cent of its GNP on the entire education sector, only 0.4 per cent is spent on higher education. That's not all. Access to higher education remains limited to seven per cent of our population in the age group 17-23. Contrast this with some other countries: US and Korea -- 80 per cent; UK -60 per cent; and global average - 20 per cent.

Higher education cannot wait until primary and secondary education is made completely universal. The traditional sequencing of first taking care of primary education, followed by secondary and higher education does not work any more. And more elementary education will lead to a demand for more higher education. In fact, a World Bank and UNESCO study in 2000 said higher education in developing countries not only improves individual lives but also enriches entire societies. It helps increase wages and productivity and promotes independence and initiative, both valuable intellectual resources for any nation.

A report "Policy Framework for Reforms in Education" prepared in 2000 to assess the need gap in higher education, by Mukesh Ambani and Kumarmangalam Birla for the Prime Minister's Council on Trade and Industry, projected that by 2015 we need to double the number of colleges in India. The report said that the task would require an investment of Rs 11,000 crore. It recommended that 60 per cent of the recurring and non-recurring expenses would have to come from the private sector.

The argument in favour of private investment to tackle the rising demand for quality higher education is not a new one. As the next section shows some of the top-of-theline universities abroad run on private initiatives while the government plays the role of a moderator. The issue has been debated several times at the highest level. Some of these issues were covered in the Private Universities (Establishment and Regulation) Bill 1995. But the bill is still pending in the Rajya Sabha.

The muddle Lack of a comprehen sive central policy on higher education Curricula not in tune with present day mar ket needs Mushrooming private universities with no standards Severe government resource crunch to build infrastructure Rs 50,000 cr Amount spent by Indian students studying abroad every year which is enough to build 20 IITs or 50 IIMs per year 2.5 million Number of graduates India produces every year. Out of these 5% are employable, 20% are trainable and recruitable and 80% are not even trainable 28 percentage Decline in public expenditure per student on higher education in the last ten years

The road ahead for Indian Higher Education

SAIKAT Neogi, PREETI Singh Saksena and COOSHALLE Samuel

H igher education in India is stuck in the vicious circle of lack of funds and halfbaked policy initiatives leading to inadequate expansion and questionable quali ty. Dramatic numbers require massive investments that can't come from the public spending alone. While there are no quick fixes, we can't take too long deliberating our options. The following road map can help make a new beginning:
Policy reforms: The government must focus on primary and secondary education and leave the task of funding new colleges and universities for the private sector.
The Private University Bill must be legislat ed to facilitate private funding.
The government can play the role of facilita tor and regulator.
The government should set standards, offer inputs such as concessional land and tax hol idays. Resource mobilisation: Cost recovery, efficient use of faculty and financial restructuring of universities can reduce dependence on the exchequer.
 Recurring expenses can be raised from stu dent fees to 20 per cent from the current 3 per cent as per the UGC suggestion. ? Setting up an Education Development Bank of India to provide soft interest rate loans.
 Existing institutions should have the free dom to innovate and generate their own re sources.
  Need-based students scholarships to finance higher education.
 Foreign direct investment especially in tech nical education and research Innovative use of technology: Innovative alternatives to capital-intensive campuses and technology use in off campus education will ease the pressure.
 Open universities and correspondence cours es can cover much bigger numbers through use of IT and e-learning.
 Integrating higher education with informa tion communication tools like online exams and virtual campuses can increase accessi bility Global

leverage: Foreign educational providers can facilitate access to a wider variety of courses.
 Foreign universities and professional insti tutions of repute must be allowed to operate within the country.
 The arrangement could include franchising, twinning programmes (interlinking with local universities), study centers, programme col laborations, and offshore or branch campuses.

Solution lies in private initiatives

by PREETI Singh Saksena

W e must have an open mind for introducing imaginative changes in every aspect of policy and execution if we wish to learn from the global success stories .

A recent survey of higher education by The Economist, rates the US model as the best in the world. The reasons cited for this are the unique blend of ample funds, academic excellence, a variety of choices and free-market competition.

If the American model is taken as a yardstick, India has to do a lot of catching up. Public expenditure on higher education remains abysmally low, being only 0.4per cent of GNP. Overall enrolment ratio is less than 10 per cent, compared to more than 80 per cent in Korea and USA. The youth literacy rate for India is 73.3 per cent compared to 98.9 per cent for China and access to higher education remains the prerogative of a select few.

For example, the total number of seats in the IITs and IIMs allow the selection of only the top 1.1 per cent to 1.3 per cent of applicants, as compared to nearly 10-15 per cent in institutions like Harvard, Stanford, Oxford or Cambridge.

The February 2005 Supreme Court verdict ordering the closure of more than a hundred universities and institutes across the country and the recent withdrawal of AICTE approval to Amity Business School, underscores the problems of quality control and academic standards. There is the absence of a successful facilitator like the Council for Higher Education Accreditation (CHEA) in the US, a private, non-profit national body that fosters accountability, academic high standards, fair practices and is a dispute resolution mechanism for voluntary ac creditation.

Another successful model, that of the Scandinavian countries, rests on the principle that the citizens pay back for their education through taxes, as also on the homogeneity of all programmes, whether technical or purely academic. Such a model is difficult to replicate in India where varied economic backgrounds necessitate different fee struc tures. There are just too many people to be educated despite a shortfall of skilled workers.

Closer home, China faces a similar challenge, and has devised a number of innovative measures.

Peking University has set up a 'parallel' university, in which students who fail to make the cut can enroll by pay ing a little extra.

China is also invit ing FDI in higher educa tion through joint ven tures and has various cooperative learning programmes operat ed by US, Australia, France, Singapore and others. The idea is to import the best opportunities to nur ture the best talent. All this has increased China's enrolment rates phenomenally. In 2005, about 1.17 million students applied to enter postgraduate programs, a 24 per cent increase from 2004 and the Ministry of Education plans to triple this number within the next five years.

Although the IITs are islands of excellence in an ocean of questionable quality, India is not without its success stories. The MIT of India, the Manipal Institute of Technology, is the leader amongst the 45 per cent privately run providers of technical education at the next level. It combines diversity of curricula and practical training with interaction with the corporate sector. This includes imparting practical skills to fit future job profiles, something clearly reflected in the institution's impressive on-campus recruitments.

To replicate its success, there is a need to make the system more varied and preference-based. In the US, more than 60 per cent of higher education institutes are community colleges that teach practical vocational skills.

According to Nasscom, demand-fuelled enrolment in Indian tech schools will increase by 70 per cent to 600,000 by 2008. There is an urgent need to increase the number of seats, which require bigger or new campuses, which in turn require more funds. The natural corollary of this is that private initiative must be encouraged. This requires a radical change in our collective thinking.

Where we stand New Zealand's public expen diture on higher educa tion is 2.2 per cent of its GNP; India 0.4 per cent UK's The Times Higher Education Supplement lists 7 American Universities in the world's top 10. IIT ranks 41st in a list of 200.