1123 words free essay on Privatization of Higher Education in India


Higher education in India today is ridden with many and varied problems including broadening of access, ensuring equity, and the financial crunch. India has quite a large system of higher education with 250 universities, over 10,500 colleges and nearly 55 lakhs of students being taught by over 3 lakhs of teachers. And yet the proportion of the university and college going student population in the relevant age group of 16-23 is dismal 6 per cent. This is quite low even when compared with developing countries, the figure being 20 per cent for both Egypt and Thailand, and 16 per cent for Mexico.

In the developed countries, however, access to higher education is to the tune of 40 per cent and more. Thus, in spite of a general expansion of higher education in India, inadequate access continues to cause concern. Further, while enrolment of women and those belonging to SC/ST groups and other backward communities has improved, they are still very much under represented.

Providing increased access to education, meeting the challenge of equity and improving the quality of education entails large investment. To solve the problem of resource crunch, a suggested way is exploring additional avenues of generating systems own resources instead of being fully dependent on the state exchequer. It is imperative here that the higher education system has to seek participation both of the Government as well as private and voluntary bodies. Some amount of private funding thus appears inevitable for making up the deficit caused by inadequate state funding.


The overall investment in education as a proportion of the gross domestic product (GDP) is still below the norm of 6 per cent as stated in the National Policy on Education. Since provision of free and compulsory education at the elementary stage is a Constitutional commitment, budgetary allocation for this sector of education is continuously on increase. This has affected the resource allocation to

universities and most higher education institutions all over the country, which are facing acute financial crisis. While the universities are at pain in persuading the Government for increased budgetary allocations, some of them have simultaneously taken measures for generating funds of their own.

It is high time the university system resorted to long-term resource planning instead of taking the state support for granted. Each university will have to identify avenues of resource generation, internal as well as external, depending upon the nature of its programme offerings and the locale. The internal measures, amongst other things, may include proper utilization of funds, general economy in expenditures, pooling and sharing of departmental and institutional resources and most importantly, rationalization of fee structure. As for the external resources, the important avenues include donations from alumni, philanthropists and others, consultancy, university-industry interaction, etc.

In most institutions of higher education, at present, the tuition fees contribute very little towards earnings while the recurring expenditure on each student is much higher. The Swami Nathan panel set up by the UGC has suggested building up a reservoir of funds by collecting educational from industries and other user organizations. Setting up of an Educational Development Bank of India initially with shares of ? 1000 crore each by the State Governments, Central Government and international financial agencies has also been suggested. Raising money through consultancy work or job assignment by institutions to industries or other professional organizations is yet another avenue being profusely recommended.


The private initiative in education, especially higher education is not altogether new to India. Some of the leading universities namely, the Banaras Hindu University and the Aligarh Muslim University came up with the efforts of certain dedicated individuals and financial support of the community at large. Again, a large number of educational institutions in the country especially those concerned with general and professional higher education have been established on private and voluntary initiative with or without financial subsidy from the Government.

A few private institutions of higher education have been given virtual university status by being recognized as ‘Deemed Universities’. A few universities like Guru Gobind Singh Indraprastha University in Delhi have been created consisting of only affiliated private self-financing colleges. A few private institutions like International Business Schools and Indian Institute of Information Technology are allowed to operate virtually as universities. There has also been a general trend towards liberalization and opening of education sector to private initiative especially in the southern states of Karnataka, Andhra Pradesh and Tamil Nadu.

Thus, the private higher education system constitutes more than 50 per cent of the higher education sector. Hence, what is required is not restriction but more growth so that with competition, quality will automatically improve. Perhaps a rating agency, which could provide a standard procedure for ranking of institutions of higher learning based on predetermined criteria, could instill students with greater confidence in their choices.

The road ahead for India is directly linked to creation of quality higher education institutions in a big way to meet the challenge of the knowledge hub, which India is fast becoming. Since the Government resources for higher education are simply not enough, recourse to quality private higher education, both university and non-university is essential. India needs to have a proactive demand based policy towards private higher education including foreign institutions/universities desirous of setting up campus in India or entering into joint-ventures. The central and state Governments could offer tax concessions/fiscal incentives for setting up campuses.


Since private institutions are already using a higher fee structure, there has arisen a need for financing of higher education for students, especially those from low income households. Like in the United States, it has become necessary to evolve a guarantee system, where students from low income households are eligible for a student loan without parental security or guarantee so that there is no discrimination due to the financial background of the student. Subsidization of the interest rate for students may be based on the student’s and student’s family income. An innovative financial mechanism needs to be evolved incorporating some of the salient features of the systems existing in the UK and USA.

In the context of the current changing social and economic fabric of the country, it appears almost certain to go in for private funding of education. The recent paradigm shift in Indian economic and political philosophy has led to the demand of private universities so as to meet the challenge of contemplated open economy and the demand for qualitative human resources and high level of R & D.

However, the Partial privatization calls for caution against, amongst others things, the resultant commercialization of education, obstacles in merit based admissions, deterioration in academic standards, encroachment in institutions and autonomy, service conditions of teachers, and education becoming subservient to market logic advanced by the private sector in the country.

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