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Higher Education in India: Comments Arvind Panagariya Columbia University NBER Conference on American Universities in a Global Market, Woodstock, VT Oct 2-4, 2008 Pre-Independence History

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higher education in india comments

Higher Education in India: Comments

Arvind Panagariya

Columbia University

NBER Conference on American Universities in a Global Market, Woodstock, VT Oct 2-4, 2008

pre independence history
Pre-Independence History
  • 1854: Sir Charles Wood's Dispatch known as the “Magna Carta of English Education in India” recommended a proper scheme of education from primary to university levels
  • 1857: Universities of Calcutta, Bombay and Madras were set up
  • 1925: Inter-University Board was created to promote cooperation among the universities
  • 1945: University Grants Committee was formed to oversee the activities of three central universities (Delhi, Aligarh and Banaras). Authority extended to all universities in 1947
post independence developments
Post-Independence Developments
  • 1948: The University Education Commission with Radhakrishnana as Chairman. It recommended reconstituting the University Grants Committee as the University Grants Commission along the lines of the UGC in U.K.
  • 1953: UGC formally inaugurated
  • 1956: UGC Act turning the UGC into a statutory body with wide powers over India’s higher education system
a highly centralize system with the ugc at the apex
A highly Centralize System with the UGC at the Apex
  • UGC and 14 statutory central professional councils tightly control the entire system. Corruption is rampant at all levels. As examples, two most powerful councils are
    • All India Council of Technical Education (AICTE) (since 1987)
    • Medical Council of India (MCI) (since 1956)
  • UGC controls the entire university system including curriculums, degrees, fees, faculty qualifications and approval to new universities.
the tight grip of professional councils
The Tight Grip of Professional Councils
  • AICTE controls virtually all aspects of technical education in Engineering and Technology, MCA & MBA, Pharmacy, Architecture & Applied Arts, Hotel Management & Catering Technology. E.g.,
    • It lays down norms and standards for courses, curricula, physical and instructional facilities, staff pattern, staff qualifications, quality instruction, assessment and examinations
    • It grants approval for starting new technical institutions and for the introduction of new course or programs
  • MCI: All aspects of medical education
avenues to setting up degree awarding institutions in india
Avenues to Setting up Degree Awarding Institutions in India
  • Central universities established by Acts of Parliament and State universities established by Acts of State Legislative Assemblies;
  • Private universities also require central or state legislation;
  • Institutions “deemed” to be universities by the UGC and, thus, given university status under the UGC Act 1956; and
  • Degree-awarding institutions of national importance, such as the Indian Institutes of Technology (IIT), established by Acts of Parliament and outside the purview of the UGC.
private universities a sham
Private Universities: A Sham

There are only two avenues

    • UGC must deem them as universities or
    • They must be created through a central or state legislation
  • The UGC approval remains essential in either case
  • Considerable interference by the UGC with admissions, fees, curriculums, degrees awarded and faculty salaries
private colleges hostage to the ugc
Private Colleges: Hostage to the UGC
  • Must be affiliated to a central or state university (private and deemed universities are unitary and not allowed to affiliate colleges)
  • No effective freedom to create a brand name since degrees must be issued in the name of the affiliating university
  • Medical colleges: MCI, a highly corrupt body, exercises very tight control and threatens closure on the flimsiest grounds. Unlike engineering colleges, medical colleges have expanded very slowly except in a handful of the states
low enrolment ratio and low value added in the classroom
Low Enrolment Ratio and Low Value Added in the Classroom
  • Gross enrolment ratio in higher education as reported by Unesco rose from 10 in 2000 to 12 in 2004 in India
  • By comparison, this ratio rose from 6 percent in 1999 to 13 percent in 2002 and 19 percent in 2004 in China
  • Rampant teacher and student absenteeism
  • Teachers have zero incentive to teach or do research (Once “tenured,” cannot be fired. No gain from superior performance except the gratitude of some sincere students.)
so how come the system still produces so many brilliant graduates
So How Come the System Still produces so Many Brilliant Graduates
  • With a preponderantly young population of more than a billion individuals and a longstanding tradition that places the highest value on intellectual pursuits, India has a large number of young men and women interested in education
  • Thanks to the entry of a large number of excellent private schools in the urban areas and a well-functioning secondary-school system, many students are well prepared for higher education when they reach college age.
  • Universities and colleges do an adequate job of quality control. The centralized examinations are able to sort out the very best 10% or so from the rest credibly. Good performance in the examinations, thus, has a signaling value in the market place. This provides brighter students the incentive to master the curriculum and even spend large sums of money on coaching institutes if required.
  • But this still leaves a vast number of poorly qualified students.
what must be done
What Must be Done?
  • Decentralize (abolish the UGC—U.K. did years ago!!)
  • Unshackle private universities and colleges
  • Augment financial resources of the universities
  • Knock down the barriers to foreign scholars
the case for decentralization
The Case for Decentralization
  • Even UGC cannot administer 400 plus universities and 20,000 plus colleges
  • An average of 50 affiliated colleges per university is also far too many
  • Centralization stifles creativity and initiative at the local level
  • It also destroys the incentive to compete (same salary etc.). Genuine autonomy will require freedom to set the salary by universities and colleges.
  • Pre-Independence India was decentralized; In mid 1980s, China decentralized, too.
unshackle private universities and colleges shift in favor of private institutions



Students (million)























Private Aided







Private Unaided







Unshackle Private Universities and Colleges: Shift in favor of Private Institutions
unshackle private universities and colleges learn from the u s experience
Unshackle Private Universities and Colleges: Learn from the U.S. Experience
  • Genuine competition will have to come from private universities (Harvard, Princeton, Columbia etc.)
  • This will also help improve standards in public universities
  • Freedom to set salaries will lead to faculty mobility across universities
  • Freedom to set fees in private universities will also help establish the principle of fees in public universities
augmenting financial resources
Augmenting Financial Resources
  • Public institutions funding: public funds, fees and income from other sources including charitable contributions, project grants from the industry and government, sales of publications and income from renting land and other facilities on the campus.
  • Public expenditure: down from 1% of the GDP in 1980-81 to 0.6 in 2003-04
  • Tuition fees: 15 to 20% of operating expenditures in the 1950s but down to 2-3% today
barriers to foreign scholars to be removed
Barriers to Foreign Scholars to be Removed
  • Department of Higher Education Guidelines: , “In case a foreign scholar proposes to undertake a research project in a university/institution of higher learning in India, he is required to make an application in the prescribed proforma to the Ministry of Human Resource Development (Department of Higher Education) and get his research project approved by the Government before he is allowed to undertake any research in a university/institution.”
  • Universities and institutions of higher learning hosting an international conference must also get prior permission from the HRD Ministry on virtually all aspects of the conference including foreign scholars likely to participate.
  • A university wishing to host a foreign scholar as a visiting professor must get clearance of the HRD Ministry
what are the chances of reforms
What are the chances of Reforms?
  • No worse than of trade and investment liberalization in 1991. Few thought at the time that India will ever give up License Raj or the monopoly of telecommunications and airline industry.