Private Higher Education in India

When we talk about private higher education, our minds obviously rush immediately to the United States, where a mix of world class universities like Harvard, Yale, and Princeton coexist with a range of low quality for-profits. And almost everything in between. Sometimes we think of places like Korea or Japan — much more heavily regulated, but like the U.S. possessing some very high-quality private institutions. Or like Chile or Brazil, where large numbers of low to middle in quality privates coexist with high prestige Catholic institutions. What we don’t often think of is India, and yet India has by far the world’s largest system of private higher education, both in terms of number of institutions in the tens of thousands, and students served in the tens of millions.

Until quite recently, private institutions in India served the bottom of the market as they do in most developing countries. Then in the last 20 years, an entire flotilla of new private deemed universities have exploded onto the scene. A good number of them have been promoted to the global top 1000, perhaps the youngest universities in the world to achieve this status.

Today my guest is Professor N. V. Varghese, the Vice Chancellor of the National Institute of Educational Planning and Administration in New Delhi. He’s the co-editor of a recent book entitled?India Higher Education Report 2021, Private Higher Education . He’s with us today to discuss his book, which I think is by far the most comprehensive on this subject ever written. Two points I think really stand out. The first is the truly different worlds inhabited by private colleges in India and that inhabited by private universities. And the second is the role that large corporations and philanthropists are playing in the development of these new top universities. I was particularly impressed by Dr. Varghese’s view that private universities will continue gaining on publics in India, and his certainty that the rise of universities like O.P. Jindal will continue unabated. This could be one of the largest tectonic shifts in global higher education in the decades to come.

But enough from me,?let’s listen to Dr. Varghese .

The World of Higher Education Podcast Episode 2.26 | Private Higher Education in India

Transcript

Alex Usher: Dr. Varghese, the typical pattern that we see in countries which are massifying their system of education is to use some combination of two approaches. One approach is to allow the growth of a private educational sector, which focuses on low-cost fields of education. The second is to allow public educational systems to charge fees, which you call privatization of public institutions in your book. Now India, I think, has taken kind of a balanced approach, using ag mix of both policies. Why did India go that route? Why did it pick the policy mix that it did?

Dr. Varghese: Thank you very much, Alex. In fact, to understand the Indian higher education system, we should see that most of the undergraduate education, which accounts for nearly 79 to 80% of students, takes place in the colleges, not in the universities. Most of the postgraduate education and research are taking place in the universities. So, when you’re talking about this, it is important to understand that there is an affiliated system and this surge in enrollment is taking place at the undergraduate level in the affiliated colleges which are majority private. You’ll find that many of them are private unaided. Now, nearly around 44% of the colleges in India are unaided, and another 21 to 22% of the colleges are aided, just generally aided but they are also private. So, privatization in that sense is a process that started 1970s and ‘80s in the colleges. However, private universities did not exist in the last century. It is an invention of this century. So, India followed a pattern, of as you rightly pointed out, a mix of this but it became more prominent and important in this century than in the past century. These private colleges, especially in the areas of engineering, technical and professional courses, what you find is that it used to be what we call as the capitation fee colleges, very high fee but low-quality engineering education or medical education was provided. But that is not the case when you’re talking about the universities. There are some of the private universities that have come up in the past 10 years or so, which are very high quality and can compete with the best universities within the country.

AU: What caused that two tier approach? Why did private colleges explode in the sort of 1980s and ‘90s? But in 2000 there was a pause to allow private institutions into the university sector until 2004-2005, somewhere around there. Were there specific policy decisions there? Were there hinges that made people say, “now this is the time we can let private institutions into the higher tier sector?”

Dr. Varghese: There was a great demand for engineering, technical and professional education but the seats available in the public sector institutions were rather limited. There was an expectation that industrial development will require a large number of technically qualified, professionally qualified, technologically oriented workforce. This was one of the reasons at that point of time to permit private institutions, I will use the word capitation fee colleges, these capitation fee colleges in the private sector that came into existence in the 1980s. At the same time, they were affiliated to a university, so they did not have the freedom to have their own syllabus, their own courses, their own programs, unless it is approved by the university, which is a public institution. So, in 1995, there was a bill presented to the parliament in India whereby private universities could be permitted. But unfortunately, the ruling party did not have majority in the parliament, and it was subjected to discussions and the deal could not get passed in the parliament. After five years, the bill lapsed. In 2001 and 2002, many of the state governments took up this issue and they passed legislation in their own state legislatures to start private universities. Although many of the contents of the bill were like that of the national bill, but these are passed by the state legislature. There is no national decision that is taken to have private universities, but the state or the provinces were given that freedom and they have started the universities, so it’s a arrangement, a friendly, settled, negotiated arrangement.

AU: Does that mean that there are geographic differences within India in terms of the distribution of private institutions? Are they more common in some parts of the country than others? And if so, which ones?

Dr. Varghese: To start with the private colleges, you’ll find that the southern states are dominating. Say, for example, the southern states like Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, Puducherry, and the western state of Maharashtra are the pioneers in the field of establishing private higher education institutions. In terms of the universities, I cannot clearly deliver such a pattern, but you find that northern states also equally participated in the establishment of the universities. But of course, these are not in the city per se, but these are in the suburban areas or areas closer to the cities so that they get better larger number of students, and economically, they become viable.

One point that is to be noticed is that most of the universities are established by corporate giants. They are not concerned immediately like the immediate returns whereas in the colleges, they were looking for immediate returns. There is a difference in the attitude towards revenue generation. Moreover, many of the private institutions established by the big corporate sector, they are looking for higher levels of ranking, both global and national ranking. They are fighting to establish their legitimacy as academically oriented, research oriented, high-quality higher education institutions.

AU: Interesting. I know you said that the private universities are regulated at the state level very often, but in some ways, India has a national system of higher education. It has a national plan for higher education, the National Educational Plan (NEP). Obviously private institutions aren’t subject to government planning in the same way as public ones, but how does the NEP frame the role of private institutions? What are the expectations of them? Are they simply about absorbing increasing demand, or are they expected to grow their position within the university research system as well?

Dr. Varghese: Private institutions were mostly teaching institutions. They were rarely research institutions in India. This was a situation when private colleges were increasing or proliferating in India. However, this situation changed dramatically when we started setting up universities. Many of the private universities do encourage research. One of the reasons, which is not a stated reason, but one of the reasons that is that they want to improve their level of their status or their number in the ranking system. For that, they to have research and publications in the scopus-level publications, in the magazines, or institutions and academic journals are very important, so they do research. This was not the case in the earlier situation. Another dimension that you also find is that when you’re talking about the private higher education institutions, they really are in a position to give diversified courses. Since I told you that earlier, this was not the case. They can offer only courses which are approved by the university to which they are affiliated. Now there is a diversification of the courses and new courses, which are coming, which are demanded by the employers, etc. I find that those who are coming out of the elite private institution, they do not face unemployment. Let me also say that those who are coming out of the elite public institution, they also do not face unemployment. Unemployment is systematically transferred. The incidence of unemployment is systematically transferred to those graduates coming from lower-level educational institutions, low-quality educational institutions, which are attracting students from lower-level socioeconomic backgrounds.

AU: In keeping with issue about outcomes what kind of oversights do private institutions have and is it different for the colleges and the universities? Are some states tougher on these colleges in terms of quality assurance than others, or no? Broadly, what’s the quality assurance regime that private institutions face in India?

Dr. Varghese: There are two types of arrangements. One is the accreditation and quality assurance. That is of a recent origin from 1994 onwards. The other is the University Grants Commission. All the colleges and the universities in India work within the regulatory framework of University Grants Commission whether it is private, unaided, aided or granted, there is no difference. Otherwise, their degrees will not be approved, accepted, or recognized. The other one is that the regime of quality assurance. We started quality assurance agencies in 1994 and what is called as National Assessment and Accreditation Agency located in Bangalore city. Unfortunately, very few institutions, only one third of the universities, and less than 20 percent of the colleges are accredited as of now. So, accreditation is not spread to the majority of the institutions in India.

At the same time, there are efforts that were made in 2015 16. UGC, University Grants Commission brought out a stipulation that unless you are accredited, you will not be given any public resources for the university. But what is less understood is that out of the 45,000 colleges in India, only around 12,000 to 13,000 colleges get any financial support from the UGC. So even if they do not accredit, they cannot be controlled or they cannot be regulated through the financial arrangement, so that is something. We have not taken a position saying that if you are not accredited, your degree will not be accepted. If you come to that stage, that will be the binding point to get all the institutions accredited.

AU: I want to focus now specifically on a few key areas of education where the private sector is playing an extended role and maybe even a prestige role in higher education. a lot of it is in technical fields. Specific universities are set up in fields like management, health, medicine, and private higher education is playing a significant role in the marketplace. Has the impact of private higher education institutions been good or bad for the sector in these areas?

Dr. Varghese: I’ll not be able to give a clear-cut answer to that question, but I can tell you one or two dimensions of the question as an answer in responding to your question. One, the private higher education institutions are proliferated. I am using the word proliferated in the areas of engineering, management, and medical less when compared to other two. I have a book on private higher education in Africa. When I go to Africa and study there, most of the courses which are started are in the low-cost courses in the humanities. But in India, the private sector was dominating the areas which needs heavy investment, like engineering and medical, et cetera. So, this is one change that you find in terms of different countries. But within India, what you find is that many of the colleges, especially engineering colleges produced graduates who could not be employed. As a result of that, in the past decade, and even in this decade, what is happening is that many of the private colleges are not getting enough students, engineering colleges are not getting enough students. We have a state in the southern part of the country, which is called the state of Tamil Nadu, where many engineering colleges are closing due to lack of students. However, the rush for the competition to get into prestigious Colleges in the public sector, in engineering and medical are very high and the selection ratio is about 1 to 42.

AU: These institutes of eminence that the government of India has been putting out, some of these institutions are really interesting. You’re starting to see in India a move from run of the mill institutions towards really elite institutions in a way that privates don’t play much outside of, say, the United States or Japan or Chile. I’m talking specifically here about institutions like O. P. Jindal University or Manipal University or the Saveetha Institute of Medical and Technical sciences. These are institutions where some of them are less than 20 years old, but they’re playing in the top thousand institutions in the world according to ranking institutions like the Times Higher Education supplement. How have they done that? That’s an amazing feat. Has this really all been done just using fee income? Or are they also getting infusions of cash from philanthropists or corporate funders as well?

Dr. Varghese: I think that is a very important change I indicated earlier. When you’re looking at these universities, they are not surviving on the basis of the student fees. If you go to any of the campuses, you’ll find the campuses are very large. Buildings are so many. Hostel facilities for the students, residential facilities for the students and faculty are excellent. They also promote faculty members to go and participate in the seminars, et cetera. This level of expenditure cannot be met from the students. They have a more long-term perspective. Unless they survive for 10 or 15 years, I don’t think that they’ll be able to recover the cost. So, this is just opposite of what used to happen in the capitation fee colleges.

So, this money is not coming from philanthropy. Most of this money is invested by the corporate sector itself. So, corporate sector sees the good educational university as improving their prestige, the prestige of their company and the prestige of their corporation, so O. P. Jindal you mentioned, Jindal is a very renowned industrialist in the country. By O. P. Jindal becoming one of the top-ranking private universities in the country, and one of the top-ranking Indian universities in the global ranking, it not only enhances the prestige of the college, but also the enhances the branding of their industrial sector. So, from that point of view, their investment is for prestige. Their investment is basically different, not for revenue generation per se. That doesn’t mean that it is cheaper. It’s very expensive for the students and they levy heavy fees, and they will be generating this income and over a period of 10 or 15 years they’ll be able to recover the cost, unlike in the colleges where they were looking for recovering the cost within a year.

AU: Who is attending private universities? I get the impression that it’s again, these are two tier institutions and so they’re geared at two different markets. The private colleges might be geared a low-income market at people who don’t have the ability to attend public universities or private universities so that tends to be a less elite socioeconomic class. Whereas these top private institutions, they might not be able to track the very top students who are destined for IITs but they’d get the next level down. Is that right? Are those the clear markets that they’re looking for in terms of undergraduate students?

Dr. Varghese: I think if you make a classification, if you’re talking about aided sector of the private institutions and colleges, the students who are coming are very similar to the students who are coming to the public institutions. There is not much difference. But there are some colleges which are more prestigious where they attract more elite. But if you are coming to the university sector, certainly you will find that those private universities are attracting need not be the best students, maybe second best who did not get admission to the prestigious public institutions like IITs, etc. But secondly, their pockets are quite thick, or in other words, their financial resources are quite a substantial. So, they can afford a higher-level fee. They can buy education. They can buy education even when they are not the best students coming. But this does not mean that the prestigious institutions in the private sector are attracting only low qualified students. That is not true. But one trend that you can notice for a period of time is that the public institutions and colleges have become a parking place for those students who are from the low socioeconomic background opting for arts and humanities, and those students who used to come for sciences and engineering are being attracted towards the private universities.

AU: And that’s because the private universities charge a fee high enough that their facilities are actually better than those in the public institutions?

Dr. Varghese: Not only facilities. If you say that you are from one of the prestigious private universities, that degree carries a higher labeling brand than you get from a lower-level public institution. What is the premium that you get in the labor markets? Or what is the passport it provides to go for studies abroad? That becomes an important dimension of the individual or household choice for places and types of institutions.

AU: I was quite interested when I was looking through websites that every institution, every private institution anyway, could tell you not just what their fees were, but what the average graduate salary was, which I thought was quite interesting.

Dr. Varghese: But many of these institutions do have what we call as the campus recruitment. Suppose if you’re doing engineering, by the time you complete four years of engineering, the big companies will come. It’s the same thing happening in IITs also. In IIMs, management institutions have a system of company recruitment or placement. So, by the time you reach the final year, halfway through, they come to these campuses, and they will be in a position to recruit the people and based on the performance of the students in the interviews for these types of jobs, they will find that the salaries are also given at varying levels. Some students get very high salary. Other students from the same institutions may not be getting that level of salary. So, there is a premium attached to labeling and there is also a premium attached to the assessment regarding the personal abilities or capacities of the students as revealed through the interviews.

AU: Now, in many countries, the private higher education sector is seen as the one where educational innovation is most likely to happen. They’re freed from constraints with unions, government rules, those kinds of things. So, they can iterate rapidly. They can try new things. Is that the case in India? What if any innovation is happening in these private institutions and are public institutions paying attention and copying it?

Dr. Varghese: If research is not part and parcel of the university culture, what we call us innovations does not have meaning. Most of them are only imitating. In 2017, the Government of India decided that we will have world class universities. Then the term was changed to institutions of eminence. We have 20 institutions of eminence, 10 from the private sector and 10 from the public sector. So, these institutions are the elite institutions and public funding is given to the public institutions for 10 out of this 20. They are doing many innovations, research, and other things. The private institutions, especially the colleges, they are teaching institutions, and I don’t think that any innovation is taking place other than pedagogical changes in terms of the curriculum transaction, not in terms of knowledge production.

AU: My last question to you, if we were to do this this interview again in 20 years from now, what do you think you’d be telling me about Indian private institutions? Will the sector be bigger or smaller? Will elite institutions be out competing public ones or not? What’s the likeliest state of the sector in 2044?

Dr. Varghese: If the same trend continues, one can very confidently say that the private institutions will be advancing faster, providing better quality education because the number of private institutions which will be giving high quality education will be increasing. Whereas in the public sector, such increase may be rather slow. I’m not saying that the best institutions will disappear because there is also a trend or tendency by the present government that we establish IITs every year. Many of these newly established IITs do not have faculty members and they’re not in a position to provide the quality education that the traditional IITS used to provide. What is to be understood is that the corporate sector has money in India. They have the capacity to invest and now they are having a willingness to invest. Not that they did not have money earlier, but now they have a willingness to invest because of two reasons. One, the rules and regulations have been simplified. Two, they also find that investing in a university is investing in a prestige. So, they are not looking to the universities for profits and revenue generation, but for increasing their visibility, their credibility, and academic interest.

AU: Dr. Varghese, thank you so much for joining us today.

Dr. Varghese: Thank you very much.

AU: It just remains for me to thank our excellent producers, Tiffany MacLennan and Sam Pufek, and you, the listener, for tuning in. If you have any comments or suggestions for future episodes, please do not hesitate to get in touch with us at [email protected] . Join us next week when our guest will be Phil Hill of Phil Hill and Associates, who is my absolute go to source for educational technology news. He’ll be joining us to talk about a number of recent developments in the ed tech space, not least of all the ongoing collapse at online program management firm 2U. Bye for now.

*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service.