PRIVATISATION OF HIGHER EDUCATION IN

INDIA

The role of education in development of nation is well established.

Investment in education for human resource development has a multiplier
effect on the utilization of all other available resources leading to sustained
economic development of country. In fact the road to development is
through its education system and if we compromise on education at any
level, it is likely to jeopardize the socio-economic developments of the
country {Desai, 1995}. In countries like India, education is seen as a process
of empowerment, through the imparting of knowledge, skills and values to
the individuals and as an instrument of social change providing opportunities
for upward social and economic mobility {Powar,1995}. Of all the levels of
education., higher education plays the most important function of supplying
a wide variety of manpower required for different sectors of economy. In the
present globalized set up, dependence on the system of higher education is
expected to increase exponentially in all types of economic systems.
Consequently, there is an urgent need for serious efforts to improve the
quality of higher education in order to achieve sustainable growth and high
quality of life for all.

Independent India inherited a system of higher education as an integral part

of the colonial set up which was not only quantitatively small and
microscopic but was also qualitatively anemic in relation to the tasks of
building a growth oriented economy and a forward looking society. The
educational planners of independent India did not take much time to
recognize the bi-directional linkages between education and economic
development. Considerable emphasis was placed not only on rapid
expansion of elementary education but also on simultaneously strengthening
higher education in order to meet the requirements of high level capabilities
in the process of development. As a result higher education in India has
expanded very rapidly in terms of number of universities and enrolments.

However few developments in recent past have posed a great challenge for
the higher education sector in India. The shrinking capacity of the state to
support higher education, permission to foreign universities and institutes to
establish their branches in Indian territory under the provisions of GATS ,
changing role of markets , need for new sets of skills and competitive ability
in the context of globalized national economy etc. indicate unequivocally the
tough time ahead for the system of higher education in India. Given these
challenges, in present paper an attempt is made to examine the trends
towards privatization of higher education as a result of economic reforms ,
its rationale and impact on the society and economy of India.
 ECONOMIC REFORMS AND TREND TOWARDS
PRIVATISATION OF HIGHER EDUCATION

Since the beginning of 80’s, modern economic reform policies have been
unveiled in several developing countries in form of structural adjustment
programmes, associated with the IMF and World bank. The economic
reforms policies of the Bretton wood institutions and privatization are rightly
felt to be synonymous and movement towards privatization has become the
most significant agenda of World bank in particular (Richardson and Haralz,
1995). Until the end of 1970’s or early 1980’s ,the concept of welfare state
used in modern Economics probably consistent with appropriate role of
government to take care of market failures and to perform welfare functions
in the social sectors in order to improve upon the quality of life of the
masses at large. But the 90’s brought a complete swing of pendulum in
which social democratic values and welfare state concerns were replaced by
totally free market philosophy (Tilak,2005). The shift in development
paradigm started taking place in developing countries from a paradigm
based on Keynesianism to a neo liberal paradigm under which private sector
assumed the center stage. This philosophy entered the education sector as
well, more strongly the higher education sector. Accordingly, a reduced role
of state more explicitly in higher education , was advocated as an
economically and educationally efficient proposal while the role of
government relegated to the formulation of policy frame work .thus the 1990
‘s witnessed government’s apathy to higher education and its privatization in
various forms resulted in a turmoil in this area. Infact this decade began with
the Jometian Conference on Education for all. An important outcome of
conference was that basic education received serious attention of the
national government’s and international community. It was widely felt that
basic education goals could be achieved only if resources are diverted away
from secondary and higher education. As a result, either higher education
was ignored or special measures were initiated to reduce the intensity of
public efforts in higher education.

This happened in India at a scale more than that in many other countries of

South Asia. To justify the stand, the Government of India in 1994

declared ,“The higher education system in the country is now sufficiently

developed to meet nation’s requirements. The unmet demand for higher

education is not considered economically viable”. Subsequently, higher

education was described as a ‘non-merit good’ resulting in a drastic

reduction in public funding of higher education.

The Government of India appointed two committees – one on central

universities under the chairmanship of Justice K. Punnayya (UGC, 1993)

and another on technical education institutions under the chairmanship of D.

Swaminadhan (AICTE, 1994) to outline methods of mobilization of

resources for higher education. Both these committees emphasized on the

importance of state financing of higher education and argued for a

commitment on the part of the government to finance higher education and

also suggested some measures

to mobilize non-governmental resources for higher education. The

recommendations concerning the government’s commitment to finance

higher education were almost ignored. However, the recommendations

related to mobilization of non governmental resources were accepted as they

were in conformity with the policy of withdrawal of subsidies.

A private universities Bill was also introduced in the Parliament in August,

1995 to pave the way for establishment of self-financing universities. This

Bill is still pending in the Parliament and UGC has already passed a new

Regulation for establishment of self-financing universities resulting in

setting up of a large number of private self-financing universities all over the

country. Now we have a strong parallel sector of quite expensive higher

education in a variety of courses.

In the context of new economic policies, funding of higher education from

government sources is drying up with the major commitment of the

Government directed towards primary education and eradication of

illiteracy, higher education would be taking a back seat in the matter of

funding education. Presently, higher education has been labeled as a private

good on a global scale. The WTO has signalled an intention to develop

binding policy regime in the form of GATS that is facilitating unrestricted

flow of educational services across borders. Therefore in coming years

higher education is likely to be a major testing ground for the ability of

national governments to retain a degree of control over activities such as

education that are identified as social sectors (Swami, 2005).

Even though private higher education is nothing new, yet very rapid growth

of private colleges and other institutions for professional higher education is

a phenomenon of last decade. Government is playing not merely a catalytic

role, but a highly encouraging role in this regard (Tilak, 1995). Therefore it

becomes important to examine the justification for these emerging trends.

How far these trends are justified ?

Generally, it is argued that it is both imperative of economic conditions and

desirable in view of efficiency and equity that a proper sharing of cost of

higher education is made between the institutional and individual sources.

The propagators of privatization of education argue that cost recovery from

students is necessary to reduce the regressive effects of indiscriminate

public. This happened in India economic costs to the society and hence

further adds to the already existing socio-economic disparities in our country

{Kothari, 1986}.

While promoting the policy of privatizations of higher education, the

interdependence of various levels of education is ignored. We know that the

primary education provides inputs into the secondary and higher education

and the higher education in turn produces teachers, administrators and others

for school education. There is infact the need for a well coordinated and

comprehensive government policy embracing all the levels of education.

To answer the argument that higher education should be left to the free play

of market forces, it is contended that these forces in the developing countries

like India are imperfect. The expected results are far from perfect and infact

in some areas are disastrous (Chatterji, 2005). It is very likely that in near

future these countries face excess supply of certain skills while shortage of
people with basic sciences and humanities on the other hand and hence the

market cannot take care of such imperfections (Chalam, 2003).

Our traditional universities and other public sector institutions of higher

education are concentrating on fundamental research and on the

dissemination of knowledge that takes care of the long run interests of the

society and economy. By starving these institutions of funds, the policy

makers seem to be ignoring the relevance of these institutes. Private higher

education institutions focus on selected skills and thus help to provide the

developed world with ‘reverse subsidy’ in the form of cheap and highly

skilled labour force (Chalam, 2003). Further more, this trend of

concentrating upon few areas only such as management and IT has resulted

in brain squeeze in our own country.

We all know that privatization of higher education infact means cost based

fee structure which results in huge profits for the investors who invest in

education with a purely business motive unlike the past traditions when the

philanthropists established such institutions from a noble and charitable

point of view. Charging fees beyond the capacity of even the middle classes,

may head us for a future of greater polarization of education in our society

than even exists today (Desai, 1995). This will go contrary, to the idea of

using education as an equalizer by providing opportunities to the

disadvantaged groups to move out of their unfavourable socio-economic

position. By allowing only a few years of free elementary schooling, we will

only be creating “children of lesser gods” (Goswami, 2005).

Presently, India with nearly 300 universities and 16,000 colleges has only

7% of the relevant age group entering higher education institutions. This has

to be augmented to at least 25% by 2020 for achieving the status of a

developed nation. However the privatization of higher education with its

accompanied huge hike in education cost will make achievement of this

target almost impossible. We must keep in mind that developed countries on

the other hand with more than 50% of the relevant age group in university

level education, are moving towards mass higher education. In this scenario,

where do we stand?

Thus the move towards privatization of higher education is likely to cause

various socio-economic ramifications for our country. But there is no point

in only lamenting the crisis and constraints. We must move beyond and

explore the alternatives.

Given the paucity of resources with the government and its commitment for

free primary education, efforts should be made to provide quality education

in government schools at primary and secondary levels, so that the students

from low strata of population can successfully compete with the students
from elite sections of the society who can afford expensive public schooling.

A moderate degree of privatization of higher education with due regulation

of standards and infrastructures provided is useful and desirable as well, but

the public sources should account for a large proportion with a government-

commitment to impart quality higher education. At least 6% of GNP should

be allocated to education sector with reasonable share of higher education

being financed by the government due to its unique role in the process of

economic development. Financial assistance should be provided to the

students from the weaker sections of the society either in the form of

scholarships or education loans at a reasonably low rate of interest.

Universities and other government institutions of higher education should

explore avenues for self-financing and mobilizing resources on their own so

that they can generate adequate funds for updating and upgrading services,

instead of being a mere drag on the public exchequer.

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