Higher Education

System: Impact on
Indian Economy

BY :
ABHISHEK KUMAR SINHA
PGDM B18
9/20/16

64

Falling standard of higher education is alarming:

- President Pranab Mukherjee
President Pranab Mukherjee expressed
concern over the falling standard of
higher education in the country even
though he said the proliferation of
private sector has led to greater access.
"Some private institutions have ably
complimented the efforts of the public
sector institutions in meeting the high
demand for the tertiary education of our
society"
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Source : THE ECONOMIC TIMES , JAN 18,20

 He added that private institutions account for about 60 per

cent of students enrolled in higher education.
Stating that there were only 20 universities in 1950,
Mukherjee said today there are 712 universities in the
country and the number of colleges has increased from 500
to more than 36,000.
"Though (private sector) proliferation has led to greater
access, its negative fallout on the standards is alarming. Its
declining quality for standard, particularly in the areas of
higher learning...
"... if not reversed quickly, we will land ourselves in a
scenario of having a large number of people with degrees
but not enough manpower with proficiency to meet the
emerging requirement of our industrial and other sectors,"
Mukherjee said.
He
cited the example of ancient Indian universities like
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THE MARKET :
With a median age of 25 years, India has over 550 million people below the age of 25
years. According to Census figures, over 32 per cent of the 1.1 billion population is
between the age group 0-14.
This means that the number of people in India needing primary and secondary
education alone exceeds the entire population of the USA. Since these students will be
seeking higher education in India over the next decade it illustrates the sheer size of
the Indian education market.

Presently about 11 million students are in the Higher Education system. This
represents just 11% of the of the 17-23 year old population. The government hopes to
increase this to at least 21% by 2017- a target which still falls short of the world
average.

With the emergence of India as a knowledge-based economy, human capital has now
become
its major strength.
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DEMAND-SUPPLY GAP :
only 1 out of approximately 150 applicants gets admission into the
elite Indian Institute of Management (IIMs) compared with the ratio
of 1:10 for MIT.
It is therefore not surprising that an industry chamber has recently
reported that 450,000 Indian students spend over USD 13 billion
each year in acquiring higher education overseas.
To reduce the demand supply gap in school education, it has been
proposed in the 12th FYP (2012-17) to set up 6,000 schools at block
level as model schools to benchmark excellence. Of these, 2500 will
be set up under Public Private Partnership. Further, easy availability
of education loans to students it has been proposed in Budget
2012-13 to set up a Credit Guarantee Fund for this purpose.
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POLICY REGIME :
100% FDI in education allowed through automatic route.
A high-powered advisory body - National Knowledge Commission
(NKC) set up
NKC recommendations tremendously successful in increasing
Governments focus and plan outlay on education.
NKC has recommended that the number of universities increase
from the present 370 to 1500 by 2015, considered a highly
ambitious target, but inadequate to meet demand for quality
education.
For higher education, an expenditure of USD 37.13 billion has
been projected to achieve the proposed objectives during the
12th Five Year Plan (2012-17)
In9/20/16
December 2010, AICTE notified regulations for grant of

SERVICES IN THE EDUCATION

SECTOR :
There is a vast opportunity for provision of innovative
services. Given regulatory constraints, lack of
infrastructure and severe competition for quality
education, there is a large and rapidly growing market for
coaching and tutoring services imparted through new
and innovative means, particularly the internet. In
addition corporates are increasingly outsourcing skill
training activities to specialised institutions

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Dr. MANAS DAS (Retd. Prof.,IIM

CAL.)
Falling standard of higher education is of prime concern, no doubt. But
one should go to the source. Firstly, everybody in India seems to think
that higher education should be accessible to everybody, irrespective
of his/her performance in school leaving examinations. This is an
absolutely faulty policy and is resulting in unemployment of students
with degrees from colleges for whom awarding degrees liberally is a
money making racket. In institutions of higher education, the
Chancellor does not require any mandatory qualifications, there is no
Vice Chancellor, no Director, no worthy faculty, the faculty who cannot
teach is the Dean, and the students are of commensurate quality.
From admission to academics to placement it is a money spinning
process and a money making racket. Given this scenario, how can we
expect any quality in higher education?
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SCORING HIGHER ON
EDUCATION :
India is a global leader in terms of GDP spent by public and private
sources on higher education. India devotes a very high proportion of
its national wealth on higher education. At 3 per cent of the GDP (1.2
per cent from public and 1.8 per cent from private sources), India
spends more than what the United States (1 per cent public and 1.6
per cent private) or Korea (0.7 per cent public and 1.9 per cent
private) spends on higher education.
The gross enrolment rate the proportion of the age group
accessing higher education of 18 per cent is among the highest for
countries at Indias level of development. This is particularly
impressive given Indias size and complexity. The recently approved
12th Five-Year Plan aims at raising the gross enrolment rate to 25 per
cent by 2017, which is both desirable and achievable.
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India with its 600 universities and

35,000 colleges is the third largest
education system in the world. But
68 per cent of these universities and
73 per cent of colleges are found to
be medium or low quality by Indian
standard itself.

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SPEND MORE ON HIGHER

EDUCATION :
The position of Indian universities has consistently been
falling year after year in almost all international
rankings. For instance none of the Indian universities
figure in the latest (2015) Time Higher Education (THE)
ranking of the top 100 world universities under 50 years
old. In the 2012 rankings of 400 universities India had
just one university compared with nine of China. Last
year, India was the only BRICS (Brazil, Russia, India,
China, South Africa) nation that did not have a single
university among the top 200 on the Quacquarelli
Symonds (QS) list the most reputed global rankings
of institutes for higher education. Even our high-profile
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IITs and IIMs fail to match international standards of

 Steps should be taken to reduce the disconnect between higher

education institutions and industry requirements. The
possibilities of private sector contributions in higher education
should be fully exploited.
The recent decision of UGC to allocate funds for studies with
potential to hasten the countrys progress is a welcome step.
As president Pranab Mukherjee said, Indias priorities for
research and innovation should be conditioned by our socioeconomic realities. The Indian innovation strategy should focus
on generating ideas that promote inclusive growth and benefit
people at the bottom of the socio-economic pyramid.
Our higher academic institutions should play a vital role in
inclusive innovation. They should mentor grassroots innovators
for development of their ideas into useful products
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CONCLUSION :
Upgrading the higher education sector especially in terms of patents filed
and cutting edge research output is essential in improving Indias global
ranking. Our sustainable economic development depends on human
resources.
A quality higher education base is essential to reap full benefits of our
demographic dividend. In its mission to redress inefficiencies in higher
education, the strategies of the 12th plan focus on technical education,
distance learning, quality research, infrastructure, faculty and curriculum
content.
The 12th Plan provides a good framework for change. It seeks to align
Central government investment with that of the State governments align
new capacity with demand. It also seeks to create a performance culture
through deepening of competitive grants and creation of related institutional
arrangements. However, success depends on effective implementation.
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THANK YOU

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