Recently I read that India annually produces the largest number of Ph.D degrees per capita. No source was given, so I haven’t been able to check whether this is true. Especially because this is being expressed per capita, it seems unlikely. But India does produce a large number of Ph.Ds and we never tire of boasting about the strengths of the Indian educational system. For the moment, I have higher education in mind. We have 7926 colleges that provide general education. Two thousand two hundred and twenty three colleges provide professional education. And there are 254 universities, deemed universities and institutions of national importance.

There seems to be a problem with obtaining precise figures on higher education. But let’s juggle around a bit with figures. Across all streams, how many students do you think a college can handle? One thousand should be fine and 10,149 colleges (7926 plus 2223) should then be able to handle 10,149,000 students.



How many students should a university be able to handle? On an average, 5000 should be manageable. Even if I ignore some deemed universities and institutions of national importance as smaller entities and assume the number of proper universities as 238, that’s still 1,190,000 students.

Now 10,149,000 plus 1,190,000 is 11,339,000 and that falls short of 7,730,800 students enrolled in institutions of higher education. UGC or AICTE may choose to correct the precise figures I have cited. But ipso facto, there is no shortage of seats for higher education and, remember, we are adding new colleges and universities every year.

At this time of the year, try telling that to parents and students. Okay, we may have problems with CBSE (or state boards or ICSE) systems of evaluation and even with course contents. Despite this, a student who gets 75 per cent is unquestionably good. How come he or she is wandering around in desperation, not able to get admission? How come there are capitation fees? Capitation fees are nothing but bribes and bribe is only paid when there is shortage. Therefore, the answer to capitation fees is not court intervention, but removal of shortages. And remember, there is no overall shortage. There is shortage of good quality educational institutions.

How come more than 74,000 Indian students are headed for the US? India is the largest exporter of students to the US now, having overtaken China. Notice that in these students, there is a sizeable chunk of under-graduates also. Aid is difficult at the under-graduate level. So these are students who often finance their own education, having failed to secure admission in good quality educational institutes in India.

How will you ensure good quality watches at affordable prices are produced in India? There was a day and age when we thought this could only be done through the public sector. There was also a time when we thought we should monitor costs and prices charged by private companies for everything under the sun.

Thankfully, we now appreciate that such attempts are dysfunctional and competition and market forces are enough. How is watch production different from providing educational services? Why should we then not throw open higher education to the private sector? You will argue that higher education is already open to the private sector. Not quite. It will be truly open if we stop trying to regulate tuition fees and faculty salaries.

Other than court intervention, that’s precisely what UGC and AICTE Acts try to do. Ditto for universities set up outside the UGC framework. Haven’t we given up the idea of trying to regulate salaries of management? Why should there be centrally determined pay scales for teachers? Shouldn’t a college/university have the freedom to contractually decide what it pays a faculty member? This is a principle we generally accept. What is special about higher education?

Let’s truly throw open higher education to the private sector and this should include the foreign private sector. We don’t need entry barriers like recognition from UGC or AICTE. Today, students who head abroad belong to the better-off sections of society who can afford loans. Isn’t it better to broad-base this access by allowing better foreign institutions to function in India? The shady ones are already here and students who don’t know any better seek admission there. If you are with me so far, let me upset you by arguing I don’t think we need to look upon education as a non-profit making exercise. Many arguments advanced against private sector entry are false.

Market-determined tuition fees don’t mean the poor will be deprived access. Globally, private universities have scholarships that cross-subsidise the poor. To establish credibility, the private sector also needs to attract good students. Loans are possible.

In general, the private sector also has lower administrative costs. We can also have government-financed scholarship schemes for the poor. This is different from arguing that tuition fees should be low for everyone.

Nor does private sector entry imply end of regulation. But regulation is distinct from control. There should be clear disclosure norms for all institutions of higher education. Where does the money come from? What is it spent on? What is the educational background of students? What is the placement record? We do have problems with what balance sheets actually reveal. Subject to this caveat, this is a bit like arguing that educational institutes must have proper annual reports and balance sheets. This is important because education is one sector where there is asymmetry of information. With such mandatory disclosure, external agencies (not UGC or AICTE or other government agencies) can begin to rate educational institutions. There are indeed such attempts. But those aren’t exhaustive, and in the absence of complete disclosure, are also incomplete.

Eventually, we will probably have centralised exit exams like SAT or GRE and these records will enable students and parents to judge institutions. Competition law has clauses on unfair trade practices. These too must be applicable to education, with efficient redressal mechanisms.

In future, those 74,000 students should stay in India and we don’t want suicides after IIT entrance results are out.