Transformation of Indian Higher Education: Noting The Signs of Change

For those who felt change is always slow and cumbersome in India, the recent move by the Indian government to annul the Rs. 500 and Rs 1000 notes overnight should be a clear sign that things have changed. Indeed, there are certain things which never change - the implementation was poor and thoughtless and the bewildering array of tinkering that came afterwards demonstrated the jugaad mentality - but Chinese-style decisive action may have now become politically fashionable.

This may give hope to those who thought India would open up its Higher Education sector eventually. There has been a bill, drafted and redrafted several times but never acted upon, to this effect dating back to 1990s. Various governments since then expressed its intention to make the Indian Higher Ed competitive globally, but in reality, had done the opposite. While India expanded its Higher Ed capacity significantly since 2006, creating a few thousand seats every day on average, the sector remained steadfastly parochial, corrupt and disconnected from global realities.

This is a tragedy if one considers the demographic and demand factors.

India hit a point of demographic advantage, with 2.1 million people turning 25 every single month in India. This made it the fastest growing Higher Education market in the world, with almost a quarter of the prospective students for college level education globally. Poor education made real the Confucian double threat: "Learning without thought is labour lost; thought without learning is dangerous."

Because of the demographic advantage, India is also poised to offer a quarter of world's new workers, about 25 million every year. And, yet, its very own IT service industries, caught in global recession, and threatened by increasing automation of what used to be called 'knowledge work', were poised to lose too many jobs. By some estimate, three-quarters of new service sector jobs in India, the ones that sustained the creation of the 'new middle class', are under threat of automation. And, while the talk is of 'moving up the value chain', the strengths that helped create the IT services industry - abundant pool of cheap manpower available for back office work - are precisely the weakness that prevents such a move.

The Indian students going abroad, given the rising aspirations and poor state of Indian Higher Education in general, is growing, though it was severely disrupted by the anti-immigration sentiments first in Australia (2007-8) and then in the UK (2011 onwards), two of three most popular destinations. However, despite this, the number of students travelling abroad for education is growing at almost 18% a year, and currently stands at 360,000 a year. Only China, with 700,000 students annually, has more students looking for global education (To put this in perspective, China's Higher Ed sector is nearly the double the size of India's in terms of number of students, the per capita income in China is about 5 times that of India and a number of foreign institutions have campuses or collaborative arrangements in China but almost nothing in India). 

While India set itself on a path to create an open global economy, starting with structural reforms more than two decades ago, its insistence on a closed Higher Education system, which has become out of step with the rest of the world and decidedly anti-innovation, is inexplicable. The only explanation why things are this way can perhaps be found in the lobbying power of the 'Education Barons', the large, mostly South Indian (but not exclusively) College groups that would go any lengths to keep the market to themselves. 

These groups were enormously powerful, not least because these colleges were effective licenses to print money. India, because of the demographic factors, is a sellers' market in education. It is also a market which combined excess demand with state regulation of fees that could be charged, resulting in a thriving black economy where the families would pay extortionate 'capitation fees' (or, once this was made illegal, some other form of payment) to send their children to college. The phenomena was well known and indeed the corruption was at all levels - a former Head of Indian Medical Council, which controls the Medical Schools across the country, was caught accepting a cash bribe from one of the colleges wanting to expand capacity - but these colleges controlled the politics through their money. Often, indeed, the college owners are the politicians, and vice versa. 

However, this may be finally changing. When the government annulled the high denomination notes, these colleges were among the most affected: The very fact that it could even be done indicates a political shift. One could speculate about a weakening of the private education business in India: The low employability (about 18% for Engineering graduates), competition from different states (private engineering colleges and universities are no longer a monopoly of South Indian states), the demographic shift within India (with North and East having younger population, and South Indian population gradually ageing) and the weakness of the Indian IT services industries may all have contributed to the position. 

The neglect of Higher Education has affected an entire generation of Indians, and the current government's mandate is, implicitly, to improve their lot. This may now happen. There are conversations in India about ring-fencing the profitable sectors, like Engineering and Medical Education, for domestic players, but allowing the Foreign Universities to offer courses in Basic Sciences and Liberal Arts. This may not be the ideal solution, but could be an important first step towards opening up an arcane and inward-looking system. There is also another idea, floated by the Indian Commerce Minister recently, about allowing Foreign Universities to open from Special Economic Zones, more like the UAE model (expect some 'Academic Cities'). This could work too, and there are some obvious candidate cities, like the upcoming city of Amravati, being built to become the capital of newly structured Indian state of Andhra Pradesh. The government's intention in transforming the education sector in general is evident in its efforts to get a new education bill passed (after a thirty year gap) and in breaking the monopoly of some professional organisations, like the Institute of Chartered Accountants of India (ICAI) or Indian Medical Council, on respective professional education areas. The current government, though socially conservative, is perhaps more aware than the previous ones about the middle class consensus that got it into office (and which can, in time, drive it out of it) and as a result, acutely keen on jobs and education that leads to jobs.

Overall, there is an opening - even if just a sliver of it right now - and a possibility of rapid transition of Indian Higher Ed sector. We have heard this before, but this time, it is more solid than it ever had been. The institutions in UK, which have more or less given up on India, because of the failed expectations, and Indian students, because of UK government's single-minded persecution of them, should now wake up and prepare to re-engage. And, indeed, they may need a different set of strategies than they used in the past: The usual institutional visits to Indian colleges, which had failed to yield any returns, intellectual or financial, now need to be abandoned. The Indian government is likely to depend on private initiatives to reform the Higher Ed sector, and it is likely that Indian companies and industrial groups would be the prime sponsors of the new projects involving foreign universities. This is a different kind of conversation, though not without precedent. But, this, a new institution-to-business conversation, may open up the world's most exciting Higher Education market for the UK universities, just as they ponder their options in the face of a sudden exit from European Union.


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