India Transformed

by Rakesh Mohan

  While the private sector’s role is undoubtedly important where private rates of return are high, this has led to underinvestment in areas with high social rates of return. In other areas such as medicine—with both high private and social returns—the number of seats in medical colleges rose from 19,745 in 1985 to 52,205 by 2016, of which just above half (28,000) seats are in government medical colleges.5 In this case, students who have invested large amounts in their education will serve patients that ensure maximum returns on their investment. And there is no reason why doctors trained in government medical colleges will not do the same. Insisting on compulsory service in underserved areas as a licensing requirement would at least partly mitigate the acute shortages in rural India. However, while India today has nearly three times as many medical schools as the US, the severe misgovernance of medical education in the country by the statutory Medical Council of India (MCI), an organization captured by special interests, has gravely undermined the larger social good. It is interesting to note that all three branches of government have made almost identical observations about the MCI: Parliament,6 the Executive7 and the Judiciary.8

  The example of medical education underscores the role that professional bodies play in higher education and the pernicious effects of their institutional decay in the last few decades.

  The biggest question concerning this explosive growth in Indian higher education is the quality of the millions of graduates. What do they learn? What cognitive or non-cognitive skills do they have? What is their domain knowledge in their fields of study? No government is interested in finding out, but in almost every field, the answers are discouraging. A host of surveys suggest that between 75 to 90 per cent of graduates of engineering and business schools are unemployable. The figures for the majority of students who earn bachelor’s degrees in arts, science and commerce can be scarcely better. The result is that only few institutions have signalling value for employers, and these capture all the attention. The core reason is the absence of quality faculty. When the system (rapidly) expanded, so did alternatives in the private sector, and expansion became all about ‘hardware’ (land, buildings) rather than ‘software’ (faculty, staff, pedagogy, research). Indeed, Indian government documents on higher education have a sensibility akin to that of developing the fertilizer sector: investment = physical facilities = output. In one case, it is urea (in millions of tons); in the other, it is students (also in millions).

  Higher education is also the locus of knowledge creation. Analysis of publications data—an indicator of research output—shows that while there has been some progress, it has severely lagged the overall growth in higher education. In 1990, India’s GDP (using purchasing power parity), was 83 per cent that of China’s, while the number of publications was double that for China. By 2011, India’s GDP was 43 per cent that of China’s and, while its publications grew threefold, the ratio relative to China’s dropped to less than 30 per cent. China’s share of global publications in STEM fields grew to 11 per cent, and while India’s share edged upwards to a modest 3 per cent, the gap between the two countries widened even further when it came to highly cited articles.9

  However, it should be noted that much of India’s publications output is not from universities but from specialized research centres. The roots of this go back to the 1950s when India decided to separate research from teaching, resulting in students lacking exposure to research and researchers, unable to easily access talented students. In addition to publicly funded research centres outside the university system, there is also a growing body of research from the many research centres established by MNCs in India in the post-liberalization period, which can be observed especially in patent (rather than publications) data.

  Political Economy of Higher Education

  The university system in India is the collateral damage of Indian politics. The vast majority of government colleges in small towns offer dismal educational outcomes. For politicians, the benefits of the Licence Control Raj extend beyond old-fashioned rent-seeking by manipulating contracts, appointments, admissions and even grades in government-run colleges and universities, to the use of higher-education admissions for vote-banks and partisan politics and as a source for new entrepreneurial activities (in private higher education).10 India’s governance weaknesses beset public services more generally, and the shortcomings of higher education are simply one more manifestation of this affliction.

  Three key factors have shaped the political economy of India’s higher education. The first is the structure of inequality in India. The historic severe degree of educational inequality led to a populist redistributive backlash when hitherto marginalized social groups came to power. However, the resulting redistributive politics has for the most part focused on more ‘visible’ forms, which explains why Indian politicians have obsessed over reservations in elite institutions of higher education rather than improve the quality of primary and secondary schooling and the scores of state universities of abysmal quality.

  Second, palatable exit options made it easier for erstwhile Indian elites to be less obdurate in their opposition to increasing reservations. In 1990, India was reeling in the aftermath of a policy decision by a minority government to sharply increase affirmative action in government jobs and education, as recommended by the Mandal Commission. A decade later, the issue had faded away due to exit possibilities inherent in accessing international higher education or to the thousands of new private colleges. It is estimated that the number of Indian students studying overseas is around a quarter of a million, but in the last couple of years there appears to have been a sharp increase in the number of international undergraduate and master’s students from India to nearly 3,50,000, with almost as many Indian students in China as there are in the UK.11 If one assumes an average annual expenditure of $25,000 and 3,00,000 students overseas, Indians are spending around $7.5 billion annually on consuming higher education overseas.

  Finally, there has been a form of vertical integration between the role of politicians, policymakers and owners of higher-education institutions. This has significantly affected the level and composition of public funding in state budgets, with a shift from funding public institutions to students in private colleges. In the Andhra Pradesh budget for 2013–14, for example, while funding for higher and technical education was Rs 4081 crore, that for fee reimbursement and scholarships was Rs 5400 crore. The vast bulk of this went to private colleges, many of which were politically connected. It would not be an exaggeration to say that the privatization of higher education has been the result of well-aligned political incentives. The regulator (politicians) is also the owner (of private colleges), and the politicians pass budgets with increasing budgetary allocations for fee reimbursements in the name of social justice. The students then enrol in colleges run by the same politicians so that, effectively, the public pays to sustain their business ventures. While this has undoubtedly increased access, the quality of this access is moot.

  Reforms

  In the post-liberalization era, if the setting up of new colleges has been akin to a speeding bullet train, reforms in the sector have been slower than the languid movement of a goods train. But what happens inside these thousands of new higher-education institutions is a starkly different story, the result of a system that has failed to reform even as it expanded massively. Even though Indian states differ considerably in their economic performance and the political parties that dominate them, when it comes to state universities, virtually all are poorly governed, irrespective of the state concerned. The state universities charge little and teach little, yet there is little political pressure or leadership to undertake painful reforms. And the consequences are becoming apparent. The maximum number of new colleges opened in any state during 2013–14 was in Madhya Pradesh (five new colleges every week) even as one of India’s worst higher-education scandals (Vyapam) was unfolding in that state, driven by the reality that despite the huge expansion of higher education, students are sti
ll desperate to get into the few that have any signalling value in the labor markets.

  Severe governance weaknesses—of the regulatory system as well as within individual institutions—have resulted in Indian courts emerging as a significant actor shaping higher-education policy, often not for the better. The regulatory approach has been ‘command-and-control’, and universities are beset by direct and detailed prescriptions, with laws, rules, regulations, guidelines and policies set by the government and multiple regulatory bodies on virtually every aspect of higher education, be it admission policies, internal organization, fees and salaries, or the structure of courses and funding, although the sheer size of the system is forcing some degree of loosening. Sadly, an insistence on academic conformity ensures that creativity is the first casualty.

  Underlying this model is a deep-rooted distrust of allowing universities autonomy, even after their initial approval. That distrust has been so disempowering as to have contributed to the very mediocrity and poor governance among most Indian universities that it was meant to overcome but, ironically, has become the rationale for continued control. And a key stakeholder—faculty—is either absent (manifest in the acute shortage of qualified faculty) or, at best, poorly trained and rarely a flag bearer of professional norms and standards.12

  The regulatory structures governing Indian higher education were created for a system that has grown more than hundredfold from the time when it was put into place. Today, in the case of public institutions, scale effects dwarf the limited capacity of centralized systems of oversight and control. To take an example, the President of India was made an ex officio ‘Visitor’ to central higher-education institutions to lend the prestige of his office to a few national universities. As of 2016, the President was Visitor to 114 central institutions, including central universities, NITs, IITs and IISERs, under the administrative control of the Ministry of HRD, as well as other higher-education institutions under the administrative control of the Ministries of Shipping, External Affairs, Agriculture, Sports, Textiles and Chemicals and Fertilizers.13 One might imagine that the country’s highest constitutional office has a few other responsibilities. This example vividly illustrates just how the governance of higher education remains in a time warp, even as the sector has so profoundly transformed.

  Under the UPA government, attempts were made to overhaul the regulatory structures governing higher education, moving away from intrusive inspection-based processes to accountability through independent third-party validation, mandatory self-disclosures and objective evaluation schemes. These proposals were ostensibly meant to get the states to take a more differentiated approach towards a highly variegated higher-education sector, with a more hands-off ‘promotional and evaluative’ role for the set of upper-tier institutions, a more engaged ‘steering role’ in mid-tier institutions while confining active regulation to lower-tier institutions, and at the same time ending the artificial separation between the regulation of ‘technical’ education from other fields. Accreditation was seen as a central plank of these reforms to ensure that poorly performing institutions were dealt with swiftly. But that has happened very gradually.

  A series of Bills were introduced in Parliament to this effect. These included the National Accreditation Regulatory Authority for Higher Educational Institutions Bill that sought to make accreditation by independent accreditation agencies mandatory for all higher-education institutions; the Education Tribunals Bill to create a central tribunal and state-level tribunals to resolve disputes relating to institutions, faculty, students and regulatory authorities; and the National Commission for Higher Education and Research Bill to create an umbrella ‘super’ regulatory authority that would subsume the principal higher-education regulators (UGC, AICTE, the National Council for Teacher Education and the Distance Education Council). All the Bills stalled, mostly for good reasons.

  However, two reforms proposed by the UPA were resuscitated (albeit in somewhat different forms) by the NDA. During the tenure of the former, the National Development Council had approved setting up of fourteen ‘world-class universities’ (or ‘innovation universities’) across the Eleventh and Twelfth Plan periods on a PPP model. This led to the Universities for Research and Innovation Bill (2012), which sought to empower the central government to set up universities for research and innovation through notifications. It was a recognition of three realities: one, no Indian university was making it to the top rankings of global universities; two, that this would not occur under the prevailing regulatory structures; three, reforming the coagulated higher-education regulatory structure was politically unfeasible. These ‘innovation universities’ could be public or private. The Bill stalled. But in 2016, the finance minister in his Budget speech announced that an ‘enabling regulatory architecture will be provided to ten public and ten private institutions to emerge as world-class teaching and research institutions’. When and how that will happen remains to be seen.

  A second initiative is more likely. The UPA government had introduced the National Academic Depository Bill in 2011 to establish a national electronic database that would allow academic credentials to be easily verified and authenticated. While the Bill stalled, in September 2016, the NDA announced an initiative to digitize all academic records in secondary to tertiary-level institutions, with the National Securities Depository Ltd and Central Depository Services Ltd as implementing agencies. The move would improve the ‘plumbing’ of higher education and help mitigate academic fraud and facilitate job verification and background checks on candidates seeking employment or further education.

  In the Twelfth Plan Period, a new centrally sponsored scheme, the Rashtriya Uchchtar Shiksha Abhiyan, was launched to try and improve quality in state universities and colleges by channelling funding through new State Higher Education Councils. Its effects are as yet unclear. Perhaps the most encouraging initiative in higher education has been a new emphasis on ‘skilling’ with the creation of the National Skill Development Agency in 2013, targeted towards providing skills to 500 million people by 2022, an improbably unrealistic goal. Currently, the Government of India is funding skill-development activities through dozens of schemes spread across multiple ministries. These programmes provided skill development to 17.34 million young people from 2011–13. While some of this training is being done through government ITIs, most of the training is being delivered by private vocational training providers and assessing bodies, with the central government ministries providing funds to state governments for reimbursement of training and assessment costs. What exactly are the outcomes of this substantial programme will be an area of fertile research in the future.

  Conclusion: What Does the Future Hold?

  As the 21st century progresses, India will face unprecedented pressures on its natural resources, be it land, soil, air or water. The only resource it will have in abundance will be its people. The latter can either be harnessed to creatively address the challenges posed by the former, or they can add to the burden. While one is the path to India’s promise, the other is the road to perdition. While there are some green shoots, as matters stand today, it would be foolish to be sanguine.

  Two changes are fundamental if this ship is to veer course soon. First, a far greater effort to improve learning outcomes, beginning with early childhood development and primary and secondary schooling. India’s unacceptably high levels of stunting, which has pernicious implications for cognitive development, are a reminder that a superstructure of higher education built on weak foundations of schooling can only go so far.

  Second, drastic changes in the political and regulatory personnel in higher education, from education ministers to the UGC to vice chancellors of universities. At the heart of the weakness of policy and academic leadership is a political leadership that across political parties has shown depressingly little understanding of an issue so vital to the country’s future.

  India cannot replicate the brick-and-mortar university experience of the Western world. I
t neither has the resources nor the time given the scale and growth of the system and its extreme fragmentation. Higher education is the classic sector illustrating the Baumol–Bowen paradox of wage growth exceeding productivity growth and, in India, with promotions linked to age and wages to Pay Commissions (in public universities), the resources for a massive expansion of public higher education will simply not exist.

  A critical bottleneck is the lack of good faculty, one that simply cannot be addressed easily. The shortage of good faculty is acute across developing countries. The market for talent is global and overseas education can only partly mitigate this yawning gap. In the last two decades, for instance, Chinese nationals in the US received twice as many PhDs as Indian nationals—five times as many in mathematics and three times in the physical sciences (Table 2). India needs to follow Japan by allowing PhDs to be granted by working with qualified personnel in private R & D centres as well as in the many government scientific institutes and labs, perhaps by granting research personnel in these centres dual affiliation with universities.

  Table 2: Chinese and Indian Recipients of USA PhDs by Field (1993–2013)