by Priyanka Bhardwaj
- India -
Education remains an emotional subject in a poor and developing country like India, where it is seen as the primary means for social and economic mobility. Indian families are known to sell land and spend their life’s savings to educate their children, especially males. Such desperation means that any change in the sector is a highly debated subject.
“We have decided to send our son abroad for higher education, preferably an MBA,” she explains, “as this will make him more globally competitive and it will stay with him for a lifetime. After all, he is our only son among three children and as responsible parents we feel obliged to think of the best for his welfare.”
After much deliberation Meena’s family decided to use their commercial property as collateral against the loan.
Estimates reveal that about half a million Indian students spend over US$15 billion annually on higher education abroad. Indians and Chinese account for the bulk of international students. Worldwide, the US, UK, France, Germany, China, Canada, and Japan are primary providers of higher education, while India, China, South Korea, Malaysia and Indonesia are the main consumers.
Neha is a microbiologist who got her degree from a US university because as she says, “India is still a developing country and for courses like nanotechnology or microbiology choosing to study abroad may be more sensible.”
Indeed, the subject of brain drain has preoccupied the Indian consciousness for over four decades now. The US remains the most sought-after destination for Indian students, who number more than 100,000 at any given time. Better pay packets, work environment and lifestyle have resulted in an export of highly skilled workers to Western shores after gaining subsidized higher education at home in India.
Those who have remained benefit – their wages have shot up due to manpower shortages, but at the expense of limited growth for Indian firms.
Private equity fund manager and alumni of Columbia University, Amit Bhatiani says, “Recession may have brought expatriates to India in search of more work opportunities but the appeal for a degree from abroad has only increased, especially among the upper middle class segment of India. Only those with family businesses in India tend to come back.”
India’s higher education sector is closely regulated, which keeps big foreign players and universities out of the country. Currently, the Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs) are the two pedestals of the Indian higher education system, with alumni employed as managers and engineers globally. Both function under a government charter and rank among the world's 100 best institutes.
Yet, more than 90% of Indian students seeking admission in the most desired IITs and IIMs are rejected due to capacity constraints, according to a 2008 report by the Associated Chambers of Commerce and Industry of India (ASSOCHAM). "Over 150,000 students go overseas every year for university education, which costs India a massive foreign exchange outflow. This amount is sufficient to build many more IIMs and IITs," states the report. "The trend can be reversed by deregulating higher education."
The chamber asserts that deregulation could create annual revenues of US$50-100 billion and provide 10-20 million additional jobs in the education field alone. It may also attract foreign students.
Only about 30,000 foreigners study in India, compared with 400,000 in Australia and 150,000 in Singapore. In the last couple of years India has seen a spurt in new IIMs, IITs, medical institutes and expansion in existing universities, yet there still remains a huge shortage of skilled manpower.
The IITs now provide about 8,000 seats compared to just 2,000-plus in 1988, but this is still pittance compared to America: UCLA (27,000 undergrad/11,000 postgrad), MIT (4,200 UG/ 6,000 PG), Harvard (6,700 UG/12,500 PG) and Yale (5,200 UG/nearly 5,000PG) top India per capita.
In humanities, Jawaharlal Nehru University has 5,000 seats and is the only one of its kind in India, while in California alone, there are 10 UCs.
In medicine, India produces just 7,300 MDs per year while the US produces 16,000 and the UK - a much smaller country - produces 4,200.
Several reports and studies in India highlight that the country’s burgeoning base of skilled professionals (estimated at nearly 50 million college graduates) lack in quality. Only a small proportion of Indian engineers, finance and accounting graduates match up to the rigors of a top multinational job.
Further, the enrollment ratios in India's higher education system are lower than in Asian countries such as the Philippines, Thailand, Malaysia and China. India also clocks in with one of the lowest public expenditures on higher education per student, falling behind China, Brazil, Indonesia and Malaysia.
Though reformation and investment in a differentiated higher education system in India is urgently needed, the country’s political leadership and bureaucracy has a vested interest in keeping education, like real estate, highly regulated. Tight controls and endless red tape allow them to feed off the systemic corruption created within the logistical nightmare of setting up or running private institutions in India. But this control has meant that quality foreign institutions have largely kept away from India.
So far, tough FDI regulations in education have been met with a poor response in the sector. However, over the last decade, an emerging Indian economy, new employment opportunities, and a 300-million strong middle class (empowered economically and politically) has created a clamor for good graduate and post-graduate education in India.
Following economic liberalization initiated in the early 90s and the easing of Foreign Direct Investment (FDI) norms, India today is the business back office of many global companies and the outsourcing destination for affordable, quality medical treatment. Higher education, if handled properly, could follow suit.
Many today argue that top foreign universities (Harvard, Yale, MIT, Stanford, London School of Economics) should be allowed to establish high quality, inexpensive (due to competition from state-run Indian institutes and lower operational costs) campuses, thus saving foreign exchange outflows and brain drain.
Thankfully New Delhi, under Prime Minister Manmohan Singh, is looking to bring about changes following a fresh mandate in the general election in 2009. Given the political will, Education Minister Kapil Sibal hopes to see the reform he’s been pushing for enacted, specifically legislation that will give foreign education providers 100% ownership of their campus in India, while keeping out “fly by night operators.’’
The idea is to move towards a single window authority for setting up private institutions of learning, whether domestic or foreign, by integrating both state and federal level decision making. Though a regulatory body is needed to protect the interests of students, while balancing commercial interests and the autonomy of private institutions, the focus is on a public-private partnership, a strategy that has worked well in infrastructure sectors such as road and power.
“There will be a whole lot of structural reforms basically to free up the system, to end License Raj,” Sibal recently said. “FDI must come into India. Entry into the education sector must neither be limited nor over-regulated. I want the system to be accessible from the outside, too.”
About the Author
Priyanka Bhardwaj is an independent journalist and risk analyst based in Gurgaon/New Delhi, India who has covered diverse issues related to the Indian subcontinent for seven years. Her work has been published in Asia Sentinel, Opinion Asia, Siliconeer Magazine, Asia Times, and Business Times (Singapore) among others. Her area of interest spans marginalized social strata, women, children and climate change. Fluent in more than 8 Indian languages, Priyanka is writing a book about her travels and experiences on the Indian subcontinent.