For profit?
Posted by Ninad on May 3, 2010 under All Posts | 
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Currently, around 14 million students attend college. However, given the robust annual growth of GDP of more than 9 per cent, it is estimated that India will need to send 22 million students to college in the year 2014.
Mr. Kapil Sibal, Union Minister for HRD has mentioned that he wants to send 30 per cent of India’s college-going-age kids to college. This would mean 30 million more students going to colleges.
India presently has around 350 universities and the National Knowledge Commission has stated that India needs around 1,500 universities.
In 2008, it is estimated that India had around 340 million people in the age group of 25-50 year olds who did not have a college degree. This is expected to rise to 380 million by the year 2014.
Setting up a good quality university is highly capital intensive and time consuming. Although foreign universities are likely to be allowed to come to India; at best, they will meet a fraction of this demand.
So, what is the future of those students who seek a good quality college degree and are unable to get it?
The yawning gap between demand and supply will ensure that aspirants for prestigious institutions like IIT and IIM will be on the rise for many years to come.
If this huge gap is to be met, shouldn’t the government look at changing its model and allowing for-profit institutions in the education sector?
Ayan said,
For profit institutions are there in education sector already- though in disguise. Maharashtra, Karnataka and Tamil Nadu together have the largest population of private engineering and management colleges- majority owned by politicians. The northern part of the country has seen birth of a host of “private universities” in last few years- ownership can be traced back to the same clan. The initial money is often full of sugar or mining dust, which later on turns dust free. Apart from the “development fees”, most of these colleges charge high tuition fees but invest least in faculty and knowledge development. As a result placement record stays in the range of 25% to 33%. Such institutions thrive on mediocre students who find it difficult to obtain a reasonable score in entrance exams. Therefore, the government faces a hard job in allowing “for profit” organizations to enter the higher education space, as the devil lies in its own backyard.
Education sector needs an overall reform, something similar to what our economy had gone through in early nineties. If organizations set up institutions with an eye on profit, there has to be a regulator like TRAI or IRDA or SEBI to oversee that the quality of education is not compromised. At the same time large corporate groups will see a huge opportunity- even with a conversion ratio of 1:5 the market size by 2014 will be 76 millions. That’s a number good enough for a lot of companies to start making capital investments.
Hope right sense will prevail at the right time with the government.
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