Industry Insight - Higher Education in India

There were 20 Universities and 500 Colleges at the time of independence. At present, India is the largest higher education system in the world with 504 Universities and university-level institutions (as on 31.12.2009) - 243 State Universities, 53 State Private Universities, 40 Central Universities, 130 Deemed Universities, 33 institutions of national importance established under Acts of Parliament five Institutions established under various State legislations. In addition, there are 25,951 Colleges including around 2,565 Women Colleges. Out of 25,951 Colleges, 7,362 Colleges (28%) have been recognized under Section 2 (f) and 5,997 Colleges (23%) under Section 12-B of the UGC Act, 1956. At the beginning of the academic year 2009-2010, the total number of students enrolled, in the formal system, in the Universities and Colleges has been reported at 13.642 million – 1.669 million (12.24%) in University Departments and 11.973 million (87.76%) in affiliated colleges.

Keeping this scenario as the backdrop, the report attempts to cover the higher education system in India, the structure of various universities and curricula offered, the genesis of private initiative and its present status, initiatives taken by the Government to improve the backbone of the country’s higher education system and above all a special focus on the MBA education – its issues and challenges, placements and a broad comparison with foreign MBA institutes. The focus of the report is on higher education system and MBA education in particular. This report has total 9 chapters and discusses all the pertinent issues related to management education in India.

The report will be useful for educationists, research scholars, private entrepreneurs interested in investment in higher education, foreign research bodies inclined to do research on higher education in India, private MBA schools and financial institutes/banks. SHOW LESS READ MORE >

Executive Summary
Highlights
1. Structure of Higher Education & MBA Education Market
1.1 Education System in India
1.2 Higher Education in India
1.3 Enrolment in Higher Education
1.4 Academic Qualification Framework
1.4.1 Bachelor’s / Undergraduate level
1.4.2 Master's / Postgraduate level
1.4.3 Doctoral / Pre-doctoral level
1.5 Structure of Indian Business School Market
1.6 Policy Framework and Statutory Bodies
1.6.1 University Grants Commission
1.6.2 All India Council for Technical Education Act
1.6.3 National Commission for Minority Educational Institution Act
1.6.4 Apprentices Act, 1961
1.7 Regulations
1.7.1 The regulatory landscape is undergoing a significant transformation with a number of new regulations in the pipeline:
1.7.1. A. Foreign Education Institutions Bill, 2010:
1.7.1. B. The Educational Tribunal Bill, 2010
1.7.1. C. The National Accreditation Regulatory Authority for higher educational institutions Bill, 2010
1.7.1. D. Prohibition of Unfair Practices in Technical, Medical Educational Institutions and Universities Bill, 2010
1.7.1.1 Statutory bodies in higher education
1.7.2 State Government
1.7.3 Central Government
1.8 Types of Education Providers
1.8.1 Private Institutions
1.8.2 Distance Education Providers
1.8.3 Self-financing Courses in Public Institutions
1.8.4 Foreign Education Providers
1.8.5 Non-university Sector
1.9 Quality Accreditation – National & Foreign Bodies
1.9.1 NAAC
1.9.2 NBA
1.9.3 Global Accreditation
1.10 Trends in Public Expenditure on Higher Education
1.10.1 2010 Estimates indicate the spends on higher education in India to be nearly Rs46,200 crore
1.11 Financing of Higher Education
2. Universities in India – Framework & Brief Profile
2.1 Central Universities in India
2.2 State Universities
2.3 Open Universities in India
2.4 Deemed Universities in India
2.5 Agricultural Universities in India
3. Government Initiatives in Higher Education
3.1 Autonomy of Higher Education
3.1.1 The Government is committing large amounts of funds to the Higher Education sector and also setting up new institutes:
3.1.2 CABE Committee on Autonomy of Higher Education Institutions
3.2 Recent Financial Reforms in Higher Education
3.2.1 Fee Reforms
3.2.2 Student/education Loans
3.2.3 Education Cess
3.2.4 Economy in Expenditure
3.2.5 Privatisation of Higher Education
4. Privatisation in Higher Education
4.1 An Introspection
4.2 Private Universities and Their Key Challenges
4.3 Regulations Governing Private Investments in Higher Education
4.3.1 State laws applicable to private universities
4.3.2 Central Government regulations for private universities
4.3.3 Private Professional Educational Institutions Bill, 2005
4.3.4 Foreign Educational Institutions Bill, 2007
4.3.5. Foreign Education Institutions Bill, 2010:
4.4 Regulatory Challenges Faced by Private Investors
4.4.1 Not-for-profit status impedes private participation
4.4.2 Barriers to foreign capital need to be addressed appropriately
4.4.3 Complex and multiple regulations suffer from lack of clarity
4.4.4 Private players demand better flexibility
4.5 Funding/financing Available for Private HEIs
4.5.1 Sources of financing for private HEIs
4.6 Challenges for Private Investors
4.7 Conclusion
5. Issues & Challenges in Higher Education in India
5.1 FDI in Higher Education
5.2 Mismatch in Education Curriculum and Industry Needs
5.3 Attracting Students at the Entry Level with Placement Records
5.4 Challenges in the Way of Becoming a World-class Institution
5.5 Issues Related to Quality Certification
5.6 Quality of Colleges/Institutes – Ranking
5.7 Issues Faced by the MBA Institutions
5.7.1 Fee Structure of B-schools
5.7.2 Faculty
6. Ranking of Business Schools and Placements
6.1 Survey Methodology (Business India)
6.2 Survey Methodology (Business World)
6.3 Survey by Financial Times 2010
6.4 Employment Potential
6.4.1 Top Recruiters in MBA
6.4.2 Employability of the MBA Graduates from Tier 2 and Tier 3 Institutes
6.4.3 Placements in IIMs in 2010
6.4.4 Salary Offered to IIM Students
6.4.5 Ranking of Major B-schools (Business Standard)
7. Foreign Collaboration in Higher Education
7.1 Introduction
7.1.1 There are more than 143 Indian institutes and 161 Foreign education providers (FEPs) engaged in collaboration:
7.1.2 Collaborations between India and foreign Universities deliver 641 programmes across disciplines
7.2 Government Initiatives
7.3 B-schools in Dubai
7.4 IIMs in Foreign Collaboration
7.5 Conclusion
8. Globalisation of Higher Education in India
8.1 Overview
8.2 Methods to Internationalise HEIs
8.2.1 Campus Abroad
8.2.2 Twinning Programmes
8.2.3 Foreign Partners
8.2.4 Study Centres
8.3 Measures to Promote Internationalisation of HEIs
8.3.1 Government Measures
8.3.2 Private Measures
8.4 Conclusion
9. Outlook
ANNEXURE 1-Estimated Cost & Revenue Structure of Private Management
Institutes
ANNEXURE 2-List of abbreviations
ANNEXURE 3-HEIs with Foreign Collaboration
ANNEXURE 4-BIBLIOGRAPHY

LIST OF TABLES
Table 1.1: Literacy rate
Table 1.2: General and Professional colleges
Table 1.3: Number of Universities
Table 1.4: Ownership and Funding of Colleges/Institutions
Table 1.5: Enrolment at various levels (2005-06)
Table 1.6: Number and Distribution of Teaching Staff
Table 1.7: Entry level exam and their eligibility norms for different courses
Table 1.8: Entry level exams and the respective eligibility norms
Table 1.9: Authorities and their mandates
Table 1.10: Distance State Open Universities
Table 1.11: Indian B-Schools Accreditation status
Table 1.12: Government Expenditure on Higher Education
Table 1.13: General Planned Grants Released in 2009-10
Table 1.14: Sector-wise Expenditure (Eleventh Five year Plan)
Table 1.15: Criteria for student loan
Table 2.1: Central Universities in India
Table 2.2: State Universities in India
Table 2.3: Open Universities in India
Table 2.4: Deemed Universities in India
Table 2.5: Agricultural Universities in India
Table 5.1: World Ranking of Universities
Table 5.2: Landmark Judgements Pertaining to Education Sector in India
Table 6.1: Methodology parameters & Marks Allotted
Table 6.2: Top Indian B-Schools ranking
Table 6.3: Parameter wise ranking
Table 6.4: Methodology parameters
Table 6.5: Top B-Schools in India
Table 6.6: Top 100 B- schools (Globally)
Table 6.7: Top recruiters for placements in MBA in 2010
Table 6.8: Top Recruiters in IIMs
Table 6.9: Statistical data regarding salaries offered to students of IIMs
Table 6.10: Ranking of Major B-schools
Table 6.11: Overseas Offers for Pass outs from Indian B-schools
Table 6.12: Offers per Student (B-Schools)
Table 7.1: Number of institutions having foreign collaboration in different states
Table 7.2: Preferred MBA by Nationality
Table 7.3: Preferred duration of study
Table 7.4: Popular Destinations
Table 7.5: Study motivations by nationality (%)
Table 7.6: Sources of finance for MBA (%)

LIST OF FIGURES
Figure 1.1: India has Largest Base of Population Below 20 Years of Age (2009)
Figure 1.2: India’s Large Base of School Going Population by 2025
Figure 1.3: Number of Students Enrolled in Higher Education: 2009-10
Figure 1.4: Enrolment of students in various courses
Figure 1.5: Growth of institutions and enrolment of students
Figure 1.6: Status of Accredited Colleges by March 2007
Figure 1.7: Current & Estimated Demand for Various Segments of Vocational Education &
Training Markets of India
Figure 6.1: Placements at IIMs in 2010
Figure 6.1.1: International Management Institute, New Delhi
Figure 6.1.2: IIM B
Figure 6.1.3: IIM A
Figure 6.1.4: IIM Cal.
Figure 6.1.5: IIM Kozhikode
Figure 6.1.6: IIM Lucknow
Figure 6.1.7: IIM Indore
Figure 6.1.8: IBS- Hyderabad
Figure: 7.1.1 Country wise distribution of Collaborating foreign players.
Figure: 7.1.2 State wise distribution of collaborating institutes in India
Figure: 7.1.3 Courses in the field of Management & IT
Figure: 7.1.4 Courses offered by Indian institutes collaborating with foreign institutes.

India has the largest higher education system in the world, in terms of number of institutions and student enrolment. In India 504 Universities and university-level institutions (as on 31.12.2009) - 243 State Universities, 53 State Private Universities, 40 Central Universities, 130 Deemed Universities, 33 institutions of national importance established under Acts of Parliament five Institutions established under various State legislations. In addition, there are 25,951 Colleges including around 2,565 Women Colleges. Out of 25,951 Colleges, 7,362 Colleges (28%) have been recognized under Section 2 (f) and 5,997 Colleges (23%) under Section 12-B of the UGC Act, 1956. At the beginning of the academic year 2009-2010, the total number of students enrolled, in the formal system, in the Universities and Colleges has been reported at 13.642 million – 1.669 million (12.24%) in University Departments and 11.973 million (87.76%) in affiliated colleges.

Higher education spends in India is currently estimated at Rs46,2000m and is projected to grow to nearly Rs150,0000m in the next 10 years, reflecting an average growth rate of 12.8%.

With substantial participation from the private sector and growing interest from foreign players, supply of higher education has increased substantially. The Government has also augmented supply through enhanced funding and by setting up new institutes.

While the increase supply is a step in the right direction, there is a need to align supply to the changing needs of students. The report highlights how this alignment can be brought about through diversification and collaboration in the higher education space.

While the Government continues to be the cornerstone of the higher education system, it needs to play a much larger role in facilitating the new possibilities to effectively cater to the emerging demands of students. Other areas like privatization and globalization also require incentives from the Government to steer the India’s higher education system into the league of the best in the world. These possibilities also provide the means to build a more robust higher education system by addressing the primary challenges of access, equity and quality.

Some premier institutes for higher learning such as IITs and IIMs impart world-class education in management and technology/engineering. However, only 8% of the students go for higher education in India after completing their schooling. The enrolment of women students at the beginning of the academic year 2009-10 was 564.9 million constituting 41.40% of the total enrolment. Of the total women enrolment, 14.72% women have been enrolled in professional courses. The women enrolment as a percentage of total enrolment in States is the highest in Goa (59%) and the lowest in Bihar (30%). In terms of absolute numbers of women enrolment, Uttar Pradesh tops the list of States with 8.00 lakhs, followed by Maharashtra (0.78 million). The number of doctoral degrees (Ph.D. only) awarded by various universities (during 2007-08) was 13,237. Out of which, the faculties of Sciences had the highest number with 4574 degrees, followed by the faculties of Arts with 4405 degrees. These two faculties together accounted for 67% of the total number of doctoral degrees awarded. The regular faculty strength in universities was 0.090 million (15%) and 0.498 million (85%) in Colleges, totalling 0.589 million in the beginning reporting period of the 2010.

The GER for the US and Canada is 60% and for European countries, it is 40%. In fact, many other developing countries such as Brazil and China have a GER that is more than 20%. For a country like India that aims to match the global standards in various aspects, a poor GER would mean a sorry state of affairs. The Government has set the target of 15% GER by 2015 in the 11th five year plan (2007-2012).

India is the second largest producer of MBAs in the world, with over 1,500 B-schools churning out about 100,000 MBAs a year. Indian B-school market structure includes national B-Schools like Indian Institute of Management (IIMs), Indian Institute of Technology (IITs) (20), university department (200), All India Council for Technical Education (AICTE)-approved autonomous PGDBM schools (180), affiliated colleges (940), B-schools under private university (150 schools), and autonomous institutes not approved by AICTE(60).

The government expenditure on higher education has been consistently growing over the years. It stood at Rs7,116 crore (Rs71.16 billion) in 2006-07 and Rs9,209 crore (Rs92.09 billion) in 2007-08, which shows a growth of 22.15% and 29.42% respectively over previous years. Education cess of 2% on all Central Taxes has been levied from 2004-05 and additional cess of 1% on all Central Taxes for funding higher and secondary education has been levied from 2007-08. The Eleventh Five Year Plan (2007-12) outlay (as approved by NDC) for Ministry of Human Resource Development is Rs2,69,8730m (Rs84,9430m for the Department of Higher Education and Rs1,84,9300m for the Department of School Education & Literacy). The approved Annual Plan outlay (2009-10) is Rs268,000m for the Department of School Education and Literacy and Rs96,000m for the Department of Higher Education.

Regulatory aspects of the educational infrastructure in the country are managed by the UGC that looks into the coordination, determination and maintenance of standards of University education. The AICTE is an apex statutory body for ensuring coordinated and integrated development and management of technical education in the country.

The National Assessment and Accreditation Council (NAAC) assesses and accredits educational institutions of higher education. NAAC has completed the process of assessment and accreditation of 140 universities and 3,492 colleges by October 2010. The quality status of colleges/universities is known by their grading given by NAAC. More and more educational institutions are going for accreditation by global agencies. Some of the prominent accreditation agencies include Educational Excellence-International, UK; British Accreditation Council for Independent Further and Higher Education for UK; American Association of Collegiate Schools of Business, US; Association of MBA, US; European Quality Standards, UK; European Federation of Management Development; International Assembly for Collegiate Business Education, US; and New Millennium Accrediting Partnership for Educators Worldwide, US. The candidate institute will be assessed for accreditation based on its strategy, mission, degree of independence, faculty strength and their qualifications, and other physical infrastructures such as library and computer facility.

Report of the Central Advisory Board of Education Committee on Autonomy of Higher Education Institutions suggested measures such as providing more autonomy to higher education institutes for designing curriculum, suggesting universities to adopt innovative approaches for periodic revision of curriculum for every 2-3 years, and providing the autonomy to start self-financing courses. To improve the GER, the number of universities and colleges has to increase. In this context, the 11th plan encompasses the establishment of 30 new Central Universities and new IITs and IIMs and also attempts to strengthen and increase the intake capacity of existing colleges and the Universities by increasing the number of seats of existing courses and by introducing new courses. In the process, the Universities and colleges in areas with low enrolment ratio (lower than all India average) and also districts falling in remote, hilly regions, border areas, small towns, and rural areas and districts with concentration of SC, ST, OBC and minority, will be proactively supported. This may require enhanced development grants to existing Universities and colleges and higher education being included in the concurrent list. This calls for joint efforts by the Union and State Governments.

The trend of Indian institutes opening overseas campuses is also picking up. The Institute of Management Technology, Ghaziabad opened its Dubai campus in 2006 and Shriyans Prasad Jain Center of Management and Birla Institute of Technology & Sciences, Pilani are imparting higher education programmes abroad.

India and the US have entered into a long-term relationship in higher education with students and faculty exchange programmes. In 2006, about 80,000 Indian students out of 140,000 students travelling abroad for higher studies were enrolled in the US. Stanford Graduate School of Business has an exchange programme with IIM Bangalore. IIM Lucknow is exploring research tie ups with five B-schools in the US and Europe. IIM Ahmedabad wants to join hands with the University of Amsterdam and Duke University. The IIMs have 50 different tie ups for student and faculty exchange. Indian MBA education is truly going global and some of the institutes are all set to compete with the best B-schools in the world.

Some of the issues and challenges faced by the Indian higher education industry include restricted FDI investment, mismatch between industry requirements and curriculum, challenges in the way of achieving world-class standards and issues related to quality accreditation. A number of private sector institutions offering MBA or MBA-type programmes have been mushrooming but they are not up to the mark because of the following reasons:

- Salaries offered are generally not attractive
- Lack of adequate industry–institute interface
- Lack of research focus
- Outdated curriculum in most of the cases

IT & ITES, manufacturing, retail, communication, and transportation sectors are expected to drive the demand for jobs in India in the near future. By 2020, 47% of India’s population will be between 15 and 50 years of age, compared with 35% at present. On the other hand, the working populations of the US and China are projected to shrink. Hence, India is estimated to have the world’s largest population of workers and consumers. Given the forecast, management education has the potential to place the country’s economy on a high growth trajectory. The onslaught of more and more private companies/corporates entering into MBA education has already changed the landscape of management education in the country. E-learning and distance education is another area that has seen tremendous growth in the recent past and will continue to do so in future. Undoubtedly, management education in India is on the threshold of a revolution. The horizons are widening and so are the challenges and complexities of massive expansion.