Emerging Scenario of Higher Education in India: Implications for Financing

Abstract

Higher education is of paramount importance for economic growth and social development. Despite clear importance of investment in higher education, the sector is in crisis throughout the world, the severity of crisis being most acute for the developing world (World Bank, 1994). The landscape for higher education is undergoing transformation and accordingly the funding structure should also adapt. As rightly pointed out by Aggarwal (2006), the future of financing higher education cannot be merely an extension of the present but shaped by new realties, such as massive growth in enrolment, new mechanism of cost sharing, the appearance of new cross-border suppliers, the emergence and growth of different types of public and private higher education providers, distance education and many other innovations.

Indian higher education system experienced considerable expansion since independence. In fact it has the largest system of higher education in terms of the number of institutions. However in terms of access it still lags behind developed and even several developing countries in relative terms. With adoption of several policies towards inclusion and to diversify the intake of higher education institutes, the winds of change have blown in favor of marginalized social groups including women, thus marking some progress on equity front. But at the same time Indian higher education system suffers from serious qualitative deficits. With the growing compulsion of achieving expansion, equity and excellence in higher education, rises the need for funds. Contrary to this we find that amidst budgetary pressures and scarce public revenue from politically and socially compelling and competing needs, the higher education system in India has not received its due importance in allocation of funds. The most noticeable feature is the negative growth rate of per student public expenditure, both for Central as well as State expenditure, which can be explained by the growth in student enrolment exceeding the growth in real expenditure. Overall, per student expenditure registered a decline of 2.4 percent since 1992-93. From Rs 8322 in the period 1981-82 to 1991-92, the average real expenditure on higher education per enrolled student decreased to Rs 6790 in the period 1992-93 to 2003-04 (Srivastava, 2008). In this scenario of growing resource crunch it has become imperative to find innovative and adequate solutions to the increasing demand for financial resources. As a consequence what we are experiencing is trend towards marketisation. Cost-sharing, privatization and internationalization of higher education are clearly emerging recent trends in this field.

In this backdrop the paper traces the emerging realities of higher education in India that have serious implications for financing of the sector and thereby emphasizes the need for reshaping the financing strategies. However in order to address these emerging realities it is imperative to revisit certain basic issues of higher education which relate to the nature and purpose of higher education. Therefore the paper also attempts to epitomize and reflect upon these basic issues of higher education. Further the paper seeks to establish how these issues play an important role in guiding the financing of higher education in India in the face of emerging realities.