Friday, November 12, 2010

How does India's Regulatory Regime Manage to Keep Philanthropy out of Higher Ed?

Here's an excerpt from an interview of Richard Levin (an alternate link), President of Yale University, by Prashant K. Nanda of MInt:

... There is a lot of philanthropic interest in higher education of India. I hope Parliament will open the market up to those philanthropists to build universities. They can give some money to Yale, but that will not have the impact.

India is very brand conscious and it seems it wants foreign universities to set up shop here. That will help, but that is not the answer. The answer is great Indian universities and Indian brands. You have done it with companies—you got Tata, Reliance (Reliance Industries Ltd and Reliance-Anil Dhirubhai Ambani Group), Infosys (Technologies Ltd), you got Wipro (Ltd). These are great global brands now. You can do the same with Indian universities rather than co-branding like Yale-India Campus or Harvard-India Campus.

The headline -- Allow Private Sector to Have a Big Role in Higher Education -- gives us the impression that Levin doesn't realize the extent of private sector participation in Indian higher ed. Here's a quick reality check from a paper by Devesh Kapur and Pratap Bhanu Mehta -- Mortgaging the Future? Indian Higher Education (Brookings-NCAER India Policy Forum 2007-08, Volume 4, 2008, p. 101-157; pdf):

In the case of engineering colleges, the private sector, which accounted for just 15 percent of the seats in 1960, accounted for 86.4 percent of seats and 84 percent of all engineering colleges by 2003. In the case of medical colleges, the private sector dominance is less stark, but the trend is unambiguous: the proportion of private seats has risen from 6.8 percent in 1960 to 40.9 percent in 2003. While we do not have precise data, the situation in more than 1000 business schools suggests that 90 percent are private. Even in general education, there is now a mushrooming of private, self-financing colleges. In Kanpur University (in UP), the number of such colleges outnumber state assisted colleges 3 to 1, while in Tamil Nadu, self financing colleges comprise 56 percent of general colleges and 96 percent of engineering colleges (Srivastava, 2007). ... Even as political parties rail against de jure privatization, de facto privatization continues unabated. [page 23]

The problem, therefore, is not about the level of private sector participation. It's about the kind of private sector participation: real philanthropy as opposed to fake "trusts" set up by businesspeople, politicians, crooks, thugs and muttheads.

Seen this way, the question about private sector in India's higher ed (which Levin also alludes to) is this: what is it in our legal-regulatory regime that allows all these bad elements in, but keeps real philanthropists out?

I'm yet to figure out an answer to this question.


  1. L said...

    The question to ask is who is setting up these colleges. Most of the private colleges are set up by MLA s or their kin. For them circumventing the regulatory bodies is easy. These people have "apna aadmi" in the university senate, in the SCHE, and are able to set up MSc courses working out of a 4 room apartment.
    However, there are a few colleges run by philanthropists and trusts and some of these are good.

  2. Pranav Dandekar said...

    It seems like empirically there is an overwhelming evidence that for-profit universities don't do nearly as well (in terms of name recognition, rankings, etc.) compared to non-profit. And this is more true in the US which arguably the most rabidly capitalist society in the world. Why is it that there isn't a single for-profit university in the US ranked in the top 50 in 200+ years of existence? If there isn't already an economic theory for this phenomenon, there should be one. It might have something to do with the nature of the commodity being produced (viz. education) where to be successful to need to supply what the consumer needs rather than wants. And that can't be done in a for-profit model. If true, it paints a bleak picture of the future of private education in India -- none of the vast majority of the private colleges will produce quality graduates because they are all for-profit, and that means they are averse to making the kinds of investments and trade-offs required to build a top-class university. Anyway, just my two cents on this...

  3. Suresh said...

    what is it in our legal-regulatory regime that allows all these bad elements in, but keeps real philanthropists out?

    Don't you think that philanthropy and "making money" are linked? I may be wrong but the US operates on two principles. The first is that you are free to make as much money as you want (subject to law, of course) and you should not feel guilty about it. The second seems to be that if you do make a lot of money, then you should give some of it back to the community. The emphasis in the US on the community is something missed by those whose ideas of US capitalism are formed by reading Ayn Rand's (bad) novels.

    The question in India is whether we have ever accepted the first principle. Probably matters have changed a little since 1991 but I get the feeling that entrepreneurs are still not figures of admiration. We still have policies which make it difficult to be an entrepreneur. Then, why complain that there is no "genuine" philanthropy?

    Is it really surprising that private sector involvement in education is still dominated by those looking to make a quick buck than anything else? If we had more sensible entrepreneurship policies, these entrepreneurs might have gone into some other business rather than education. And yet, the "demand gap" in education is so vast (something pointed out by Bibek Debroy in today's Indian Express) that even these lousy institutions have no difficulty finding students.

    Hopefully, as entrepreneurship becomes more acceptable in India, we will find more philanthropy as well (like the Infosys prize). This is not a given, of course.