Monday, October 03, 2005

An elitist dream?

A recent issue of The Week had a cover story on the red carpets rolled out by foreign universities to woo Indian students to their campuses. Since foreign students pay a full fee while the natives pay only a partial fee, the former are, naturally, very attractive. On the supply side, more Indian students can afford expensive education today than ever before.

The numbers reported by the Week are truly staggering. There are at least 120,000 students studying abroad, most of them in English-speaking countries. Expenses? Including tuition, they come to anywhere between a low of Rs. 0.5 million and a high of Rs. 1.2 million per year.

Even if you assume (liberally) that some 75% of them have access to financial assistance -- I am sure it is a gross overestimate -- it still leaves some 30,000 students who pay their way through (with money raised by their parents or through bank loans). This is still a very large number and it represents an opportunity that India itself should be tapping.

Sure, some of the students wish to study abroad for the experience, and there is a lot to be said about it. But I am also sure there is a large number of students who go abroad because they don't find many good colleges and universities offering high quality education right here in India. Here is a quote from one of the people interviewed for the Week's story:

"I'll be taking the CAT exam in November. If I get through, I'll remain in India. But the competition is very tough. So, I've also applied for an MBA course at the University of Technology, Sydney, which I am likely to get."

We all know why Narayanamurthy sent his son to Corness, don't we? Here is what CBS said: "Murthy's own son, who wanted to do computer science at IIT, couldn't get in. He went to Cornell, instead. Imagine a kid from India using an Ivy League university as a safety school."

There is clearly a demand for high quality education in a good university even if it is very expensive by Indian standards.

Bottomline: a university that is similar in spirit to the Indian School of Business (ISB) could be a phenomenal success.

In an earlier post, I estimated what a fully student-funded research university would cost. That estimate was for a bare-bones university, made with the intention of finding out what the lowest cost would be. It turned out to be about Rs.100,000 per student per year. It supports 1 faculty and 2 or 3 graduate students (who all share in the teaching) for 40 students.

Just imagine what wonders one can do with Rs.200,000 or 300,000 per student! The educational experience would not be just bare-bones, it could have all bells and whistles. The students could be taught by some of the most brilliant minds money can buy (!) and could have world-class infrastructure.

When such a university is set up, who knows, it may even attract lots of foreign students (and some foreign faculty too!), offering everyone an international flavour and experience right here in India.

I am sure I am not the only one to think along these lines. After all, ISB and GLIM have been established on a similar principle. However, this hasn't happened, not just for a 'real' university with multiple disciplines, but even for stand-alone institutions in such 'lucrative' subjects such as engineering, medicine and law. To me, this fact implies either regulatory obstacles or market failure. What could it be?

Or, I am perhaps in some seriously elitist dream. Somebody please pinch me!


  1. Anonymous said...

    There is nothing Elitist about your dream...or well maybe there is. BUT, this elitism is NECESSARY. In order for our country to prgoress, we need to create "Centres of Excellence". Places where great minds can dwell on whatever they choose, free from political/corporate interference. However, regulatory obstacles are also huge in this regard. There are all sorts of hoops that have to be jumped through for a decent university to be set up. I wonder how ISB managed it. With great difficulty, I'm sure!

  2. Anonymous said...

    If having excellent universities and institutes of higher education is elitism, then I am all for this elitism. If expecting better education and requiring to pay for what you get is elitist, then I am all for this elitism. I remember reading on your blog (as well as something related on Satya's Education In India) that we need more universities and a departure from the current spokes-and-wheels model. We not only need excellent technical and management schools, we also need excellent liberal arts institutes.

    A tangential point, Abi, are you in favor of increasing fees for IITs to truly reflect the market value of education those institutes provide?

    I don't think a "normal" university charging Rs 200,000 from students will be well appreciated in the Nehruvian socialist (sorru, couldn't resist) atmosphere in India.

  3. Anonymous said...

    BTW, paras 2 and 3 above were meant to be independent. One could read it as if I am accusing you of being a "Nehruvian socialist"... which I am not.

    BTW, about subsidized higher education, my views are quite similar to those of Atanu (obviously influenced by his writing).

  4. Anonymous said...

    Abi, I think 75% as an estimate of students who get financial assistance is very optimistic - I am guessing it is much less. but kids - and parents - cheerfully pay out kings' ransoms for courses abroad - and if it is the experience of studying abroad and also seeing it as an entry point for working and living somewhere else (pref in the west), then excellent Indian institutions cannot offer that...

  5. Anonymous said...

    From a purely business point of view, it is an opportunity as you mentioned. That's precisely where the problem is isn't it? Every politician who sees the proposal for such an institute will see a cash cow and milk it dry.

  6. Abi said...

    Thank you all for some great comments.

    TTG: ISB started with a bang! It had the who's who of Indian business backing it; there were at least two states competing to host it. While I admit that what they achieved is absolutely fantastic, I wouldn't say it was all that difficult; they had tremendous fire power behind ISB.

    My question, of course, is why didn't such a thing happen for a regular university, or for that matter, for engineering or law?

    Niket: if IITs start charging so much, with scholarships and easier access to bank loans thrown in, I would be quite happy! I have always supported the idea that people pay for higher education. When only 6 to 7 percent of the relevant population enjoys the fruits of cheap (and far, far below cost) higher education in all fields, it is tantamount to looting the poor to educate the rich or the middle class. So, I certainly would support a hefty fee hike; I reserve the right to be a Nehruvian socialist in other aspects, though!

    Charu, there is something to be said about studying in a good university abroad where one gets exposed to an international environment. I am all for it. In this post, my plug is about those students who can afford expensive education (either through their parents' wealth or through bank loans), and still study in a good institutions. We currently lack such good institutions. In engineering, we have the IITs, Pilani, and a few other engineering colleges; are there more such colleges that someone in the 98th percentile can go to?. Same story in other disciplines, too.

    Selva: I didn't have a business proposition in mind when I posted it here. If such a private university is set up, it should be along the lines of any private university in the US. It should be run by some trust, probably with some initial funding from a philanthropist, but essentially sustaining itself from there on.

    It is not just the politicians taking things over, IMHO. I would blame the regulators as well -- in particular the UGC. there are probably some serious regulatory obstacles for starting a full fledged university. (management institutes and engineering colleges come under AICTE, I think.)