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Mainstream, VOL LVI No 47 New Delhi November 10, 2018

Privatisation and Higher Education in India

Monday 12 November 2018


by Anupama Souri Das


The commoditisation of higher education has gained acceptance in recent years. Profit, which was supposed to be illegal in education, has now legally entered into higher education. There has been a paradigm shift in the Twelfth Five Year Plan of higher education for “For-Profit Institutions”. The Twelfth Five Year Plan has favoured an approach that will endorse private capital in higher education with an eye on profit generation.1 Subramanian notes how today an array of individuals and societies such as corporate companies, religious organisations, hoteliers, realtors, and liquor barons offer private higher education in the country.2 Higher education in India is highly unequal in terms of access, equality, and quality. Though equality, quality, and quantity are inter-related, none-theless these are treated by some as if they compete with each other. J.P. Naik has compared this to an equilateral triangle that regrettably continues to elude the Indian education system. Emphasis is laid on quantity, quality or equity, but not all three of them simultaneously. The system thus ends up in a scalene that is a triangle of three unequal sides. An ideal system of education would bring all the three com-ponents together to build a truly democratic education system.3

This article is thus an attempt to understand the various implications of privatisation of higher education in a highly unequal caste-ridden society like India. The structure of the article is as follows. The first section attempts to understand the emerging characteristics of higher education in India with respect to privatisation. The second section talks about aspects of homogeneity of markets in higher education. The third section discusses the Pubic-Private Partnership (PPP) model in higher education. The fourth section attempts to understand the trends and functioning of neo-philanthropy and higher education. The fifth section discusses the relationship between privatisation and uneven development of higher education. The sixth section concludes by pointing to the inherent power inequalities of markets and the dilemma of social justice for subaltern classes in this market-driven higher education world.

(a) Emerging Characteristics of Higher Education in India

According to J.B.G. Tilak, higher education in India is characterised by two main factors. One, the development of highly stratified and differentiated system of higher education. Second, the dominance of private higher education, resulting even in the displacement of the public sector that has given rise to a post-welfare state, which may also qualify as a “weak state”. A “weak state” is thus a state that shrugs off the responsibilities of welfarism. This differen-tiated or stratified system of higher education has created a small number of elite institutions and a large number of mass institutions. The elite institutions are mainly high-quality public institutes. The government spending is much less on mass institutions and it is largely left to the private sector.

The government largely spends on a few high-quality elite institutions based on the underlying assumption that a few high-quality graduates are adequate for rapid economic growth. J.B.G. Tilak states how heavy reliance on the private sector is a poor strategy, reflecting that the state is “weak” in controlling the market forces and is reluctant to prioritise public higher education. The mushrooming private sector has allowed the government to shift its costs to families through fees and loans. This shift signifies a big ideological shift. Tilak describes it as “state opportunism”, which may have an ideological element, but demonstrates itself to be the “pragmatic” path of raising funds from non-governmental resources.4

In India, the so-called “meritorious” students endowed with cultural capital are admitted to subsidised public institutions of learning, which are relatively of higher quality, while the rest join in low-quality mass institutions that charge huge fees.This is particularly true in technical and professional colleges. The private institutions rely fully on fees, also known as self-financing, where expenditure per student is low, though income per student through fees is quite high. Unfortunately, the development of differentiated or stratified higher education system is not challenged at a significant level in a democratic country like India. Instead, the government is encouraging and partly supporting through affirmative action policies of entry of the market in higher education. Some policies of affirmative action, recently adopted in India, such as fee reimbursement in the form of vouchers, are evidently pro-private in nature. This is related to the principle of quasi-market strategy in which a market-like situation is inserted in education to ensure consumer sovereignty by giving more discriminatory powers to students.

In this, market-like elements such as competitions, user charges, and freedom to choose are applied and at the same time education continues to be subsidised.5 The user pay principle is used to put pressure on the institutions and universities to design courses and programmes according to students’ demands as funding is encouraged to follow the students rather than being directly given to the institutes.

Similar attempts of quasi-market strategy have been adopted at the school level in the form of school vouchers. It is based on the principle “Fund Students, Not Schools”. The proponents of this model of funding argue that public money should follow the students, not the schools, through school vouchers. Nobel Prize-winning economist Milton Friedman argued: that free-market competition would improve school quality because students and their money would follow the good schools and abandon the bad ones.

According to him, it would enable diversifi-cation of students in schools, as poor parents also would be able to send their children to the same schools as the rich. Through Right to Education (RTE), the government has mandated 25 per cent of seats in private schools to be reserved for students from the economically weaker sections of society. This is to make sure that the children from socially disadvantaged backgrounds may also get access to private schools that otherwise may not be possible. This 25 per cent quota is the demonstration based on the assumption that the quality of education in private schools is much better than the government-run schools. If the education in government schools were on par with the private schools, then this section of the Act would not have been necessary.6 Such policies, however, allow the government to continue to remain complacent towards improving the quality of public school education.

In the neo-liberal regime, the idea of choice is related to the consumer demand, which should not be confused with the social need, as rightly articulated by Mark Osslen.7 Freedom to choose depends mainly on “command over resources” and “market capacities”. In this context, a student with adequate resources will gain access to any institution of her or his choice while the deserving students from the subaltern classes may not get access due to lack of resources. Mark Olssen et al. rightly state that in the guise of consumer sovereignty, markets “protect privilege; they deny all students equal access to education; they deny all students exposure to alternative perspectives; they limit the community’s progress as a democratic country, and they undermine the basis of its integration, socially and politically”.8

The dominance of the freedom to choose the product over the freedom to choose the provider partly explains the mushrooming of private institutions offering market-oriented professional courses. If education ceases to be supported by the government, then education no longer can serve the largest interests of people. Avijit Pathak states how “marketisation could blight the quest for fundamental knowledge as market-oriented courses assume prominence at the expense of the fundamental knowledge like physics, history, and sociology. It can lead to a kind of market-driven hierarchy of knowledge as courses and disciplines which do not sell in the market are seen as irrelevant by students, who, like good investors, are looking for the highest return to their financial investment (fees).”9

(b) Homogeneity of Disciplines/Curriculum


Earlier, in the sphere of teaching, learning used to be across the spectrum of disciplines. There was never a perfect symmetry or homogeneity. The interests of students decided the choices of courses. Now students and parents, however, show strong favouritism for profit-oriented homogenous curriculum, which will make their children employable. Today, market shapes the popularity and availability of courses to the students. Likewise, the market drives the research agenda of the universities as resources for research in life sciences, medicine, engineering or economics are abundant while resources for research in philosophy, linguistics, history, and literature are scarce. Deepak Nayyar aptly puts it as:

“There is a premium on applied research and discount on theoretical research.”10

The conflicting interest of state and market in higher education is essential to understand the functioning of a university. The motive of the former is to serve society while the objective of the latter is to serve the private interests of students/consumers/clients. The markets’ area of interests is to teach short-term “marketable courses”. Its norms of management have limited adherence to academic norms and have high management control. The market is driven by profit, not service. The main concern of the market is skill development. The market’s area of interest is specific and not generic. Private universities introduce new vocational and specialised courses for which there are demands in the market because these courses enable them to draw lucrative fees from students. Private institutes fail to acknowledge that profit motive cannot produce results of high quality. Education is a state function in almost all the countries of the world. This rule is not just confined to basic education but is seen even in higher education including higher technical and professional education which is heavily subsidised by the state not only in economies where development policies are inclined explicitly to welfare and equality but also in developed market economies.11

(c) Public-Private Partnership (PPP) Model in Higher Education in India

The business tycoons, Mukesh Ambani and Kumarmangalam Birla, submitted their reco-mmendations in a “Report on Policy Framework for Reforms in Education”, which later came to be known as the Ambani-Birla Report. The report was widely discussed and reviewed because of its strong preference for the user-pay principle in higher education and setting up private universities in the country. (GoI, 2000) The origin of the Narayan Murthy Commission (NMC) Report is the outcome of the Consolidated Working Group Report of the Department of Higher Education, Ministry of Human Resource Development (MHRD) for the Twelfth Five-Year Plan. The Working Group proposed an expenditure of Rs 4,13,367.65 crores to implement the various higher education initiatives proposed in the Twelfth Five-Year Plan. (GoI, 2011)12 Based on this, Narayan Murthy (GoI, 2012) stated in the forward of his report that

“(a) the government cannot meet such large higher education demand with the limited public resources, and (b) the government must find innovative and newer avenues for funding, promoting research, and upgrading quality.”13

The NMC Report stated that many of the problems confronted by the Indian higher education system arise from its inability to attend to the key issues like faculty shortage, poor infrastructure, unaccredited institutions, employability, quantity mismatch, funding gaps and others. The NMC Report recommended several key elements such as the establishment of a world-class university to fund resources for relevant sectors like urban development, science, technology, innovation and the creation of a Council for Industry and Higher Education (CIHE) as a nodal agency for facilitating collaboration between industry and higher education.

An important recommendation in this direction is the proposal for in-company upskilling of employees and collaborative sandwich degree programmes. Another significant recommen-dation in this direction is the promotion of entrepreneurship outlook in students and staff at the university level with the industry’s support. Besides this, the CIHE is supposed to develop sector-specific strategies for meaningful corporate sector participation in the higher education sector. Skill-development would be given special attention at the post-graduate and doctoral levels through high-level apprentice-ships and applied research of advanced techno-logies.

The other objective is to build 20 new national knowledge clusters through the public-private partnership (PPP) model in selected cities and educational hubs for each of these clusters. The Central and State governments along with contributions from the corporate sector would finance the individual clusters/education hubs. For this purpose, the committee recommended the State governments to allot land free of charge for 999 years for setting up new institutions. The question, however, is: how would such policies be able to meet the wider social concern alongwith the objectives of the NMC recommendation? Such questions are relevant precisely because the commercial model nurtured by the private sector through “self-financing” insti-tutions in higher education in the past has proven beyond doubt that for the majority of private institutions, profit-making is always more important than social justice. For instance, Saumen Chattopadhyay points out how the distributions of private institutions in India are mainly concentrated in urban areas and access for the poor is yet a concern.

A majority of private institutions view and function according to the logic of education as an industry and are structured mainly to make profits.14 The state’s failure to regulate the growth of private higher education, commerciali-sation, and the failing standards are detrimental to the functioning of democratic higher education. It is argued how a well-organised state is crucial even in developed market economies and its need is even higher in developing countries like India where the markets are imperfect.15

Contemporary critics of neo-liberal develop-ment, such as Prabhat Patnaik, argue that the proponents of the bourgeois state advocate “means-based” approach of development over “rights-based” approach of development. The “means-based approach” of development is the characteristic of the bourgeois state. “Rights” are guarantors of welfare gains; hence, every winning of rights likewise reinforces them. If “rights” are constrained or “dependent on the capacity of the capitalist order in a bourgeois state” then how can they be called “rights”? When the state breaks the promise of its fundamental duties to provide a “bundle of rights” on the ground that it cannot financially afford them, then in that case it becomes apparent that these cannot be deemed or reckoned as “rights”.16

(d) The New Trends of Neo-philanthropy

The new trends of “philanthropic consultants” and “volunteerism” practices fit into the capitalist system. New ways of organising the gifting of time and money are growing at an extraordinary rate. These legitimise the capitalist system by providing the “human face” of the market.17 It is argued by some that the authoritarian government often masks itself to appear as the democratic rule. The elite classes and their representatives—comprising business tycoons, foreign capital, rich landowners and a section of rich peasants—control the bureau-cratic machines. The conventional leaders have perfected the art of concealing the outward appearance as real.18 Philanthropic involvement appears as voicing the aspiration to cut the state involvement from welfare: this makes the state to not provide certain basic fundamental rights to its citizens and explain that there is no need for it to do so as private agents will take care of it.

According to Villadsen, in this neo-philan-thropic era, philanthropy has become a welfare part of market activities, thus making the withdrawal of the state legitimate. In order to sustain the culture of philanthropy, it has become imperative that the world does not become equal. In other words, the “super-rich need to stay super-rich in order for their charitable enterprises to function”.19 For instance, Geneva, which has become a centre of global “Philanthropic Advisors”, tells the rich where their “gifts” will be best utilised. The “philan-thropic advisors” portray the act of giving through philanthropy as an aspiration that can be achieved with their help. This is the commodification of “doing good”. The more they can convince people to donate their money in favour of the “perceived” social good, the more money these advisors and consultants would make.

The city of Geneva in Switzerland illustrates the extent to which the process of “philanthropic giving” is implanted in the capitalist structure. The Geneva Global Report, 2012 states how the rhetoric of business and capitalism is applied in philanthropy such as the market ideas of efficiency and performance. It “revolutionises the whole act of giving”.

A few scholars feel that the philanthropic commitment of the public institutions has steadily been declining since the middle of the century. This is because the contemporary potential philanthropy donors lack the required philanthropy, which was exercised by earlier philanthropists.20 The corporate sector’s partici-pation in higher education is needed; however, it is uncertain how this can be achieved given the fact that only a handful of private corporates in India have any history of genuine philanthropy in higher education.

(e) Privatisation and an Uneven Development of Higher Education

The political regime of a country determines the kind of disciplines/subjects which would be preferred more than the others. Many of the powerful, rich and allegedly undemocratic countries have great achievements in exact sciences. For instance, countries like China and Russia have achieved much in electronics, physics, medicine, transportation, and other applied sciences, but these countries have failed to make a mark in subjects like sociology, history, political science, social justice and other subjects in humanities. Many countries are happy without these disciplines and some societies are more content without them and do not bother about their absence. The social science disciplines can flourish only in a democratic society. Societies that focus on citizenship can engage in disciplines such as sociology, political science, history, social justice and other branches of humanities. This is because democracies alone can fortify the foundational principles of social sciences.21

It was noted earlier in the Ambani-Birla and NMC report how there was a greater emphasis on technology-orientated courses—disciplines that build human capital. Private institutions undermine social science disciplines that speak about social justice and human rights. The “economics of education”, a newly-founded discourse, view education as a vehicle for “human capital development”—a solution both to economic growth and economic mobility of individuals and families.

An increasing dominance of the narrow neo-liberal view of education has destabilised the liberal view of education where education is obtained “not only to material progress but also to the higher level of civilisation ethos, enlightenment, and democratic citizenship”.22 The deeper social goals of education, recognised as “democracy of education”, has largely been undermined in the current market-driven higher education system. “Democracy of education” allows public campuses to become a place of dissent, protests, and security for the aspirations of the marginalised sections, advocacy for social justice and equality principles.

Technological education has privileged the demands of the market and industry over the needs of democracy to create an egalitarian society. Mona Mehta and Sharan Raghubir rightly explained how an engineer is trained to “make” and “innovate” for a demanding economy without understanding the social processes that create certain “demands” in the first place and to know whether manufactured goods are distributed fairly in an unequal society like India. The technological institutes must respond to the dominant discourse on develop-ment and articulate paradigmatic ideas of what development ought to be for India’s democratic mission. Those coming out of these institutes need to become thoughtful leaders on the question of India’s development rather than passive suppliers of technology.23

In this contemporary era of neo-liberal capitalism, higher education has become more of an investment good than a social good. The basic principle in which the market for higher education is supposed to differ from the market of a commodity is that education is not for doing business. The providers of higher education or universities need to function as not-for-profit organisations. Therefore, it becomes imperative to know what inspires educational providers or institutions to achieve this objective. The application of market principles in higher education questions the basic objectives of education. Is it functioning on behalf of the market or for society? It is argued that market is synonymous with commodification and the more we treat education as any other consumption good like any marketable product, the more we deprive it of its vital role in building a democratic, humane and inclusive society.24

The high demand of IT-related courses such as electronics, engineering, computer science, management courses and a steep decline in the demands of liberal arts, humanities, social sciences, natural and physical sciences have forced several universities to shut some of these departments and courses. Private universities mainly prefer and offer management and IT-related courses. This has resulted in the uneven development of higher education.

(f) Market and Inherent Inequality

Markets are inherently “unequal”. Though markets claim that as institutional arrange-ments they are neutral and provide equal opportunity to all in the normative sense, however, in practice, these accentuate deep inequalities as not all the students are equally positioned in terms of “command over resources”. In other words, not all the students have similar “market capacities”25 to participate in the market as rightly articulated by David Hogan. Market capacities include “informational resources”, various elements of social and cultural capitals in terms of education and networks and other such factors. Those who are left out of the market become the victims. This is a far more serious problem in the education sector, as today education has become more of an investment good than a consumption good. The denial of quality school education incapaci-tates individuals from the subaltern castes to social mobility. David Hogan states how education markets:

“are not just mechanisms that record and aggregates ontologically prior preferences. Rather, markets are structures of power organised around a system of social relations that ‘structure’ social actions in determinate ways in which the possession of certain attributes or market capacities advantages some individuals and groups relative to others”.26

The market, as generally understood, is an institutional management that facilitates the transaction between two kinds of economic agents with conflicting objectives—the consumers, and the producers. Access to higher education may suffer as privatisation raises the cost of education, and merit is bypassed as a new class of consumer-students emerges with money power that can now choose their product even across providers. The self-financing courses have the virtual freedom to determine the fee structure. The private sector periodically revises the fee structure and loads it with hidden and unjustified demands. The prevalence of capitation fees has a detrimental effect on access despite the policy of the reservation system. It is, therefore, undesirable for the private sector to have autonomy over the fee structure in higher education in the larger interests of society. Moreover, freedom with respect to prices would mean acceptance of making higher education a profit-making institution. This notion goes against the objective function of education, which is to build an inclusive and democratic society. Increasing the capitation fees with the justification of easy availability of loans does not alleviate the problem, as there are many shortcomings of even interest-free education loans for a country like India.27 The private institutions’ argument against affirmation policies on the ground of “efficiency” is also questionable. Poor student outcomes and low value added by the private institutions go against the efficiency argument often made by the private sector. The high growth of the private sector in higher education has serious implications on the social justice and equality principles of society. Private institutions use the “democratic” language which is high on rhetoric to articulate false logic in their arguments. It substitutes the merit-based “non-discriminatory” admissions for equality-based “reservation”. The non-discrimi-nation argument made by the private sector is in line with the merit-based argument. The rhetoric behind this argument is that it believes in “equal opportunity to all” irrespective of class, caste, and gender; nevertheless, in reality, the private sector implicitly gives privileged treatment to the one who has the ability to pay.28

Deepak Nayyar describes how globalisation has influenced the functioning of higher education. Domestic as well as international trade has become acceptable phenomena, along with the emergence of commercially motivated new forms of internationalisation. These trends are noticeable in many developed countries and even in a few developing countries. For instance, as a service, higher education was tradable only in one category where the consumer of a service moved to the status of a producer. Today, however, the cross-border transaction in higher education has entered into each of the following three categories: a) those in which the producer moves to the consumer, as universities, have established campuses in different parts of the world, b) those in which either the producer or the consumer moves to the other, as university-run short-duration courses or summer schools either on their own campuses at home or in leased facilities abroad in the home countries of the students, and c) those in which neither the producer nor consumer moves to the other, as distance education, satellite, open courseware or massive open online courses (MOOCs) do not require physical proximity between the teacher and the students. This opportunity and access nevertheless come at a cost, which may not be affordable to the disadvantaged social groups of a developing country like India.29

The neo-liberal theorists disregard the inherent power inequalities in society. The subaltern classes get lost in this new regime of market-driven inequalities. The question thus remains: what do disadvantaged social groups do in this market-driven fast-changing scenario?

We see that market and globalisation offer a blend of opportunities and threats for higher education. How can we capture the opportunities and avoid threats set free by the markets? This is the challenge one needs to deal with. One thing is certain: that we cannot rely on markets to shape and govern our education and research agenda in higher education. 


1. Bhushan. Sudhanshu (2013): “Higher Education in 12th Plan: Paradigm Shift” in Economic and Political Weekly, Vol. 48, Issue No. 4, January 26, pp. 17-19.

2. Eldho Matthews et al. (2013): “Engaging the Corporate Sector” in Economic and Political Weekly, July 20, Vol. XLVIII, No. 29, p. 41.

3. Naik, J. P. (1975): Equality, Quality and Quantity: The Elusive Triangle in Indian Education (New Delhi: Allied)

4. Tilak, Jandhyala J.B.: (2013a): ”Higher Education in BRIC Member Countries” in Economic Political Weekly, Vol XLVIII, No. 14, pp. 41-47.

5. Teixeira, Pedro, Ben Jongbloed, David Dill and Alberto Amaral (2004): “Market in Higher Education: Rhetoric or Reality?” pp. 3-4.

6. Hussain, Sadaf, Yadav and Vijayalaxmi (2016): “How the Voucher System Can Improve the Nation’s Quality of Education“ Daily News and Analysis, May 25.

7. Olssen, Mark (1996): “In Defense of of the Welfare State and Publicly Provided Education: A New Zealand Perspective”, Journal of Education Policy 11 (3), p. 197.

8. Ibid., p. 208.

9. Pathak, Avijit (2009): Recalling the forgotten: Education and Moral Quest, (Delhi: Aakar Books), pp. 155-56.

10. Nayyar, Deepak (2013): “Globalisation: What does it mean for Higher Education Concern” in Higher education in India: In search of Equality, Quality and Quantity, (ed.) J.B.G. Tilak (New Delhi: Orient Blackswan Private Limited), p. 465.

11. Tilak, Jandhyala. J.B.: (2013b): “Higher Education in India: Hanging between State and Market” in Higher Education in India: In search of Equality, Quality and Quantity, (ed.) J.B.G. Tilak (New Delhi: Orient Blackswan Private Limited), pp. 391-405.

12. GoI (2011): Consolidated Working Group Report of the Department of Higher Education for the Twelfth-Five Year Plan on Higher Education, Technical Education and Private Sector Participation including PPP in Higher Education (New Delhi: Ministry of Human Resources Development, Government of India).

13. GoI (2012): Commission on Corporate Sector Participation in Higher Education: Report of N R Narayana Murthy Committee (New Delhi: Planning Commission, Government of India).

14. Mishra, Alya (2011): “India: Regulation Lags Private Sector Growth”, University World News, Issue No. 197, viewed on June 11, 2017.

15. Tilak, Jandhyala J. B: (2013a): op. cit.

16. Patnaik, Prabhat (2010): ”A Left Approach to Development”, Economic and Political Weekly, Vol. 45, Issue No. 30, July 24.

17. Sen. Jhanhvi (2015): “Commodification of Giving Back in a Neo-liberal World” in Economic Political Weekly, Vol. 50, Issue No. 42, October 17, p. 23.

18. Bernard D’ Mello (2013): “The Near and the Far’: Why is Indian Political Democracy is Rotten?”, Economic and Political Weekly, Vol. XLVIII, No. 22, June 1, p. 36.

19. Beckett, A. (2010): “Inside the Bill and Melinda Gates Foundation”. The Guardian, July 10 as cited in McGoey (2012:191).

20. Kapur, Devesh and Pratap Bhanu Mehta (2004): “Indian Higher Education Reform: From Half-Baked Socialism to Half-Baked Capitalism”, CID Working Paper No. 108, September, Centre for International Development, Harvard University, p. 44.

21. Gupta. Dipankar (2016): “Social Science and Democracy” in Economic and Political Weekly, January 3, Vol. LI, No. 4, p. 31.

22. Maharatna Arup (2014): “Invasion of Educational Universe by Neo-liberal Economic Thinking” in Economic and Political Weekly, September 13, Vol XLIX, No. 39, pp. 61-69.

23. Mehta. Mona. G, Sharan Rughubir (2016): “IITs and the Project of Indian Democracy” in Economic and Political Weekly, Vol. 51, Issue No. 11, March 12, pp. 12-14.

24. Chattopadhyay, Saumen: (2013): “The Markets in Higher Education: Concern for Equity and Quality” in Higher education in India: In search of Equality, Quality and Quantity, (ed.) J.B.G. Tilak (New Delhi: Orient Blackswan Private Limited), p. 33.

25. Hogan, David (1999): “The Social Economy of Parent Choice and the Contract State” in The New Contractualism, (eds.) Glyn Davis, Barbara Sullivan and Anna Yeatman (South Melbourne: Macmillan Education Australia)

26. Ibid., p. 330.

27. Chattopadhyay, Saumen: (2013): op.cit., pp. 434-444.

28. Nayak, Dhanwanti (2014): “Understanding the Logic of Neo-Liberalism in Education” in Economic and Political Weekly, March 29, Vol. XLIX, No. 13, pp. 10-12.

29. Nayyar, Deepak (2013): op. cit., pp. 461-471.

The author is doing research at the Centre for Educational Studies, Indian Institute of Education, Pune.

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