As in all segments of the education spectrum in post-independence India in which government expenditure (Centre plus states) has never exceeded 4 percent of GDP per year (cf. 5-7 percent in the US and OECD countries), the demand-supply gap in higher education is huge. Currently a mere 9 percent of Indian youth in the age group 18-24 are enroled in the country’s 509 universities and 31,000 colleges and other institutions of higher education (cf. 20 percent in China, 40-50 percent in Europe and over 60 percent in the US). And as if to add insult to the national interest injured by persistently niggardly government outlays for education, a 2005 McKinsey World Institute-NASSCOM study indicates that over 85 percent of India’s arts, science and commerce graduates and over 75 percent of engineering graduates are unemployable in globally benchmarked multinational companies.
Quite obviously the Central and state governments-dominated higher educa-tion system is inadequate, low grade and needs urgent supplementation. Fortu-nately despite thousand unnatural hurdles strewn in the path of private higher education providers, some of them have established national reputations because of middle class demand for superior study programmes and respected certification. Among them are the Manipal/Bangalore-based Manipal Education Group, Delhi-based Amity University, the Bangalore-based M.S. Ramaiah Group and NIIT University, Rajasthan. Blocked by the Centre, some of them have prompted state governments to enact special legislation to establish them as state universities.
Moreover encouraged by the Supreme Court’s judgement in the T.M.A. Pai Foundation Case (2002,) reaffirmed in Inamdar’s Case (2005) which upheld the fundamental right of private unaided institutions of professional education to determine their own fee structures and regulate admissions, the road for domestic edupreneurs in tertiary education has become smoother, although the apex court’s judgement in the Islamic Academy Case (2003) which permitted state governments to establish fees and admissions committees headed by retired judges to adjudicate whether tuition fees are reasonable and admission processes are merit-based, has muddied the waters.
Against this backdrop and the reality that over 120,000 students from India sign up for study programmes in foreign universities every year where they spend an estimated Rs.17,500 crore annually, after several years of prevarication, last year the HRD ministry finalised the Foreign Educa-tional Institutions (Regulation of Entry and Operations) Bill, 2010 which is awaiting the approval of Parliament. Yet because of the elaborate procedure and tough terms and conditions of entry stipulated by the Bill, its imminent conversion into law has not enthused any of the world’s top 20 varsities to establish campuses in India.
In short, there are emerging opportunities in higher education for determined deep-pocketed edupreneurs. But be prepared for the long haul and make sure you have the benefit of high quality legal advice.