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On self-financing of institutions of higher learning in India



The mammoth system of higher education in India, which is almost wholly government supported, is in deep financial strain, with increasing needs, escalating costs and shrinking budgetary resources. Of late, it is thought necessary to devise means to self-finance these institutions of higher learning. However, the mal-adjustment of higher education with the development of the economy lies in the root of the crisis. In 1998 there were 7.2 thousand colleges imparting graduate and post-graduate education in humanities, social sciences and "academic" natural sciences to 5.7 million students. On the other hand, 600 engineering/technology colleges, nearly 100 agriculture and forestry colleges and about 450 medical colleges, totaling 1150 in number, imparted degree level professional or technical education to about 0.21 million students. The distribution of students in 'general' vs. 'professional' education is 96:4. The revealed preference of students for general education is so much that we find that only 1.86 lakh (1 million=10 lakh) students have gone in for diploma in engineering and only 26 thousand students have opted for paramedical education. Students passing out from secondary schools seldom think of joining institutions of technical training. The ailment of the higher education system in India is not a matter of financial constraint and therefore, its remedy is not a program for self-financing. It is erroneous to think that as long as the institutions of higher learning are financed by the government, they educate students at the lower private cost - that no sooner will the government stop financing them than they will tap their fuel from the market - that the demand for higher education is potent and large, and so on. On the contrary, the demand for higher education is large as long as its price is abysmally low. Higher education - what it means today - is unproductive, nothing other than a conspicuous consumption. The ailment of higher education lies in its being misdirected, ill structured, wrongly prioritized and pitiably obese and corpulent. Establishment of colleges and universities for appeasement of the populist sentiments must give way to productivity-based education. Myrdal predicted the imminent crisis long back. There is need to restructure higher education in India - making it much less 'academic' and much more professional/technical.

Suggested Citation

  • Mishra, SK, 2003. "On self-financing of institutions of higher learning in India," MPRA Paper 1829, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:1829

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    Cited by:

    1. Mishra, SK, 2007. "India’s policy deficit: as I look at it," MPRA Paper 5035, University Library of Munich, Germany.
    2. Mishra, SK, 2003. "Issues and problems in human resource development in the NER (India)," MPRA Paper 1828, University Library of Munich, Germany.

    More about this item


    self-financing higher education in India; Myrdal's observations on education in India; skill formation; unemployability and unemployment; privatization of education; education as a consumption good; higher education;

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy


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