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CHAPTER 3

PRIVATISATION OF HIGHER EDUCATION

3.1 Introduction

Education is always one of the most important needs of human beings. It is the

process of instruction which is aimed at the all round development of children.

Human development is the real indicator of the advancement and promotion of

a society. The main function of higher education is to add real value to human

resources and produce wealth creators and leaders in all fields like business,

professions, politics, administration etc.

Emergence of knowledge as driving factor results in both challenges and

opportunities. Knowledge helps to fulfill one‟s potential and it is also the key

for mobility and economic growth. An educated population is the

precondition for economic prosperity of any nation. Higher education was

considered as a priority goal in independent India since it was perceived as a

promoter of economic growth and technological development. It also was

thought of an important instrument of equal opportunity and upward social

mobility (Channa, 2004). Over the past six decades, India made considerable

efforts in the field of higher education. Indian Institutes of Technology and

Indian Institutes of Management have emerged as the institutes of excellence.

Today majority of all developing countries are under great pressure to cut

down the public spending on higher education. The structural adjustment

programme favoured by the IMF and World Bank stressed on reduction in

public expenditure, on account of budget deficits and external debts. Due to

structural adjustment program, many countries tried to explore alternative

sources other than the public treasury for various development programmes. In

the context of higher education, advocacy of private financing has become

increasingly common.

The nature of public policies in higher education in India during the couple of

decades of the past century was not clear. At the beginning of 1990s, wide

spread laissez-faire approach could be noted with respect to higher education

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policies (Tilak, 2014). It was certainly responsible for the rapid growth of

private higher education.

3.2 Need for privatisation of higher education

Education universally is recognized as an important investment for

development of human resources. It is a key for technical innovation and

economic development. Providing education to all human beings is one of the

primary objectives of the government. Higher education was largely funded by

the central and state governments till the early nineties. After 1991 the policies

of the government have dramatically changed. The government started to

discuss removal of public support to higher education and make it self–

financing (Rani, 2011). Due to the wave of privatisation of education in our

country, government has diverted its focus from higher education to primary

education. The government urged the private sector to enter this field of higher

education. The government allowed the private sector to establish fee-paying

and self-financing institutions to meet the increasing demand for higher

education for specific courses. It indicates that the role of government

underwent a change. The government became the provider as well as regulator

of higher education.

The Prime Minister‟s Council on Trade and Industry, in a recent report, has

observed that education is universally mobilizing investment in human capital

(Premsai, 2014). Providing free primary education has been stated in the

constitution as one of the objectives of the government. This has had an

adverse impact on investment in higher education. Universities have always

tried to influence the government to release more funds for higher education.

However the government has been seeking alternative sources as well for

funding higher education.

The Government cannot take up the responsibility to provide higher education

for the rapidly expanding higher education. The private sector has to be roped

in. However it is also the responsibility of the government to control the

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commercialization of higher education once the private sector is allowed to

play a major role.

3.3 Financing reforms in higher education

The mode of financing higher education in the public sector is central to

higher education policy making because it reflects how education is provided

to society and at what price. It also indicates the policy stance of the

government towards higher education (Chattopadhay, 2007). In the post

economic reforms period, since 1991 till today, different commissions and

committees have been constituted by the government on higher education.

One committee on UGC funding of institutions of higher education was set up

under the chairmanship of Justice K. Punnayya (UGC, 1993) and the other

high power committee was set up under the chairmanship of D. Swaminadhan

for mobilisation of additional resources for technical education (AICTE, 1994)

to outline methods of mobilisation of resources for higher education. The

recommendations of both the committees set the direction of the government

policy with regard to financing of higher education in the years to come. Both

committees submitted their reports almost at the same time in 1993-94. Both

the committees stressed the importance of state financing of higher education,

and argued for a firm commitment on the part of the government to finance

higher education. The recommendations included - raising fee levels, raising

of resources through consultancy and sale of other services, introduction of

self-financing courses, introduction / revitalisation of student loans etc. The

government accepted most of these recommendations.

Apart from the reduction in public expenditures the efforts were also initiated

towards „direct‟ privatisation of higher education. The historical judgment of

the Supreme Court in 1992 practically banned capitation fee colleges, stating

that capitation fee is a patently unreasonably, unfair and unjust‟. This was

followed by another historical judgment in 1993 that paved the way for the

growth of the same capitation fee colleges under the name of self-financing

colleges.

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A Private Universities Establishment and Regulations Bill was introduced in

the Rajya Sabha in August 1995 with a view to providing for the

establishment of self-financing private universities. The bill was referred to

the Standing Committee to invite views on the subject. The private sector was

not happy with some of the provisions in the bill, especially those pertaining to

endowment funds, regulation by government bodies and subsidised education

for nearly one-third of the intake. Although the bill was not passed, discussion

on the need for a private universities bill was continued.

Ministry of Finance, Government of India issued the discussion paper titled

Government Subsidies in India in 1997. This paper advocated a change in the

policy regarding financing of higher education. The paper highlighted a set of

social and economic services. These were classified into public goods, merit

goods and non-merit goods. The education upto elementary level was

classified as a merit good, whereas the education upto secondary and higher

education was classified as non-merit good. The paper recommended the

reduction up to 25 % over a period of five years (Singh, 2010). The

Government of India in the report of the Ministry of Finance on Central

Government Subsidies in 2004 revised its earlier position of defining higher

education as a non-merit good and reclassified it as a „Merit II‟ good. This

emphasized the need for public subsidies to a certain extent, but the

government‟s perspective regarding the role of higher education remained

unchanged (Singh, 2010).

The report on a policy framework for reforms in education submitted to the

Prime Minister‟s Council on Trade and Industry in April 2000 proved to be

another significant movement in the education policy in India. This report was

prepared by the special subject group on policy framework for private

investment in education, health and rural development with business tycoons

Mukesh Ambani and Kumarmangalam Birla as its convenor and menmber

respectively (Ambani and Birla, 2000). Given the sustained fiscal deficits the

report suggested to overcome the problems in financing higher education. The

first method focused on the cost recovery of higher education whereas the

second method explored the development of the credit market for education.

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This Committee noted the critical importance of the role of the state in

development of education, including higher education in several developed

countries of the world. The report strongly argued in favour of restricting

primary education to public sector and reserving the higher education entirely

to private sector. The report emphasized the need to pass the Private

University Bill. It also recommended that user pay principle should be

adopted. This may be supported by loans and grants to economically and

socially backward sections of society. Thus, the recommendations of the

Ambani - Birla report emphasized reorganisation of higher education sector in

the country on commercial basis.

Central Advisory Board of Education committee (CABE 2005) was

constituted by the Government of India to examine in detail the critical issues

relating to financing of higher and technical education. It recommended that

generous state funding of higher education was critically required for

quantitative expansion for improvement in quality and excellence for

preserving and promoting equity in higher education. The committee

emphasized the need for developing careful monitoring mechanisms so that

loans are available mainly to economically needy and educationally deserving

students to pursue higher education. It also suggested setting up of a body like

Higher Education Finance Corporation (HEFC). This would receive

contribution from Government and corporate sector to coordinate the student

loan schemes being operated by several banks and to provide scholarships and

soft loans to students on its own. Regarding mobilization of additional

resources, the committee proposed that universities might be encouraged to

generate additional revenue from non - governmental sources, without

affecting equity and other academic aspects of institutions.

The National Knowledge Commission established as an advisory body to the

Prime Minister of India, in its report contended that the expansion of our

system of higher education was not possible without enhanced levels of

financing. This necessarily comes from both the public and private sources.

The Commission recommended that the government support for higher

education should be at least 1.5 per cent of GDP from a total of 6 per cent of

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GDP for education (NKC, 2007). Therefore it is essential to explore wide

range of possibilities which would be complementary in nature in order to the

expenditure on higher education. The commission also recommended tapping

such resources as alumni contributions, licensing fees, or user charges for

using facilities in universities by outsiders. Thus, the committee largely

emphasized the mobilization of internal and private resources by the higher

education institutions. For the management of these recourses the commission

also proposed the creation of supportive institutional mechanisms that would

enable universities to engage professional firms for the same.

The Government of India constituted a committee in 2008 to advise the

government on Renovation and Rejuvenation of Higher Education under the

chairmanship of Prof. Yash Pal. The committee submitted its report in 2009

(MHRD, 2009). The committee recognized that the cost of providing quality

education was increasing. Therefore the universities require constant infusion

of funds to maintain and upgrade their facilities, resources and technologies.

The committee recommended that the responsibility of financing higher

education must be borne by the State. At the same time the need for exploring

complementary sources of funds was also emphasized. There is an urgent need

to bring about change in the regulatory systems. This would encourage

philanthropy on the part of society. Further it stated that universities and other

academic institutions should be able to hire professional fund raisers and

professional investors to attract funding from other than government sources.

The various policy documents clearly reflect that liberalisation of Indian

economy as a result of structural adjustment programmes led to the policy

shift regarding financing of higher education in India. This policy shift is also

influenced by the policies of World Bank and other international agencies. On

the one hand, the overall thrust in these policies is on deregulation,

privatisation, introduction of cost recovery mechanism and on the other hand

enhancement of public financing and equity considerations also find their

expression.

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Thus, in post economic reforms period, the recommendations of various policy

documents have clearly indicated the impact of neo-liberal ideology on higher

education policy making in our country. Most of the reform measures

recommended a two way approaches for higher education - improving

efficiency in the functioning of public institutions on the one hand, and

mobilizing resources from non - governmental sources on the other. The main

aim of the reform measures is to increase the efficiency level in resource use

so that no need to allocate additional resources to the sector. Reform measures

help to find out new option of funding or provide other alternatives for

financing higher education. One important method is to shift the burden of

cost from the public to private sector (Va r g h e se , 2 0 0 0 ) .

3.4 Privatisation of higher Education

Privatisation is one of the main global trends in higher education. It is

generally understood as the intensive development and expansion of private

institutions, increased reliance of public institutions on private funding, and

operation of the institutions in a businesslike manner. Privatisation implies

applying market principles to the functioning of public institutions of higher

education. As the ownership and management of the institutions remain with

the public authorities, the services provided by the institutions are priced

(Varghese, 2004). The price that is student fees levied may be equivalent to

the full cost or full cost-plus-profit in some instances.

The private sector implies the non - state sector in higher education. The

institutions are owned and operated by private individuals or agencies. In most

cases, this sector does not receive funding from the government and also it

does not rely on the state funding for its growth and expansion, even though at

times they receive partial public support in some countries (Varghese 2004).

Private higher education institutions can be universities or non - university

institutions offering professional training courses. Private university offers

courses leading to a degree, while courses offered in other types of private

higher education institutions very often lead to a certificate or a diploma. The

most interesting phenomenon has been the setting up of professional

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institutions for imparting job-oriented training modules, which entitle the

recipient to an immediate employment opportunity.

Privatisation can take many forms and designs. According to Bray (1998),

there can be four different models of privatisation in higher education sector –

(1) Public production with public finance, (2) public production with private

finance, (3) private production with public finance and (4) private production

with private finance.

The structure of institutions in India shows that the traditional pattern of

mostly public universities and private colleges still continues, although the

share of private sector in both categories of institutions has increased. The

most common form of private higher education in India is self-financing

institutions, which do not receive any financial support from the government.

They are owned and operated by private enterprises or individuals and for the

purposes of funding they primarily rely on the fees levied from students.

3.5 Factors responsible for privatisation of higher education

There are number of important factors that led to the emergence and rapid

expansion of private higher education in India. Rani (2011) has classified them

as push and pulls factors. They are discussed here briefly.

The demand for higher education has been increasing extremely rapidly all

over world. India is no exception to this phenomenon. The university system is

trying to accommodate the increasing numbers into its fold. It has been

extremely difficult for traditional universities mostly public universities to

fulfill the aspirations of young entrants into higher education. There is a lot of

pressure on the universities to offer courses that would enhance the

employability of the students. However the process of bringing about change

the existing courses i.e. academic programmes, syllabus, evaluation system etc

is very slow. The private institutions could cater to the demand for courses that

were in demand. There is demand for collaborating with the industry at every

stage. There is a need to give a boost to building linkages between universities

and industry. There is an increasing need to design new courses which would

be inter disciplinary as well as multi disciplinary. Over the years it has been

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seen that there is tremendous expansion of courses in the field of media,

management, law, engineering, medicine, electronics and so on. The

increasing demand and failure of traditional universities to keep pace with the

increasing demand has facilitated the entry of private sector in a big way.

The „push‟ factors are as important as the pull factors. Over the years the

government has been arguing that there is tremendous resource constraint.

This has forced the government to opt out of the higher education field. While

the focus on primary education there is increasing dependence on the private

initiatives. Not only that the government is expressing inability to increase the

expenditure on higher education the existing State supported institutions are

also facing a very bleak future. The inability to carry on with such constraints

the public institutions of higher education have been pushed to offer a large

number of self-financed courses.

3.6 Features of private higher education

3.6.1 Unprecedented growth

There has been tremendous growth in private higher education from the

beginning of the 1990s. This growth has been unprecedented; infact, before

1990 there were very few private institutions. By private institutions it is

meant that private, self-financing colleges, which started emerging during the

last quarter of the past century. The growth of self-financing colleges has been

phenomenal. The number of private colleges in several states grew from a few

in late 1980s to several hundred, particularly in the case of engineering

colleges, management and medical institutions. Private, self-financing colleges

grew to such a level that in relative size, the public sector became

infinitesimally small.

In some specific areas like engineering and management, more than 90% of

institutions are in the private sector (Tilak, 2014). The private sector has also

spread to arts and science colleges and even to intermediate colleges and

polytechnics. They are spread all over the country from Andhra Pradesh,

Karnataka, Tamil Nadu, Maharashtra and Kerala to Odisha, Rajasthan, Punjab,

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Haryana and Assam. Attempts have been made to promote private sector

under different modes of public - private partnership. This is already

happening at a noticeable rate in different states. If such instances continue to

occur on a larger scale, there will be soon no public institutions of higher

education at all. The simultaneous existence of public and private sector

institutions of higher education in our mixed economy poses no problem,

rather this would create competition which in turn would produce efficiency.

But due to rising private higher education institutions, there is no simultaneous

existence between public and private sector institutions, rather rapidly growing

private sector and a fast declining public sector.

3.6.2 Sustaining the privatisation drive

There are different forms of sustaining the privatisation of higher education

taking place in India. One of the ways is financial in nature. Public institutions

are increasingly forced to mobilize finances from the multiple sources. Student

fees of different types have been on the rise in most public institutions. Several

items that used to be provided free of cost - or for nominal fee are being

charged heavily. Items in this category include application fees, examination

fees, and fees for mark lists etc. This method is largely used to recover the

increasing costs of the delivery of education.

The other instrument which is adopted vigorously is the educational loan

programme. Educational loans have replaced scholarships in policy discourses

on higher education. It is argued that even needy students need not be given

scholarships instead, they can be asked to go for education loans. When the

students loan programme was restructured in 1990s, the government argued

that it should be developed in such a manner that a revolving fund could be

formed out of loan repayments, which would be sufficient to finance higher

education as a whole ( Tilak 2014). This way the government would not have

to finance higher education from the public exchequer in the future.

One of the most prominent forms of privatisation is the large-scale

introduction of self-financing courses in public institutions. The resources so

generated are being used for other university activities, for which state funding

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has been inadequate or even missing. Self-financing courses have been

introduced in almost all departments, in universities and colleges, both central

and state level, including some of the best universities. These courses are run

more efficiently than others, where administrators are far more interested in

these courses because they generate revenue that can be used without formal

permission from the state, or other bodies like UGC. Thus these public

institutions are being financially self sufficient on a larger scale.

Private higher education is measured in different degrees like predominantly

private, moderately private and insignificantly private higher education system

on the basis of number of students and institutions of higher education (Tilak

2014). Our higher education system can be described as predominantly

private. The vast number of private unrecognized institutions has been

responsible for the tremendous expansion of the private higher education

sector. It has reached alarming levels in India. Our private higher education

system is much higher than in any parts of the world (Tilak, 2014).

3.6.3 Replacement of profit by philanthropy

The third important feature of the private education system refers to very

significant decline in philanthropy in India (Tilak, 2006). At the time of

independence, philanthropic and voluntary contributions constituted

reasonably good proportion of the total education funding but they have dried

up over the years, and have come down to negligible levels in recent years.

People with some money in the 1950s and 1960s used to donate to public

institutions or set up philanthropy - based private institutions. Today, even

those with even a small fraction of that money prefer to set up a private, self-

financing college or university. This is because investment in colleges or

universities is found to be the most rewarding, yielding quick and very high

pay-offs, with little risk. Philanthropy and charity have been replaced with

profit motive and financial interest. So the growth of profit - oriented

commercial institutions has been an important feature of the 1990s and

beyond, compared to the philanthropy - based private institutions of the past.

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3.6.4 Quality of private higher education

There is a strong misconception that the quality of private higher education is

very high, compared to public education. But many private higher education

institutions have no libraries, laboratories, or research programmes. They

concentrate on saleable courses of study, prefer short term to long term

programmes and have under qualified and under paid teachers. The teaching

staff required to impart meaningful teaching is also inadequate. Research has

taken back seat in many of the institutions where faculty recruitment has not

happened for many years. This has greatly affected the quality of the students

coming out of these institutions. The idea that quality may improve due to

private participation has proved that to be untrue in such circumstances.

Privatisation in education has clearly become a license for money making and

exploitation of our youth.

Private educational enterprises are guided by private demand, and prefer to

concentrate on courses of study for which students are ready to pay heavily; in

other words, those that are revenue generating and surplus generating, rather

than those traditionally considered necessary for a good higher education

system. As a result, some disciplines of study are sacrificed while some others

are pampered. Subjects that currently flourish in India include engineering,

management and commerce, and disciplines like the arts, humanities and

social sciences are ignored. This produces a distorted, unbalanced and

unsustainable higher education system. Further, considering global rankings as

indicative of the quality and standard of higher education, it can be seen that

very few private institutions are in the global rankings.

3.6.5 Question of equity

It is admitted that the private higher education have improved access and

quality but still its equity would be at risk. Equity in higher education is one

aspect that will be seriously compromised. Private education widens

inequalities not only in education, but also in economic and social spheres.

After all, no private institutions in India will be ready to promote equity on a

satisfactory level, grant access to the weaker section, or provide liberal

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scholarships. The government‟s intervention in this regard, such as fee

reimbursement schemes, access to loans, interest subsidy on loans, or even

quotas in admissions to private institutions for weaker sections, would not help

much. In fact these misaligned initiatives would contribute more to

strengthening the private sector than to reducing inequalities in higher

education and in society.

3.6.6 Student fees

The one important feature of private higher education institutions in India as

well as of those in other developing countries is student fees on which they

exclusively rely. Student fees account for 100% of the total costs of higher

education in these institutions. They invest little to nothing of their own

resources and whatever they do invest is recovered soon, in couple of years,

from the students. Also, private institutions make no attempts to generate any

additional sources of money, in contrast to some major private universities in

western countries like the US, where, according to statistics, students‟ fees

account for only a small fraction of the total costs of higher education (Tilak

2014). In the US, private universities do not get support from the fedral

government or the state; the fees contributed by the students constitute less

than 40%, with the remaining 60% met by non-state and non-student sources

(Tilak 2014). But in India, higher education is either financed by state and

students or solely by the students. There are no other sources of funds

available for higher education. Private management or rest of the society does

not contribute any financial resources to education, except for initial

investment that is returned with profits.

In the same context, it may be underlined that the fees in private universities in

India are about 50 to 80 times higher than those in public institutions. In

contrast, private universities in countries with a sizeable private sector, like

Japan, Korea or the US, charge a fee that is 8 to 10 times higher than fees in

public institutions. Therefore, there is a very significant difference between

private education in India and private education in other parts of the world.

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The private sector in the western countries grew historically, with a

consideration to providing education to the people and complement to public

efforts. In India, however, the private sector is growing due to public sector

disinvestment programme and state withdrawal from higher education is

becoming increasingly strong. The private sector is taking advantage of this

situation. Unlike in the west, private institutions in India are not set up to

complement public institutions, but to capitalize on the public sector‟s

inadequacy.

3.6.7 Public private partnership

The shrinking fiscal space has given rise to the thought of inviting Public

Private Partnership (PPP) in the administration and financing of higher

education. Fiscal space can be defined as room in government‟s budget that

allows it to provide resources for a desired purpose without jeopardizing the

sustainability of its financial position (Muzammil, 2010). PPP is the new

dimension of the joint responsibility for the development of education sector

by non - public resources. The sustainability of any sector depends on the

viability of costs and benefits and PPP in education has come to flourish on

the principle of cost and benefit sharing. Under the influence of globalization,

this change is also visible in higher education not on free provision but on

priced supply (Muzammil, 2010)

3.6.8 Regulatory framework

Another important aspect relating to private higher education is its regulation.

Government should develop an enabling and regulatory framework so that

private education institutions meet public standards and adhere to public goals.

The ability of the government to regulate these politically and economically

powerful institutions is limited. The government action is always influenced

by the market forces as they are so strong and imperfect particularly in

developing societies. While the government can formulate effective

regulations, ensuring their proper implementation and a fair performance from

private institutions, is a bigger risk. Some of the bills introduced in parliament

that aimed at checking corrupt practices in higher education and the setting up

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of tribunals and proper accreditation authorities, have remained unapproved

for a long time (Tilak, 2010).

3.7 Evolution of privatisation in higher education

The Indian policy response to private higher education has gone through a

process of evolution from reliance on public institutions to promoting private

higher education institutions to expand the system. The evolution of the policy

shows that India, like many other countries, adopted privatisation measures

and also encouraged the private sector in higher education.

In the initial years of independence, India promoted the public sector in all

spheres of activity including education. The country nationalized many private

institutions of higher education through public universities. This also implied

transforming the existing private higher education institutions into public

institutions (Gnanam, 2008). This was a stage of „publicisation‟ of private

institutions.

This trend changed when self financing courses were offered in public

institutions. This was more a stage of privatisation of higher education in

public institutions since the ownership of the institutions remained with the

public authorities even though some of the courses were self-financing. “The

committees were appointed by the University Grant Commission (UGC) and

the All India Council of Technical Education (AICTE) also recommended

privatisation of higher education” (Varghese 2012). Some of the state

governments went ahead with the establishing self-financing courses in public

institutions and self-financing public institutions. The fee level was decided by

the state government or the university to which the institution was affiliated.

The 1990s witnessed the establishment and fast expansion of self-financing

private higher education institutions. The self-financing colleges, which are

commonly known as capitation fee colleges are mostly for profit motive

institutions (Tilak 1994). Most of these institutions were established in the

subject areas of engineering, medicine and management (Agarwal 2007). The

southern states of Andhra Pradesh, Karnataka, Tamilnadu and the western

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state of Maharashtra led private higher education (self-financing colleges)

revolution in India. These institutions were concentrated in a few states,

students from all parts and regions of India sought and got admission into

these colleges.

India had private colleges but not private universities. Many private providers

felt that the rules and regulations of the public authorities were very strict and

severe. To get away free from this and to attain the authority to award degrees,

they sought deemed - to - be university status to private institutions and many

private institutions became deemed universities (Agarwal, 2007). A Private

Universities Establishment and Regulations Bill was introduced in the Rajya

Sabha in August 1995 with a view to providing for the establishment of self-

financing private universities. The private providers were not happy with some

of the provisions in the bill. The bill was not passed and discussion on the

need for private universities bill continued. Since 2002, several state

governments have passed Private University Acts. Chhattisgarh took the lead

in this act and was the first officially established private university in India in

2002 namely Sri Rawatpura Sakar International University (Varghese, 2012).

This was followed by many state governments - Assam, Haryana, Himachal

Pradesh, Gujarat, Orissa, Punjab, Uttar Pradesh, Uttarakhand, etc.

3.8 Privatisation policies for higher education

At the policy level the process of privatisation is rather complicated especially

so in the field of higher education. There are three important dimensions of

higher education:

a) This involves transfer of ownership and management of institutions from

government to private sector or a combination of government and private

sector.

b) This refers to the shifting from present public financing of government and

government financed private colleges to private financing. This includes

private foreign financing as well. There can also be a combination of public –

private financing of government colleges.

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c) This includes the establishment of new colleges as well as continuation of

the established colleges under entirely or in collaboration private ownership,

management and financing.

Private educational institutions in India could be classified into following

categories:

(A) Aided colleges

Aided colleges are privately managed but are funded by Government. Aided

institutions is a private professional educational institution that receive

financial aid or assistance either in whole or in part from Central Government

or State Government under the control of Central or state Government

disbursing grants-in aid or financial assistance. However, aided colleges are

getting financial help from the government they will always need to follow

directives from the government and they are not free to make any changes

without permission (Premsai, 2014). There are many aided colleges which

used to receive a substantial amount of aid from the government in order to

bear the operating costs. However over the years these institutions are getting

only salary grant from the government. The extent of non - salary grant has

ceased altogether or it is insignificant given the need for such funding.

This has been responsible for many aided colleges to start self-financing or

self-supported courses. There is also higher demand for courses with

employment potential in higher education market. This has facilitated the

development of unaided courses in private aided institutions which has given

the boost to the growth of private sector education. The private colleges used

to receive aid from various sources but that did not help them to bring down

the expenditure of the government in higher education.

(B) Unaided colleges

Unaided Colleges are privately managed and they have to raise their own

funds. It was discussed in the decision of supreme court that unaided colleges

can admit students of their choice and the state government or the university

may not be interfere in that matter, so long as the admission to the unaided

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educational institutions is on a transparent basis and the merit is adequately

taken care of (Premsai, 2014). Unaided Colleges are privately managed and

they have to raise their own funds. Since they are self-funded in nature they

always have a greater amount of autonomy and freedom.

There are major differences between aided and unaided colleges. Aided

college receives funds from the government but unaided college does not

receive any support from the government in the form of funds. While aided

colleges get monetary and non - monetary support, unaided colleges do not get

any support from the government. The southern states of Andhra Pradesh,

Karnataka, Tamil Nadu and Western state of Maharashtra led the private

higher education initiatives in the form of self-financing colleges in India.

Most of the self-financing colleges were established in the subject areas of

management, computers, engineering etc. Many students from all parts and

regions of India sought and got admission into these colleges. A major part of

India's private higher education surge came from the proliferation of private

self-financing colleges mostly in the technical and professional fields.

3.9 Positive aspects of privatisation of higher education

There are number of positive aspects of privatisation of higher education

There is growing demand for better quality higher education. At

present this is being fulfilled only by private institutions / universities.

Privatisation at present appears to be the only way to absorb the

increasing number of students into higher education.

There is constitutional obligation to provide free and compulsory

primary education. The government has accordingly increased the

investment in primary education. However the investment in higher

education has suffered. In order to meet the growing needs of the

students for higher education, it is a crucial that private sector plays a

major role.

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There is little government intervention in private institutions.

According to Supreme Court, unaided professional institutes are

autonomous in their administration and decisions (Bajaj, 2012).

However private institutions have to follow necessary guidelines

notified by regulating admission, examinations, recruitment of staff

etc.

Private sector in higher education has started many new private

institutions in higher education. This rapid growth of institutions

helped to provide employment to teaching and non-teaching staff.

3.10 Drawbacks

The following are some of the drawbacks of privatisation of higher education

in India

With the initiating role of private sector in higher education, there has

been huge growth in the number of private professional colleges. This

rapid growth has no doubt led to a quantitative increase in the number

of colleges providing higher education but affected the quality of

education on one side and government may not keep sufficient control

over these unaided colleges on the other side.

Due to privatisation, there is the high risk of commercialization of

education. Although a competitive atmosphere would be created, some

colleges would concentrate on profit making rather than on improving

the standard of education.

The victims of commercialization are teachers, students and parents.

Teachers working in these private institutions are found as being

underpaid. Some are terminated at the end of the session. There is

always an uncertainty in their career. Many private colleges appoint

part time and poorly qualified teachers so that they do not have to pay

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much. These teachers are hardly exposed to any in-service training,

orientation courses and research activities.

If the private institutions are given too much independence due to

privatisation, they would create monopolistic situation in higher

education. This would lead to many problems such as high fee

structure, capitation fee, exploitation of teachers, etc. Recently there

was hike in fees in privatised colleges which was a major uproar and

the Government had to give in to the pressure.

With privatisation foreign Institutions have been allowed to enter into

the form of franchise in our country. These Foreign Universities /

Institutions may or may not be recognized in their own countries due to

which there is no control or restriction on the standard of their higher

education.

Most Private colleges although adhering to standard admission

procedures like conducting entrance tests, interviews, etc. tend to admit

students by charging excessive fees. Merit invariably takes a backseat

and those are able to spend more money often tend to get admitted,

without satisfying the admission requirements.

3.11 Devices to safeguard quality and improve relevance

There are important institutional mechanisms for monitoring and regulation of

the quality of collegiate education. There are the National Assessment and

Accreditation Council (NAAC) and International Organization for

Standardization (ISO) 9000 (Narayana, 2006). If NAAC's accreditation is

made compulsory for all colleges, it shall go a long way in professional

improvement of quality of higher education, along with mandatory affiliation

requirements.

An important determinant of relevance of collegiate education is its curricula

for various courses. At present, the universities fix the curriculum for their

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colleges. Thus, colleges do not have autonomy in designing their own

curricula according to the particular needs of students. To bring in

innovations, dynamism, and improve relevance, colleges should seek and

universities must offer academic autonomy. Academic autonomy may go

along with financial autonomy for fixing college-specific student fee structure

and other sources of resource mobilization.

3.12 Conclusion

The entry of private sector in education, especially higher education is not new

to India. Since economic reforms the trend towards privatisation has been on

a large scale. The entry of private enterprise would reduce the burden of state

in providing higher education to its aspiring youth entrants into higher

education. Regulatory management should be put in place by government to

control the private sector in education. The state can not absolve itself from

the obligation of providing education to its citizens especially when the

majority of whom can not afford education in private professional institutions.

To ensure access to higher education by weaker sections of society,

government has to increase public expenditure on higher education. Although

there are many drawbacks of privatisation of higher education, it is necessary

to expand the present educational system. On the whole, an improvement in

the standards of education could be achieved through a balanced relationship

between public and private sector.