Education sector reform in India Kapil Khandelwal QuoteUnquote with KK www.kapilkhandelwal.com

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Reform in Higher Education Sector in India
for Inclusive National Development
Task Force – White Paper to Ministry of Human Resource Development
Sunil Kumar Alagh and Kapil Khandelwal
Jan 2010

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Table of Contents
EXECUTIVE SUMMARY......................................................................................................................................................3
ACTION PLANNING FOR PRIVATE SECTOR PARTICIPATION .................................................................................................................3
KEY HIGHLIGHTS FOR DISCUSSIONS..............................................................................................................................................3
BACKGROUND...................................................................................................................................................................4
APPROACH........................................................................................................................................................................4
PRIVATE SECTOR PARTICIPATION IN HIGHER EDUCATION ............................................................................................4
SKILL GAPS AND UNEMPLOYABILITY OF STUDENTS PASSING OUT OF HIGHER EDUCATION .....................................5
LACK OF SECTORIAL VOCATIONAL TRAINING STRATEGIES AND POLICIES ..................................................................6
AGENDA FOR HIGHER EDUCATION SECTOR FOR INCLUSIVE DEVELOPMENT.................................................................6
ACTION PLAN TO COVER THE CURRENT SKILL GAP AND EMPLOYABILITY...........................................................................................6
Set up Public-Private Partnerships .................................................................................................................................6
Setting up of a Education Foundation to aggregate corporate funding............................................................................7
Government, Private, Academicians collaborate on syllabus and curriculums – pragmatic and practical......................7
Get Industry to speak in Academic Sessions...................................................................................................................7
Industry Advisory Board Members to Drive Result Oriented Programs...........................................................................7
Time based execution and ongoing measurement...........................................................................................................8
Professors to do internship stints at companies.............................................................................................................8
Vocational School concept to be introduced in higher education schools........................................................................8
GROWTH MODELS IN HIGHER EDUCATION IN INDIA.........................................................................................................................8
Model One: Expansion of a public sector charging little or no tuition fees.....................................................................8
Model Two: Publicly financed fees repaid through the tax system once students graduate............................................8
Model Three: Increased cost sharing combined with higher levels of student aid..........................................................9
Model Four: Expansion of a private sector of institutions...............................................................................................9
GOVERNMENT FOCUS AND INTENT FOR HIGHER EDUCATION ..................................................................................... 10
PRO-STUDENT APPROACH TO FUNDING HIGHER EDUCATION IN INDIA ...................................................................... 11
LESSONS LEARNT FROM DEVELOPED COUNTRIES ..........................................................................................................................11
STRATEGIC APPROACH FOR INDIA..............................................................................................................................................11
KEY POLICY MEASURES FOR REFORMS IN HIGHER EDUCATION SECTOR FOR INCLUSIVE DEVELOPMENT ............... 12
SECTORIAL PLANNING FOR VOCATIONAL DEVELOPMENT................................................................................................................12
COVERING THE CURRENT SKILL GAP AND EMPLOYABILITY.............................................................................................................12

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POLICY ON THE GROWTH MODELS FOR HIGHER EDUCATION IN INDIA ..............................................................................................12
INFORMATION COMMUNICATION AND TECHNOLOGY (ICT) MODELS IN HIGHER EDUCATION ................................................................12
TAX HOLIDAYS AND TAXATION RATES FOR PRIVATE SECTOR HIGHER EDUCATION SECTOR INVESTORS.................................................12
MODEL FOR HIGHER EDUCATION TUITION FEES DIFFERENTIAL STRUCTURE......................................................................................12
DIRECTION ON SOCIAL INFRASTRUCTURE THROUGH CORPORATE EDUCATION FOUNDATION ..................................................................13
CREATION OF NATIONAL BANK FOR HIGHER EDUCATION FINANCING................................................................................................13
APPENDIX 1: LIST OF FOR PROFIT PRIVATE SECTOR INSTITUTIONS OPERATING IN HIGHER EDUCATION IN INDIA 14
BIBLIOGRAPHY............................................................................................................................................................... 16

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Executive Summary
Although India has the world’s largest student population, its policy and direction on higher education sector is
not clearly articulated towards inclusive development. Regulation, size of funding to this sector, both public and
private is one of the key determinants of India’s ability to generate wealth (GDP). Moreover sectorial priorities
and directions in sectors such as health sciences, retail, infrastructure if not clearly addressed could create
future crisis in the economy and further impede economic growth.
In terms of opportunity, the higher education sector for private sector participation would be close to USD 25 to
30 billion. In addition another USD 100 billion would be required for right skilling and upgrading the skills of the
current unemployed people with higher education. A clear policy for private sector participation is required to
encourage investments and balance out the social infrastructure development in education and meet inclusive
country development.
This paper has been drafted after extensive secondary research from various industry reports and discussions
with key stakeholders in the higher education sector.
Action planning for private sector participation
Action plans and policies for encouraging private sector participation in this sector in two key development
areas:
1. Investments in higher education with high vocational success without a profiteering motive;
2. Investment in right skilling and skill upgrading to increase employability of higher educated population
Key highlights for discussions
Several policies need to be articulated for enabling private sector participation in the higher education sector.
These include:
1. Sectorial Planning for Vocational Development
2. Covering the Current Skill Gap and Employability
3. Policy on the Growth Models for Higher Education in India
4. Information Communication and Technology (ICT) Models in Higher Education
5. Tax Holidays and Taxation Rates for Private Sector Higher Education Sector Investors
6. Model for Higher Education Tuition Fees Differential Structure
7. Direction on social infrastructure through Corporate Education Foundation
8. Creation of National Bank for Higher Education Financing

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Background
As per UNESCO Institute of Statistics (UIS), India is home to close to 18% of world’s student population (5-25
years). This is slightly more than China’s 17%. The inequalities are even sharper within because children and
young people do not have equal access to education. While number of action steps and policies measures have
been taken up by the Government to address the quality of education in the K-12 schooling in the private sector,
a number of studies have sought to identify a country’s characteristics which are associated with progress and
economic goals by the institutions and regulation governing higher education. About 75 percent of high school
graduates today go on to college, a far higher proportion than two decades ago. About 28 percent of college
students are minorities. Women outnumber men on many campuses. These studies repeatedly stress the
importance of ensuring a sufficient and stable source of funding for developing basic research and higher
education sector. Hence it is clear that regulation, size of funding to this sector, both public and private
(including individual students, households and organised groups) is one of the key determinants of India’s
ability to generate wealth (GDP).
However, the level of this investment across sectors is often difficult to identify and compare. The issue of
private sector contributions raises important questions concerning the equity of education systems. Heavy
reliance on private contributions is often an indication that some students may be denied access to higher
education or specific educational services because their families are unable to pay for them. Policies that
balance the cost of providing quality education with available resources is essential for inclusive growth and
development in India on a scale which is very large.
This objective of this paper is to discuss some of the issues and approaches to address some of the key issues
relating to the private sector participation in the higher education sector in India for inclusive development.
Approach
This concept note has been prepared after conducting extensive secondary research. In addition, we meet and
discussed with several sector experts, PE fund managers who have invested in the education sector, deans from
higher education institutions, industry associations, etc. All the points of view have been analysed and
synthesized to prepare this note.
Private Sector Participation in Higher Education
The table below provides a snapshot of the scope of private sector participation in higher education, the
regulation governing them, nature of fees control and the potential size of the opportunity in India. It is fairly
evident that the private sector participation in higher education sector is in the vocational type professional
education, training and tutoring and in providing services where there is high industry demand for students
leading to maximizing the profit motive behind these ventures. It is also anticipated that the confluence of
technological, economic, and demographic forces that would in a very short time force the return of ever-larger
numbers of working adults back to formal higher education in India for business studies (MBA) or Post
graduate (Masters) or Doctorial Programmes. Hence it is estimated that the size of the higher education sector
in India to be in the range of USD 25 to 30 billion dollars in the next 2-5 years. Private sector players (see
Appendix 1) see such a huge opportunity to monetize where government and the formal education sector have
failed to deliver, although a large number of universities under the University Grants Commissions (UGC) have
been given a license to operate in India. This trend raises larger issues regarding the India’s modernization and
growth agenda in higher education which is non inclusive.

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Segment Profit Making
Allowed
Regulatory Body Fees Control Size (USD Mn.)
Higher Education Test
Preparation
Yes Na No 1,664
Private Professional Colleges Yes Yes Partly regulated 7,054
IT-training-Retail Yes Na No 187
IT-Training-Corporate Yes Na No 38
E-Learning Corporate Yes Na No 14
E-Learning Retail Yes Na No 13
Tutoring Yes Na No 5,351
Services training Yes Na No 1,365
Teacher training Yes Na No 15
IT/BPO finishing school Yes Na No 27
Educational books Yes Yes No 2,965
Educational stationery Yes Na No 1,326
Academic Research Centers No Yes Yes 6,000
Source: Estimates from Industry, Industry bodies, PE assessments and Discussion with professionals in the education industry
Skill Gaps and Unemployability of Students passing out of Higher Education
As a larger proportion of students that are graduating out from mediocre higher education institutions, there is
an increasing trend of skill gap as student Unemployability is a bigger crisis than unemployment. Some of the
estimates include:
• 53% of employed youth suffer some degree of skill deprivation while only 8% of youth are unemployed
• 57% of India's youth suffer some degree of Unemployability
• The 82.5 million unemployable youth fall in three skill repair buckets:
1. Last mile repair (< 0.5 yrs) 5.3 million
2. Interventional repair (0.5-1 yr) 21.9 million
3. Structural repair (1-2 yrs) 55.4 million
• Repairing this skill deficit needs Rs 490,000 crore over two years. Current budgets cover 25% of this but
only allocating more money won't solve the problem
Some of the issues to be addressed is the expansion of research in the Universities. As there are completely
disjoint set of applicants for colleges in Tier 1, Tier 2 and Tier 3. This dualism is also leading to non-inclusive

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development in the current workforce that is coming out from the higher education and vocational
training/finishing schools to meet the industry demand.
Lack of sectorial vocational training strategies and policies
We have no clear focus on sectors where there are gaps in the supply side. Lack of proper sectorial vocational
and human resources development strategies and policies, would lead to emerging crisis in the some of the
developmental and support sectors of the Indian economy. For example in the health sciences sector, India’s
share of the global disease burden is around 20% for its share of the global population, however, the supply of
trained clinical labour pool is less than half of the disease and healthcare burden in the economy. In some of the
occupational groups such as lab technicians, India has only one percent of the globally trained supply of human
resources!
The table below outlines the clear gaps:
Source: WHO Statistical Information Systems 2008, Disease burden is from WHO 2002 DALY estimates, World Bank
While similar gaps can be provided for other sectors, such gaps in the investment in specific sectors such as
health sciences sector vocational and human resources development would lead to supply side constraints and
an imminent health crisis and further impact India’s ability to generate wealth (GDP).
Agenda for Higher Education Sector for Inclusive Development
Indian higher education sector has to address two key issues in the short and the long term. The first issue is
for correcting the skills gaps of the current batches of students who are passing out to make them ready for
industry. The second issue is creating adequate capacity in the higher education sector that is relevant for the
industry and economic development.
Action Plan to Cover the Current Skill Gap and Employability
There has been an industry demand to help make changes and enable policies that can cover the skill gap and
employability of the current batches of graduates and post-graduates passing out of our colleges and
universities. These include:
Set up Public-Private Partnerships
There is some potential Public Private Partnership Models that may be explored. Internationally, PPP models
have been used to address skill gaps, infrastructure needs and education provision. While evidence does support
8%
8%
9%
1%
20%
18%
Doctors
Nurses
Healthworkers
Lab Techs
Disease Burden
Population
India's Share in the World

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that school PPP program do impact employability and educational outcomes favorably, the experience is
relatively new and recent. PPP Models for further consideration with a view to addressing the industry needs
from graduates and post graduates. The model is where private and corporate sector players are allowed to set
up specific institutes within the college or university to train and or coach the students for a particular vocation,
so that they are job ready when they pass out.
Setting up of a Education Foundation to aggregate corporate funding
Keeping in line with the numerous CSR initiatives that have been initiated by Corporate houses in the education
sector, we recommend that an Education Foundation is be set up for channeling the entire corporate sector CSR
funding into objectives that complement and support government initiatives rather than in a limited and smaller
universe.
A Foundation could be set up by the local authorities and private sector, which is managed privately in terms of
prioritizing the spending from the Fund across different initiatives in the higher education sector. The foundation
can be set up to focus on assisting weaker sections of the society, unemployable graduates and post graduates
and less privileged classes in supporting them to retain in higher education colleges. The Foundation will
provide a sustainable model to support the government initiatives and programs at a wider level. It is also
important that due credit is given to all members of the Foundation as often as possible. Some of initiatives that
the Fund can promote include:
• Providing financial assistance to meritorious students or supporting a mentoring program for meritorious
students over the years
• Providing colleges and universities one-off financial assistance on developing supporting infrastructure and
industry outreach programs
• Developing and implementing ICT driven infrastructure across the network
• Supporting dialogues, college-industry secondments and exchange
• Developing a volunteer network to assist in teacher training, mentoring or management skills to harness the
skills from the corporate sector
• Specific teacher training program in languages, presentation techniques and teaching aids
Government, Private, Academicians collaborate on syllabus and curriculums – pragmatic and practical
IT and BPO sector has been actively participating with engineering colleges on updating and implementing
relevant topics to make the course meaningful to the student and the industry. This practice needs to be further
broad-based to cover the full gamut of higher education in India.
Get Industry to speak in Academic Sessions
While the forward looking colleges and institutions in India have started this practice, it still needs to be
accepted by the higher education sector as a whole. This faculty, student and industry interaction provides better
understanding and appreciation of the industry requirements.
Industry Advisory Board Members to Drive Result Oriented Programs
While some of the leading management institutes in India have constituted Advisory boards representing leading
members from industry and corporate sector, this needs to be broad-based and rolled out across the higher
education sector. Moreover, this should also be part of the accreditation process of the instructions as governed
by AICTE.

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Time based execution and ongoing measurement
A dashboard approach for measuring the impact of the measures taken and their result orientation to the
industry needs to be jointly implemented by the government and industry bodies. This would ensure immediate
measures for validating the industry demands and alignment with the academic institutions as suppliers.
Professors to do internship stints at companies
Policy for encouraging teachers to take sabbaticals into industry to get acquainted with the industry orientation
and their future requirements for talent is well exposed. This should also ensure that secondments and career
placements are opportunities are created for teachers to gain international experience over short to medium
term.
Vocational School concept to be introduced in higher education schools
Investment and fiscal benefits should be provided for private sector participation in creating infrastructure for
creating vocational schools in their campus. The students can then be directly absorbed into the employment by
the private sector sponsors.
Growth Models in Higher Education in India
Over the past half century, more than a dozen countries around the world have employed varying strategies to
move from elite systems of higher education to mass or universal ones, enrolling at least half of the traditional
college population. Examining the strategies employed would help in assessing how these and other countries in
the future may keep up with an increasing demand derived from the increasing economic returns through
additional higher education and training. A review of the strategies employed suggests four models of growth
would be key learning on the model that India would need to adopt.
Model One: Expansion of a public sector charging little or no tuition fees.
This is perhaps the most prevalent growth model for higher education over the past half century. Countries
make a financial commitment of public funds sufficient to expand their public sectors of tertiary education
without requiring large or even significant cost sharing in the form of higher fees from students and families. In
this approach, tuition fees represent 10 percent or less of the resources used to pay for instructional and
operational expenses (excluding research and other activities).
In the 1950s and 1960s, the United States employed such a strategy to make a transition to a mass education
system beyond the secondary level. This model included the development of a community college system as well
as the creation and expansion of higher education public institutions. In the past quarter century, this strategy
has been used by several Scandinavian countries including Norway, Sweden, and Finland.
The critical component for successful implementation of this strategy is a country's willingness and ability to
devote substantial levels of public resources (probably in excess of 1.5 percent of GDP) to allow for expansion
without significant cost sharing. In reality, most countries, including India are not in a position to make such a
commitment of public funding. Hence this growth strategy would not be relevant in the current context with
respect to India.
Model Two: Publicly financed fees repaid through the tax system once students graduate
Australia established a new model for growth in the late 1980s when it introduced its Higher Education
Contribution Scheme (HECS). This strategy recognized two realities. One was the financial reality that private
resources were needed to supplement public resources to fuel the growth of higher education. The other was the
political reality that many students and their families were unwilling to pay traditional fees. To deal with these

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realities, Australia developed an approach in which the government would initially finance fees, with most of
these students repaying the fees once they graduated as a percentage of their income through the tax system.
England and Thailand introduced a similar system of publicly financed fees beginning in the academic year
2006.
A key question with regard to publicly financed fees, like the model of public-sector expansion, is whether a
country has enough resources to fund it. Under this approach, governments essentially are funding both sides of
the tertiary financing equation, operational support of institutions and the payment of fees by students and
families, until the stream of loan repayments is sufficient to provide significant private resources. Even a
country as wealthy as Australia has found that it needed to reduce HECS subsidies by lowering the incomes that
qualify for nonrepayment and raising the HECS fees to make the system sustainable. In addition, many
Australian institutional officials would claim that public support of higher education has been reduced to make
ends meet. This strategy can be explored in India as part of the growth strategy for higher education in the
private sector.
Model Three: Increased cost sharing combined with higher levels of student aid
This model of growth is one in which more significant cost recovery through higher fees is introduced at a wide
range of public institutions. This plan is usually combined with greater reliance on student aid to ensure that
economically disadvantaged students are not discouraged from attending when higher fees are charged. Over the
past quarter century, the United States, New Zealand, and Canada are examples of countries that successfully
pursued this approach to expand resources to meet rapidly growing demand.
Raising fees for all public-sector students is typically thought of as the basic policy response for greater cost
sharing. In reality, countries raise fees in a number of different ways to increase the degree of cost sharing.
Many Eastern European countries established a system of parallel fees in which students who do not qualify for
the "free seats" based on grades and merit can enroll in the same courses of study by paying tuition fees that
are set at or near the full cost of education. This plan is not recommended as it introduces or reinforces system
inequities.
However, other ways of raising fees selectively make a great deal of sense for spurring growth and introducing
greater equity. These methods include dual fee systems in which students in state-funded fields pay low,
subsidized fees, while students in high-demand fields such as business or law pay higher "market-based" fees
equal or close to full costs. Australia is a prime example of a country that has moved to a dual fee structure in
which HECS students pay (or repay) government-set fees, whereas all foreign students and a growing number of
domestic students pay at much higher levels. Differential fees by level of study are another common strategy for
increased cost sharing. Groups of students pay different levels of fees: lower fees for domestic undergraduates
and higher fees for graduate students, international students, and in some instances adult learners. This model
has been operational in India as part of the capitation fees charged under the quota seats.
Model Four: Expansion of a private sector of institutions
This model of growth expands enrollments in private institutions to take up the slack created from restrictions
in the size and growth of the public sector of tertiary education. This has occurred in a number of countries
around the world either as a matter of deliberate government strategies or simply as an industry developing in
response to unmet demand. In the Middle East and some countries in Asia, the number of private-sector
institutions and students has grown particularly in vocational programs, although private universities have been
the primary source of growth in some countries such as Japan and Korea. Poland is an example of an Eastern
European country that has become a mass higher education system largely through the growth of a private
sector.

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In some countries, the private institutions are for-profit while in others their organization is typically not-for-
profit, with surpluses reinvested in the institution. What is common is that most enrollment growth occurs in the
private sector while the number of students enrolling in public-sector institutions remains stable or grows very
slowly as additional public funds are not made available. One way to encourage more enrollments in the private
sector is to make students enrolling in these institutions eligible for the full range of student grants and loans.
Another way to encourage private-sector growth is for governments to facilitate the approval of programs that
meet minimal quality standards.
The four models of growth described above demonstrate that there are different routes for countries to achieve
the goal of mass or universal tertiary education.
Government Focus and Intent for Higher Education
Higher education is not, however, without its share of controversy, the courts giving often conflicting judgments:
• In Unni Krishnan, J P vs. the State of Andhra Pradesh (1993), the Supreme Court banned the Capitation Fee
Act, 1988. Instead, it allowed a number of “paid seats” to be established in consultation with concerned
state governments. The idea was to make some families pay full costs toward the education not only of
their own wards but also of some others, in the name of social justice. The state governments were also
allowed to administer and regulate admissions into unaided and privately promoted institutions providing
professional education.
• In TMA Pai vs. State of Karnataka (October 2002), the Supreme Court reversed its position curtailing the
independence of private educational institutions and permitted financially independent private and minority
interests to establish higher education colleges of their choice. Although the court also warned against
“commercialization” by private colleges, it was not clear what the practical impact of that warning might be.
• In its most recent related judgment of 14 August 2003, the Supreme Court again took a tough stand against
capitation fees and profiteering by the private professional colleges. It threatened to “de-recognize” private
colleges found guilty of charging capitation fees in any form. Again, the impact remains unclear - there are
reports of illegal payments to obtain placement in private professional colleges and of political involvement
in setting up such colleges. The role of politicians in setting up educational institutions has been questioned
in the media as the cause for “vested interests” and opacity of regulations in the sector.
As education is a joint responsibility of the Central and State governments, some states have passed separate
legislations on private higher education. Chhattisgarh passed a Private Universities Act in October 2002, and
Uttaranchal accepted four private universities in 2002–03. There has been a proliferation of private medical and
engineering colleges in the southern and western states of Andhra Pradesh, Tamil Nadu, Karnataka, Kerala, and
Maharashtra.
In 2001, Andhra Pradesh had 95 private self-financing engineering colleges and 303 medical colleges, compared
with 11 public engineering colleges and 25 public medical colleges. In many states, there have been allegations
that private universities lack adequate infrastructure and appropriate faculty, and some established colleges
have raised fees sharply in conjunction with professional courses or foreign collaborations. Subsequent judicial
intervention has failed to clarify matters.
Entry of foreign educational institutions to India is covered by the Foreign Educational Institutions (Regulation of
Entry and Operation, Maintenance of Quality and Prevention of Commercialization) Bill of 2007, which has
stalled in parliament due to political opposition. Key proposals in the bill include:

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• Foreign institutions are granted university status.
• Eligibility for exemption from “national treatment” on enrolments, admissions and fees.
• Restriction of surplus revenue usage within India.
• Investment of at least 51% of total capital required for establishing an institution in India.
Some 100,000 of India’s students leave each year to study abroad, at a cumulative cost of US$4bn. China has
seen a surge in foreign educational institutions partnering with local institutions; its policies and objectives very
much in line with India’s views that foreign universities should not eye India as a market, but should invest
adequately to set up their own campuses.
Pro-Student Approach to Funding Higher Education in India
India needs to create a system that would improve access, competitiveness, quality and effectiveness of higher
education system. Should tax payers subsidy be justified in efficiency growth, but there are also as we know
very significant private beneficiaries of individual perseverance of higher education and therefore it is right that
they should pay.
There should be a well designed students loans with core characteristics. There are three main characteristics.
• The Income contingent repayments which are calculated in terms of percentage of graduates subsequent
earnings, because it increases efficiency to repay and reduces uncertainty. It can be justified in terms of
equity, and promote access since it has built-in insurance against inability to pay. Hence it’s a genuine loan
with least interest;
• The loans provided should ideally be large enough to cover the entire tuition fee and if possible living costs
as well; and
• There is an issue of how much interest rate to be charged – it shouldn’t be Zero interest rate, it shouldn’t
be the normal interest rate which the banks normally charge, but it should be something like government’s
cost of long term borrowing range.
Lessons learnt from developed countries
• Fees relax the supply side constraints- it brings in more money to increase quantity and improve quality. On
the other hand when you bring in more money you should not bring in without any restriction which was
done in New Zealand. We need to control the way the fees are introduced. On the other hand the failure to
liberalize is also a mistake because it harms quality, access and continues regressively.
• Student’s support - Lessons about Loans. Its true that income contingent loans works and they do not harm
access for example – e.g.( Australia, NZ, UK, Hungary). However, we should not provide any interest
subsidies as they are expensive and fiscally not prudent as we have learnt from the mistakes made by
Australia, NZ and UK.
Strategic Approach for India
Government should enable a variable fee structure where the fees vary across the universities. The variable fess
structure has double benefit. This brings in more money for the university, and they also increase the strength,
competition, and also improve the effectiveness of university in terms of quality. Paradoxically variable fees are
fairer than the so called highly subsidized / free higher education. The problem with highly subsidizing higher
education is that the tax of the poor people is paid for the middle class students to go up and become rich. A
good loan scheme is implemented so that higher education becomes almost free to the students - (because it is
the graduate students who make repayments). As has been voiced by various industry and reformists, an active
measurement to promote access is put into place. Access cannot be promoted by simply subsidizing higher

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education. Access fails much earlier when students fail to complete secondary education. If access is a concern
then we have to take into account seriously and do things much earlier by improving quality of school education
and providing access by adopting many other means at the higher education stage
Key Policy Measures for Reforms in Higher Education Sector for Inclusive Development
Sectorial Planning for Vocational Development
A sector specific plan with clear industry partnership and participation into vocation development should be
outlined. This could be on the lines of how IT industry has created for creating the talent pipeline by inducting
students after K12. Learnings from the German vocational system can be leveraged to adapt this to Indian
industry’s requirements.
Covering the Current Skill Gap and Employability
Various items proposed in the action plan in the previous section needs to be actioned out to ensure that
repairing this skill deficit that requires substantial funding over two years is well supported by industry
participation. This will ensure that private sector participation to cover for the balance needed over the
government’s budget.
Policy on the Growth Models for Higher Education in India
Various successful growth models for higher education in the world exist. A clear policy on the growth model
that is inclusive needs to be articulated in the Indian context.
Information Communication and Technology (ICT) Models in Higher Education
The next generation ICT models in higher education which is created by industry participants for mass
mobilization of talent needs to be encouraged. Lessons and experiences from the IT services sector in India
need to be replicated into other sectors.
Tax Holidays and Taxation Rates for Private Sector Higher Education Sector Investors
There is no issue for private sector participation through philanthropy. However, taxation policy needs to be
articulated in other cases where generation of surpluses with profiteering as a motive to ensure entry barriers
for private sector operators with a short-term profit orientation. Similarly higher and regressive tax regime for
the first seven years needs to be introduced to check profiteering in education sector. After that, a model for
differential tax structure can be introduced for withdrawal of profits.
Model for Higher Education Tuition Fees Differential Structure
Formula for differential fees structure to ensure that there is a justifiable basis for charging of
fees/capitation/premium, etc. The determinants for differential fees could be as under:

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Direction on social infrastructure through Corporate Education Foundation
Clear policy on corporate social responsibility and social infrastructure funding by education foundations needs
to be devised for an inclusive development of sectors that are not viable for investment by the private sector
having a profit motive. This Education Foundation is be set up for channeling the entire corporate sector CSR
funding into objectives that complement and support government initiatives rather than in a limited and smaller
universe.
Creation of National Bank for Higher Education Financing
An apex banking institution or independent division in an existing bank under the guidance and regulation of
Reserve Bank of India needs to be established that would provide specific products and services guidance and
refinancing to bank for education sector loans. These loans should be treated a priority sector leading by the
banks.
Average
Student
Training
Costs
Advantage
of Institute
Location
(Zoning)
• GDP Per location
• Location
Institute Level
• Reputation
• Student Training
• Science Research
• Other Factors
• National Rating
University
Recognition
Determinants of
Profitability and
Tax Holidays/
Subsidies

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Appendix 1: List of For Profit Private Sector Institutions Operating in Higher Education
in India
• 100percentile.com
• Aakash Institute
• Academy of Creative Teaching
• Air Hostess Academy
• Algorithms India
• Aloha
• Amity
• Apple Kids
• Aptech
• Avalon
• Aviva Educare
• Bansal Classes
• Brilliant Tutorials
• Camlin
• Career Forum
• Career Launcher
• Career Point
• Chanakya IAS Academy
• Chate Group
• Classteacher.com
• CMS Computers
• Core Projects
• Dilip Oak's Academy
• Edstar
• Educomp
• English Centre
• EuroKids
• Everonn
• Excel Soft Technologies
• Extramarks.com
• FIITJEE
• Frankfinn
• G.M.Pens International Pvt Ltd
• Growing Stars
• Hindustan Pencils
• IBS
• ICA
• iDiscoveri
• IL&FS Education & Technology Services
• IMFS Global Consultants
• IMS
• Indian Institute of Planning & Management
• Institute of Technology & Management

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Confidential
• International Academy for Creative Teaching
• iPerform
• Jamboree
• JetKing Infotrain
• KalraShukla Classes
• Kangaroo Kids
• KidZee
• Kingfisher Training Academy
• Koenig
• Komark
• Labour India Publications
• Macmillan India
• Madhavi Desai Consulting
• Mahesh Tutorials
• Mbdalchemy.com
• Navneet Publications
• NIIT
• Professional Tutorials
• Rau's Study Circle
• Rotomac Pens Pvt Ltd
• S Chand
• Shemrock Agency
• Sinhal Classes
• SIP Academy
• Smart Brain
• SQL Star
• Sriram IAS
• Studyloft.com
• Studyplaces.com
• SukhSagor Institute
• Sundaram Multi Pap
• Technology School
• The Teacher Foundation
• TIME
• Tutorvista
• UC Mas
• Vajiram & Ravi
• Veta
• Vidyasagar Classes

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Bibliography
• GLOBAL EDUCATION DIGEST 2007: Comparing Education Statistics Across the World - UNESCO Institute of
Statistics (UIS)
• Working Paper from the Centre for Socio-economic & Environmental Studies
• Higher Education Tuition Standard Model Analysis
• Dataquest Reports
• Department of Education
• Media Reports
• NGO Studies
• World Bank Studies and Reports
• Discussion with professionals in the education industry
• AICTE
• Medical Council of India
• National Knowledge Commission
• NASSCOM, CII, FICCI Reports
• German Vocational Education Experts Presentation
• UK Prime Minister’s Top Management Program Team interactions
• Chambers of Commerce Representations and Presentations
• Equity Research Reports
• Supreme Court judgment information system, www.prsindia.org
• Dental Council of India,
• Rajya Sabha parliamentary questions
• Bloomberg Reports
• Ministry of Finance Reports
• Directorate General of Employment & Training Reports
• Journal of International Higher Education