World Bank chief economist Kaushik Basu has written an entertaining and informative book, based on the economic issues he dealt with when he was chief economic adviser (CEA) to the previous Union government (UPA II). The book combines analysis with stories that make it a good read. In his final chapter, however, he turns to some broader thoughts on India’s economic future. This chapter is titled “The Road Ahead,” and the section that interested me the most has the enticing heading of “Striking Gold with Higher Education.” Basu argues that Indian higher education can take off without any long-run fiscal burden or macro-policy shift, but simply through “virtually costless reforms to the regulatory system.” The outcome he envisions is that India can be a global hub for higher education.
Basu points out that India has a long-standing tradition of excellence in higher education (at least, compared to other developing countries), and that English is widely used in the education sector. These represent important natural advantages. Basu’s interest in the topic also comes from his stint as CEA, when he served on the grandly-named Committee to Advise on Renovation and Rejuvenation of Higher Education, more commonly known as the Yashpal Committee. He expressed disappointment with the committee’s process and final report, and indeed, he appended a dissenting note to that report. He is very clear in stating where he sees one of the main causes of India’s losing its initial advantages in the sector: “The tendency to have higher education services largely by the state [that is, the government] and to have it controlled centrally, such as by the University Grants Commission (UGC) and also the All-India Council of Technical Education (AICTE), has had a deleterious effect on this sector.”
The first recommendation made by Basu consists of drastically reorganising the UGC to make it a modern regulatory body that focuses on providing objective information on the quality of higher education institutions. The second is to concentrate public resources on flagship institutions, and to make these globally competitive in terms of pecuniary and non-pecuniary rewards for top faculty members. The third is to ease entry of the private sector, and also ease collaborations with foreign universities.
Interestingly, Basu makes a compelling argument that, if the reforms he proposes are well-designed, India can attract students from rich countries, not just other developing countries. Universities in England and the United States have become quite expensive, and he suggests that India can compete primarily on price, while offering reasonable quality. He notes challenges such as the need to modify visa rules to be able to handle an influx of foreign students, but argues that attention to these details can lead to significant success and the creation of a vibrant knowledge sector in India.
I think Kaushik Basu’s suggestions are excellent. India’s higher education sector is in desperate need of reform, and it is failing the country’s current needs on many fronts. I would like to offer some additional perspectives. The idea of attracting students from rich countries is a beguiling one. It is reminiscent of medical tourism, and even of export-led growth strategies, since having rich foreigners buy services in India has the same impact on the country’s balance of payments as exporting goods. But it may be that the biggest benefit from Basu’s suggestions will be for India’s own students. Already, the shortage of even moderate quality higher education in India is leading to students going abroad to study in second- and third-tier universities. It would be wonderful if those students could be given better options at home.
Furthermore, the demographics do not favour attracting students from North America and Europe. Already, US universities, including public institutions, are trying to balance their budgets by enrolling more foreign students, as the number of young people going to college flattens out. Chinese student numbers in America are swelling as a result. India’s demographics, on the other hand, favour a massive expansion of higher education just to meet domestic demand.
Perhaps an even bigger barrier is the non-monetary cost. India is not a particularly hospitable place for young women from abroad—a function of the country’s internal problems with treating women equally in society at large. While elderly medical tourists can be easily served, it will be much harder for India to absorb large numbers of young Westerners used to more liberal societies, unless they are insulated from the country around them. To avoid this, they could be recruited from more conservative areas, but then they are much less likely to consider several years studying abroad, away from their peers. Finally, the reputations required for Indian universities to attract Western students in significant numbers will take a long time to build.
There is still room for foreign collaborations, and an expansion of programmes that involve spending a semester or two abroad, but the vision of India as a global higher education hub seems to be some distance in the future. Meanwhile, however, Kaushik Basu’s proposals for reforming higher education can provide enormous benefits to India’s own young people who need that education, and, by keeping students home who might otherwise study abroad, have similar balance of payments effects.
The author is professor of economics
University of California, Santa Cruz