Making the Indian higher education system future readyFICCI Higher Education Summit 2009

Contents

Foreword 3

Executive summary 4

Introduction 5

Financial innovation 21

Innovative use of ICT 37

Reinvigorating research 50

Thrust to vocational education and training 64

Regulatory reforms 81

Acknowledgements 95

About FICCI 96

Foreword

Dear Readers,

At any given time, higher education has been a key factor for its ability to change and to induce change and progress in the society. Not surprising that in todays globalised economy, it is the globalisation of knowledge that will enable us to deal with the present and future challenges that is confronting us in every sphere of life, whether it is in environment, health or food security.

Today India and China, are in advantageous position with the young demographic profile in the graying global world as they wouldbe providing the bulk of skilled and semi-skilled workforce to the world in near future. Its an opportunity that China has been preparing to leverage since the early 90s. However, in India, higher education is confronted with formidable challenges and must proceed to the most radical change and renewal it has ever been required to undertake, so that we can transcend not just the mere economic considerations but also incorporate deeper sociocultural dimensions that will enable us to create an environmentally sustainable world.

It is heartening to see that higher education reforms are high on the agenda of the new government with emphasis on expansion, inclusion, and excellence as the pillars of higher education. Taking its cue from the government agenda, FICCI-E&Y Study has aimed at identifying the current scenario and practices in the universities and higher education institutions through a primary survey, infer key issues and challenges, reflect on the best practices, and suggest an action plan for Make Indian Higher Education Future Ready. The Study identifies and reinforces that innovative financing, liberalization of regulation and quality assurance mechanisms, use of ICT, integrating research and teaching, and streamlining vocational education and training as the key change agents.

We are grateful to Ministry of Human Resource Development, Government of India for its support, USA as the partner country, and Sponsors/Partners in organizing the FICCI Higher Education Summit 2009 titled Imperatives for Higher Education: Inclusion, Expansion & Excellence on 6th & 7th November 2009 in FICCI, New Delhi.

I wish the participants good luck in their future endeavors.

Warm Regards,

Amit Mitra

Secretary General

FICCI

1

Foreword

Dear Readers,

Since independence, higher education has always been identified as a critical piece in scripting Indias growth story. When Jawaharlal Nehru established the Indian Institutes of Technology, he understood the need for educated and skilled human resources only too well. This ongoing emphasis has resulted in India having one of the largest higher education systems in the world, consisting of over 20,000 institutes enrolling more than 120 million students.

Growth in numbers, however, has not been accompanied by an improvement in the delivery of higher education and consequent outcomes. The Indian Higher Education system continues to be bogged down by the challenges of inadequate access, poor quality and inequity. The Gross Enrollment Ratio (GER) in India has grown slowly and is estimated to be at a dismal 12%, with wide disparity across regions of the country, rendering universal higher education a distant dream. In terms of equity, the Indian Higher Education system is characterised by a large rural-urban and gender divide. GER in rural India is estimated to be about 7%, while urban areas have a GER of about 23%. Severe shortage of faculty and poor infrastructure have severely impacted results, with less than a handful of Indian HEIs achieving global recognition.

The need of the hour is to upgrade the Indian Higher Education system to train the increasing proportion of young population so India can truly realise the prophesized Demographic Dividend. We have identified five imperatives for making the Indian Higher Education system future ready - Financial Innovation, Innovative Use of Information and Communication Technologies (ICT), Reinvigorating Research, Thrust on Vocational Education & Training (VET), and Regulatory Reforms.

We envision the Indian Higher Education system of the future to be one where a large number of public and private high quality institutions co-exist and flourish in a supportive and transparent regulatory environment. Going forward, we envision Indian higher education institutes use financial innovation and ICT to rapidly enhance scale, improve infrastructure and focus in research.Simultaneously, a healthy vocational education system is built up, which works in alignment with the higher education system, building the overall skill levels of the population and increasing productivity.

The current Government has set the ball rolling and we believe that by focusing on the imperatives mentioned above, our vision can become a reality, maximising the potential of Indias biggest natural resource driving the economy to unprecedented heights.

Warm Regards,

Amitabh JhinganPartnerEducation sector leaderErnst & Young

2

Executive summary

The Indian higher education system has witnessed significant expansion in recent years, both in terms of the number of institutions as well as the student enrollment. India has more than 400 universities and over 20,000 colleges, of which almost half were set up in the last decade. Student enrollment has crossed 129 million in 2007-08, clocking a compounded annual growth rate of 6.2% since 1985-86. The private sector has enthusiastically participated in the growth of the higher education system with about 63% of the total higher education institutions being private unaided institutions.

Though these trends communicate a positive picture, the Indian higher education system ails from significant structural shortcomings and faces huge challenges in meeting future expectations. Despite having more higher education institutions than any other country in the world, hardly any feature in the leading institutions in the world. At about 12%, our GER is almost half of that of China, and lower than many developing countries. Inequity is also pervasive in the system, with the GERs of women and backward castes being much lowerthan the national average. From where it stands today, we have identified five areas critical to making the Indian Higher Education system future ready. We believe that financial innovation, innovative use of information and communication technologies (ICT), reinvigorating research, thrust on vocational education & training (VET), and regulatory reforms are potential Game changers for the Indian higher education system.

Given this backdrop, we have identified certain challenges across these five areas and outlined specific recommendations to improve upon the gaps and strengthen the foundation of the Indian higher education system.

Game changers Key challenges Key recommendations

Financial Innovation Very low per-capita spends on higher education, leading to significant paucity of funds for expansion and quality enhancement

Inadequate exploration of alternate revenue streams by HEIs

Poor coverage of scholarships and student loan schemes to support needy students and enable tuition fee rationalisation

Encourage private sector investment in education through the development of innovative PPP models

Introduce performance based funding by the Government

Rationalise tuition fees structures and support the same with the creation of a strong education financing mechanism

Build an enabling environment to generate alternate sources of revenue by HEIs

Innovative use of Information and Communication Technology

Lack of ICT infrastructure in HEIs and low technology/people readiness

Poor quality of digital content, especially in regional languages

Improve ICT infrastructure in HEIs through PPP models and incentivise adoption of ICT in pedagogy

Develop mechanisms for development and free distribution of high quality content across languages

Improve connectivity across HEIs and create a national repository of digital content

Reinvigorating Research

Poor standard of research across Indian higher education institutes

Lack of qualified faculty, limited funding for research as well as poor linkages between academic institutions and industry/Government R&D labs

Incentivise research in universities, while creating an enabling environment in terms of lesser teaching hours for researchers, greater budgets and access to better infrastructure

Increase the number and quality of doctoral students institutions and industry/Government R&D labs Increase the number and quality of doctoral students through the launch of innovative programs, provision of attractive fellowships and enhanced industry collaboration

Thrust on Vocational Education and Training

Low penetration of VET due to limited relevance and poor outcomes

Multiple regulatory bodies and lack of linkage of VET with the mainstream education system

Improve oversight structure for VET, facilitating greater industry involvement and providing greater alignment with market needs

Facilitate mobility between VET and mainstream education through a system of credit transfer

Support private sector vocational education through accreditation and recognition mechanisms

Regulatory Framework Multiplicity of regulators with overlapping roles

Uneven entry barriers leading to a skewed development of the system

Limited transparency, low autonomy and poor quality control systems

Create a single independent agency for regulating higher education and simplify the regulatory framework

Reduce entry barriers for reputed players, by facilitating entry of high-quality foreign universities and private universities through the PPP mode

Improve transparency and disclosure in the system

3

Current state

Key challenges

Potential

Proposed thrust areas

1. Introduction

4

Tertiary education in India is characterized by a well established higher education system and an evolving vocational education & training segment

Elementary education Secondary education Tertiary education

Primary Class I V

Upper Primary Class VI VIII Secondary Class IX X

Senior Secondary Class XI XII

Science Commerce Arts

Engineering Medicine Architecture

ITI/ITC/Polytechnic courses

IT/Computer training

Higher education institutions include universities and

colleges that provide undergraduate (UG), postgraduate

(PG), and doctoral degree programs. Some institutes

provide diplomas as well

Most UG courses take three years except for certain

professional courses such as Engineering, Medicine, etc.

PG courses are generally of two years duration

Vocational education institutes include institutes/

polytechnics that primarily provides certificate and diploma

courses, the duration of which vary between three months

to three years

While Industrial Training Institutes (ITIs)/ Industrial Training

Centres (ITCs) providing courses with relevance to specific

trades (such as turning, fitting, wiring, etc) have been in

existence for a long time, many private institutes have

emerged to meet the demand from upcoming industries

Travel and Tourism Aviation Hospitality Retail

Higher education Vocational education & training

General Professional Traditional New and emerging

Major Fields of Study

Sources: EY-EDGE 2008: Globalizing Higher Education in India

emerged to meet the demand from upcoming industries

such as aviation, retail, hospitality, etc.

5

India has the largest number of higher education institutions in the world

India is third largest in the world in terms of student enrollment

25.3517.76

12.859.37

4.57

China USA India Russia Brazil

Student enrollment in higher education (2007) (million)

21,123

6,7064,000

India United States China

Number of higher education institutions

~~

~

The Indian higher education system has emerged as one of the largest in the world, in terms of number of institutions as well as student enrolment

There has been a significant growth in the number of universities in the last decade

State universities dominate the landscape, accounting for more than half of the total universities

Year-wise number of universities in India

8.55%

28.07%

1.10%

55.04%

7.24%

Central Universities

State Universities

Deemed to be universities

Institutions of national importance (State Legislation)

Institutions of national importance (Central legislation)

India has more than 20,000 colleges, with almost 10,000 colleges being set up in the current decade

General course (Arts, Science and Commerce) colleges form a majority of the colleges in India*

65.08%8.72%

11.64%

14.57%

Ar ts, Science & Commerce

Engineer ing, Technical & Architechture

Medical colleges

Others

Year-wise number of colleges in India

Sources: EY- EDGE 2009: Private enterprise in Indian higher education; UGC: Annual Report 2005-06; MHRD: Annual Report 2007-08; UNESCO: Global Education Digest 2009; U.S. Department of Education: Postsecondary Institutions in the United States Fall 2007; American Council on Education: Higher

6

There has been a steady increase in enrolment in the higher education system over the past two decades

Student enrolment in higher education has grown significantly over the last few years, with engineering being the clear preference among professional courses

46%

18%

7%

3%3%

20%

1%2%

Arts

Science

Commerce/Management

Engineering/ Technology

Medicine

Law

Agriculture

Others

While general courses (Arts, science, and commerce) account for majority (~80%) of student enrolment

Enrolment in higher education per year (in million)

Number of students by field of study* Percentage of students in professional courses

Engineering has increasingly strengthened its position as the most highly preferred professional course

Degree granting courses have seen greater enrolment vis--vis diploma & certificate courses

The relative enrolment of students in post graduate programs has declined as compared to enrolment in UG courses

Sources: EY- EDGE 2009: Private enterprise in Indian higher education; UGC: Annual Report 2005-06; EY-EDGE 2008: Globalizing Higher Education in India *2005-06

7

The share of unaided private higher education institutions in the country has grown significantly in the last few years

The percentage of students in unaided private higher education institutions has also increased considerably

42.60%

63.21%

2001 2006

32.89%

51.53%

The private sector has played a key role in the growth of the higher education system, especially in professional higher education

There has been a rapid growth in the number of professional private higher education institutions

Number of professional unaided private higher education institutions

204

669 682780

174

736

1,617

1,150999

233

Pharmacy Engineering Management Computer Applications

Medicine (MBBS)

1999-00 2006-07

2001 2006

Unaided private higher education institutions as a percentage of total institutions

Enrollment in unaided private higher education institutions as a percentage of total enrolment

This growth is reflected in the dominant share of unaided private higher education institutions in professional courses

Percentage share of public and private institutions in professional courses (2006-07)

Sources: XIth Five Year Plan; AICTE and other Professional Councils of Education

8

Distance education

In the last six years the number of institutions offering distance education has almost doubled

A large percentage of students are enrolled in distance education courses

Distance education and vocational training have grown to acquire an important role in Indias tertiary education system

5.7

10.1

1720 22

Vocational education and training institutes (ITI/ITC) in India have substantially increased over the past two decades

The capacity in ITI/ITC account for 43% of the total capacity in vocational education and training institutes in India

Vocational education

Student enrollment in distance education as a percentage of total students in higher educationNumber of institutions offering distance education

725,000

408,150

545,734

295,000

230,000

2.3

5.7

1975-76 1981-82 1990-91 1999-00 2001-01 2002-03

4,274 4,4654,647

5,253

6,906

Growth in Vocational Education and Training Institutes (ITI/ITC)

Capacity in Vocational Education and Training Institutes

230,000

Vocational

Education in

Secodary

Schools

ITI

ITC

Poly

technic

s

Apppre

ntic

eship

s

Sources: Turkish Online Journal of Distance Education Volume 3: A comparative study on current trends in Distance Education in Canada and India 2002; XIth Five Year Plan; ILO: Industrial Training Institutes of India 2003; MoLE: Annual Report 2008-09

1,080

2,447

1982 1992 2000 2001 2002 2005 2009

9

For every one of our people to benefit from new employment opportunities being created across the economy, we must ensure that every Indian is educated and skilled

-Prime Minister Dr. Manmohan Singhs address to the nation on Independence Day 2007

However, Indias education system is bogged down by the fundamental challenges of access, equity and quality

Access

Availability of suitable number of institutions across regions

to fulfill demand

Equity

Equal opportunity for all sections of society to participate in higher

education

Quality

Provision of suitable infrastructure, trained faculty and

effective pedagogy in higher education institutions aimed at

delivering

Equity is at the heart of a good educational system. We dont have equity.

- Keynote address by Kapil Sibal at World Conference on Higher Education

Expansion of the higher education system must be accompanied by steps to ensure quality and high standards

- Speech by President of India, Smt. Pratibha Patil at conference Facing global and local challenges: the new dynamics of higher education

delivering expected outcomes

Sources: EY Analysis

10

As compared to a GER world average of 26% in 2007, GER in India at 12% is extremely low

Access to the higher education system is currently restricted to a small portion of the society

GER in India increased from 5% in 1980 to

12% in 2007 while in the same period

Chinas GER increased from 1% to 23%

Indias GER grew at a CAGR of 3.4% as

compared to Chinas CAGR of 12.8% from

1980 to 200753.00

71.00

77.0084.00 82.00

46.00

53.00

71.0075.00

While enrollments in India have grown at a good pace it is still considerably less than what has been achieved by China

Gross Enrollment Ratio (GER) (percentage)

11.00 11.00

16.00

25.00

5.00 6.0010.00 11.00 12.00

1.00 3.00

20.0023.00

NANA

8.00

1980 1990 2000 2005 2007

USA Brazil Russia India China

Enrollments in India grew at a CAGR of

5.39% as compared to a CAGR of 13.07%

in China from 1980 to 2007

13.5414.76

17.71 17.76

12.85

20.60

25.35

11.57

13.54

1.412.78

4.575.70

9.00 9.37

3.28

9.40

11.7812.85

1.04

7.36

1.60NA

5.20

NA

4.78

3.93

1980 1990 2000 2005 2007

USA Brazil Russia India China

Sources: UNESCO: Global Education Digest 2009

Enrollment (million)

11

6.6

6.75.7

8.5

11.2

10.5

13.9

7.2

8.110.9

12.413.7

11

9.4

8.9

11

7.1 11.4

6.3

9.1

15.1

7.8

Indias GER shows significant variability across regions: In the states it ranges from a low of 5.7 in Bihar to a

high of 15.1 in Uttaranchal

In the union territories it ranges from a low of 1.9 in

Daman Diu to a high of 33.2 in Delhi

There is wide geographic variation in GER in India (2005)

There is wide disparity across states in access to higher education

12.9

11.6 12.4

9.9

128.9

14

Daman Diu to a high of 33.2 in Delhi

SGDP* per capita, 2005

Delhi

60,000

Goa

Universal higher education is still a distant dream as most states have an elite higher education system

According to a report by Martin Trow, higher education systems can be classified as elite, mass, and universal higher

education systems

An elite higher education system ranges from a GER of 0-15, mass from 15-50 and an universal system of higher education from

a GER of 50 and above

Most Indian states, including those with high GDP per capita have an elite higher education system

GER,2005

0 15 50Elite higher education system Mass higher

education systemUniversal higher education

system

MeghalayaNagalandRajasthanChhattisgarhManipur

20,000

40,000 HaryanaMaharashtraHimachal PradeshGujaratWest Bengal

Tamil NaduKarnatakaUttaranchalAndhra PradeshArunanchal PradeshTripura

OrissaJharkhandMadhya PradeshUttar PradeshBihar

Uttaranchal

MizoramSikkimKarnatakaKeralaPunjab

AssamJ&K

Sources: CMIE: State Analysis Service; UGC: Higher Education in India 2008* State Gross Domestic Product

12

There exists a significant difference in the GER of urban and rural India

The Indian higher education system suffers from a large rural-urban divide in access, gender inequity, and largedifferences in GERs in various communities

7.67 8.578.85

10.0812.59

3.95 4.77 4.665.58

7.51

17.6819.96 20.17 20.44

23.79

1983-84 1987-88 1993-94 1999-00 2004-05

The GERs for females is very low especially in rural India The GERs for males also varies significantly between rural and urban areas

GERs in rural India have increased from 3.95% in 1983-84 to 7.51% in 2004-05 while in urban India GERs have increased

from 17.68% to 23.79%

Though GER in rural India has increased, the gap between GERs in rural and urban areas has only widened

The gap in urban rural GER is further accentuated if studied from a gender perspective

GERs for rural and urban India in the Indian higher education segment

Total Rural Urban

4.49 5.375.88

7.94

10.57

1.84 2.34 2.013.61

5.67

12.35

15.2316.89

18.71

22.56

1983-84 1987-88 1993-94 1999-00 2004-05

10.87 11.82 11.6612.13

14.42

6.19 7.35 7.227.53

9.28

22.3624.22

23.05 21.9824.77

1983-84 1987-88 1993-94 1999-00 2004-05

Total Rural Urban

While GERs for females has increased significantly there

has been an increase in the disparity in GER for females in

rural and urban areas by 6.38% from 1983-84 to 2004-05

While GERs for males has increased at a slower

rate, there has been a decline in the disparity between

GER in rural and urban areas from 1983-84 to 2004-05

by 0.68%

There is a significant difference in GERs of various communities*

The GERs for SCs, STs and OBCs is very low as

compared to the other communities in the Indian higher

education segment

GER for females in the Indian higher education segment GER for males in the Indian higher education segment

1983-84 1987-88 1993-94 1999-00 2004-05

Total Rural UrbanTotal Rural Urban

GER for different communities in the higher education segment

6.57 6.528.77

17.22

SCs STs OBCs Others

Sources: UGC: Higher Education in India 2008; 11th Five Year Plan Volume II * 2004-05

13

Shortage of quality faculty

Rising enrolment and shortage of faculty have lead to Indias higher education system having the one of the highest

student teacher ratio

India has one of the highest student-teacher ratios in the world

Moreover, faculty appointment for higher education has grown at a slower pace than student enrollments

Quality of higher education in India is impacted by shortage of faculty and poor infrastructure

13.611.0

26.0

13.5

18.2

14.00.472

0.488

0.503 0.505

Lack of infrastructure

Higher education institutions face an acute problem in

Percentage of institutes under the UGC with infrastructure deficiencies

Student- Teacher Ratio (2000)

Growth in faculty ( in million )

Growth rate of enrolment during this period 6.3%

Currently, many faculty positions in higher education institutes are not filled

According to an AICTE report in 2003 there was a

shortage of 33,574 PhDs and 42,831 M.Techs in

engineering institutions

Brazil Russia India China UK USA

2005 2006 2007 2008

Vacant Faculty Positions 2007-08

45%51% 53%

18%

41%

Prof Reader Lecturer

University College

48.26%68.58%

terms lack of academic and physical infrastructure

There are 153 universities and 9,875 colleges with

infrastructure deficiencies recognized by the UGC

The academic infrastructure in colleges across the country when compared with that of premier institutes and the AICTE norms highlights their poor status

48.26%

Universities Colleges

Books per student Journals per student Students per computer

22988

53

9

ISB IIT Bombay Average IndianCollege

4.35

0.400.01

ISB IIT Bombay AverageIndian College

2 4

AICTE norm(MBA/MCA)

AICTE norm(UG)

Average IndianCollege

Sources: UGC: Higher Education in India 2008; ICRIER: Higher Education in India, The Need for Change, Working Paper 180; AICTE: Hand Book for approval process; ISB: Website; IIT Bombay: website; EY Analysis

14

SJTW Top-500 universities Rankings, 2009

FT Top-100 Global MBA Rankings, 2009

THE Stream Wise Top 50 University Rankings, 2008

Eng &Tech Arts & Hum Life Sc. & Biomed

Despite having one of the largest higher education system in the world few Indian institutions have earned global distinction

6

15

21

42

160

Brazil

Australia

Canada

UK

USA

1

2

5

17

55

0

5

5

4

15

0

4

3

6

19

0

6

4

7

22

Indian Institute of Science and IIT

Kharagpur ranked in the 303-401

range, however in 2008 IIT Kanpur

featured in the ranking in place of IIT

Kharagpur the same range

Ranking Parameters

Quality of Education

Quality of faculty

Research Output

Size of the institution

Weighted Salary

% Salary increase

Placement/employment

Research

Research Quality

Graduate employability

International Outlook

Teaching Quality

Indian School of

Business, ranked 15th up from

20th in 2008 and is the only

Indian management institute to

appear in the list

IIT Bombay and Delhi ranked 36th and 42nd

respectively however they ranked 33rd and

34th in 2007

30

2

2

6

China

India

Russia

Brazil

2

1

0

1

4

2

0

0

1

0

0

0

2

0

0

0

This dearth of quality institutes has led to an abnormal rush of students to get a seat in the few good ones

Seats as a % of total test takers

5%

IIMs

2%

IITs

Sources: Shanghai Jiao Tong University: 2009 Rankings; Financial Times: 2009 MBA Ranking; Times Higher Education: 2008 Stream Wise Ranking

15

Growth in Indian students studying overseas Percentage of Indian students studying in foreign countries 2005-06

In pursuit of better quality education, an increasing number of Indian students are studying abroad

53,417

66,475

94,446

109,577

150,194159,779

48%

15%

4%

3%

13%

The value of imports (Indian students overseas) is extremely high at 0.46% of GDP which comprises of around 80% of the public

spending on higher education

The figure is also comparable to the total spent on higher education which is 1% of the GDP in India

Value of imports of higher education in 2004 (USD million)

Higher education imports as a percentage of GDP

Imports as a percentage of public spending on higher education

Revenue loss

1999-00 2000-01 2001-02 2002-03 2004-05 2005-06

17%

U.S.A Australia U.K.

Canada Singapore Other Countries

3,151

5,080

0.46

0.26

80

60

India China India China India China

Sources: Pawan Agarwal: Indian Higher Education, Envisioning the Future 2009; The World Bank: Trends in International Trade in Higher Education 2007

16

Higher education and vocational training are critical to India reaping the demographic dividend from possessing a young employable population

As compared to other countries, Indias has a relatively younger population with a median age of 25 years

36.740.2

28.6

38.4

25.3

34.1

United

States

United

Kingdom

Brazil Russia India China

and is expected to benefit from the younger population which will enter the workforce over the next decade

The proportion of dependent population in India is expected to reduce, while it is rising in other countries

A majority of Indias population lies between the ages of 15-64 years, resulting in a low dependency ratio and a substantial working population relative to other countries.

However, in the absence of appropriate education and training, India may lose out on the demographic dividend due to a lack of skill set to meet the needs of the industry

Higher education and vocational training will therefore play a critical role in preparing the work force to be constructively utilised to drive growth of the economy

Median Age (2009)

States Kingdom

Indias population by age group

39 36 34 3125

58 5962 64

68

3 5 4 5.37

1980 1990 2000 2009 2020E

0-14 years 15-64 years 65 years and above

2020E 2016E

Dependency Ratio

0.57 0.470.39 0.49

2.03

2009

India China USA

Sources: XIth Five Year Plan; CIA Factbook; United States Department of Labor: Employment Projections 2007; EY-EDGE 2008: Globalizing Higher Education in India

17

which can not only drive domestic growth to overtake the developed economies but also address global manpower demand-supply gap

India is emerging as one of the fastest growing economies as per the BRIC report

According to the BRIC report, released by Goldman Sachs, India is projected to become one of the leading economies in the world. However, education was identified as a key enabler for India to achieve these projections. Lack of a strong higher education system 10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

US

$ B

n

a strong higher education system may have a debilitating impact on Indias efforts to achieve the forecasted growth

-

5,000

10,000

2000 2010 2020 2030 2040 2050

China India Japan US Germany

India is already a well established source of highly talented manpower

Indians as a % of total manpower/ workforce

5% 12% 36% 34%20%

Medical doctors in USA Scientists in USA Scientists at NASA

Employees at Microsoft

Scientists at Intel

By 2020, aging of world economies would create a skilled manpower shortage of 56.5 million, while India alone will have a labor surplus of 47million

and can potentially resolve the labour supply-demand gap in various countries

-17-10 -9

-2-12.5

3 5

19

47

19

-6

US China Japan Russia UK Others Brazil Mexico Pakistan India Others

Shortfall Surplus

Sources: XIth Five Year Plan; Goldman Sachs: Global Economics Paper No: 169 2008; Goldman Sachs: Global Economics Paper No: 99 2003

18

Potential impact Problem solved

Access Equity Quality

Game changers

1. Financial innovation Increasing the number of institutions to plug the demand

supply gap and provide access in low GER areas

Upgrading facilities to create world class infrastructure at

higher education institutions

Allow Government funds to be deployed to reduce

inequity

Five game changers that are critical for India to achieve its targets and propel the country into becoming a knowledge superpower

2. Reinvigorating research

3. Innovative use of ICT

4. Thrust to vocational education and training

Improve the quality of Indian HEIs

Significantly enhance the impact of the education system

on the overall economy and make India a knowledge

superpower

Improving access to the system through

online education

Improving quality of teaching, especially across

remote locations

Increasing transparency and bolstering systems and

processes across HEIs

Creating courses which are relevant to certain

sections of society, thus attracting them to the

higher education system

Creating a pool of skilled resources to harness Indias

demographic dividend

5. Regulatory reforms Providing a conducive environment for the entry & growth

of a large number of high quality higher education

institutes

Sources: EY Analysis

19

Current state

Key challenges

Best practices

Recommendations

2. Financial innovation

20

Sources @ national level Sources @ state levelInstitutions

Public financing of higher education in India operates through a complex system, with grants allocated by various agencies at the central and state levels

University Grants

Commission

(Government of India)

Central Universities and colleges affiliated to Delhi University, Allahabad University and Banaras Hindu University.

Deemed universities (excluding private deemed Universities)

State universities (excluding private universities), state government

UGC (for 12 universities)

and Central plan assistance

(for 12 other universities)

UGC (but at state

level only a few are

directly funded)

State Department of

Higher Education.

UGC (provides limited

grants)

General higher education

universities), state government colleges, private aided colleges

Higher Education. grants)

Central technical institutions (IITs, IIMs, NITs etc).

State technical universities and colleges

Department of Higher

Education

(Government of India)

State Department of

Technical Education

All India Council for

Technical Education

(provides limited grants)

Technical education

Central medical institutions such as AIIMS

State health universities and colleges

Ministry of Health

(Government of India)

State Department

of Health

Medical education

Agriculture

Central agriculture universities Indian Council for

Agricultural Research

(Government of India)

Ministries at national and state levels provide support to specialized institutions under their jurisdiction. For example, the

Ministry of Textiles directly funds the National Institute of Fashion Technology (NIFT) while the Ministry of Commerce and

Industry funds the National Institute of Design (NID).

Sources: Pawan Agarwal: Indian Higher Education, Envisioning the Future 2009

Agriculture education

State agriculture universities and colleges

(Government of India)

State Department

of Agriculture

21

Public expenditure on higher education as a percentage of GDP*

While Indias public expenditure on higher education as a percentage of GDP is comparable to other countries, it is extremely low when assessed on a per student basis

1.60%

1.40%

1.00%

0.60%

0.90%0.80% 0.80%

0.60%

Public expenditure on higher education per student PPP USD*

Finland Sweden USA India UK Brazil Russia China

10,836

13,759

10,616

1,162

10,060

2,977

1,8632,728

Finland Sweden USA India UK Brazil Russia China

Sources: UNESCO: Global Education Digest 2009; EAI Background Brief No. 394, Chinas Great Leap in Higher Education, 2008; * 2007 or the latest year for which data is available,

22

State governments have historically been a larger source of public funding for higher education, vis--vis the central government. However the balance has been shifting towards the central government in recent years

Share of spending on higher education (2007-08)

33%

67%

Central Government State Government

Share of spending of central government on higher education (2009)

Share of spending of state governments on higher education**

Central government expenditure on higher education has increased rapidly especially in 2009-10

As compared to the central government, expenditure on higher education by state governments has increased at a slower pace

Central Government State Government

38%

28%

17%

17%

General Higher EducationTechnical Higher Education

AgricultureMedicalTotal central government expenditure on higher education (INR billion)

69.680.4

117.4

135.4

196.2

76.1 89.0113.2

83.0

2005-06 2006-07 2007-08 2008-09 2009-10

Plan Non Plan

34.2 38.2

41.346.4

42.235.4

Sources: Union Budget: 2005-06, 2006-07, 2007-08, 2008-09, 2009-10; MHRD: Analysis of Budgeted Expenditure on Education, 2003-2004 to 2005-2006, 2005-06 to 2007-08

52%

13%

35%

General Higher Education

Technical Higher Education

Agriculture, medical and others

Total state government expenditure on higher education (INR billion)

107.1116.2

137.1

13.4 16.7 21.8

93.799.6

115.2

2005-06 2006-07 2007-08

Plan Non Plan

23

Central Government

The central government retains a higher share of spending on technical education while state governments account for majority of spending on general education

Share of spending on technical education (2007-08)Share of spending on general education (2007-08)

26%74%

Central Government State Government

58%

42%

Central Government State Government

State Governments

Plan expenditure has grown at a CAGR of 39.4% as compared to Despite a lower share of spending on technical education, expenditure on technical education is increasing at a faster

Central Government

Expenditure on general higher education has increased rapidly with a substantial increase 2009-10

Expenditure on technical education has seen substantial increases in 2007-08 and 2009-10

21.1

27.3

38.9

52.4

77.1

Central government expenditure on general higher education (INR billion)

7.9 12.222.1

31.839.6

13.215.1

16.8

20.5

37.5

2005-06 2006-07 2007-08 2008-09 2009-10

Plan Non Plan

16.017.2

38.739.6

54.2

Central government expenditure on technical education (INR billion)

7.3 8.4

29.3 28.935.3

8.7 8.8

9.4 10.8

18.9

2005-06 2006-07 2007-08 2008-09 2009-10

Plan Non Plan

Plan expenditure has grown at a CAGR of 39.4% as compared to a CAGR of 10.3% for non plan expenditure

expenditure on technical education is increasing at a faster rate than general education

85.892.6

108.7

21.2

23.6

28.4

State government expenditure on general higher education (INR billion)

State government expenditure on technical education (INR billion)

Sources: Union Budget: 2005-06, 2006-07, 2007-08, 2008-09, 2009-10; MHRD: Analysis of Budgeted Expenditure on Education, 2003-2004 to 2005-2006, 2005-06 to 2007-08

5.6 7.7 11.0

80.284.9

97.7

2005-06 2006-07 2007-08

Plan Non Plan

7.8 9.010.8

13.414.6

17.6

2005-06 2006-07 2007-08

Plan Non Plan

24

Key challenges affecting financing of higher education

Challenges

25

Plan expenditure Non plan expenditure

Expenditure on existing programmes/projects and

schemes which leads to additions or extensions in

capacity of existing institutions/establishments

Expenditure on all new plan proposals

Investment outlays for improving productivity/performance

levels of existing capital stock

Investment to replace worn-out capital

Generic term used to cover all expenditure of

government not included in the plan expenditure

All expenditure connected with the maintenance of

existing institutions and establishments

All expenditure on continuing services and activities

Majority of the funding by the government is directed towards maintenance of institutes and to support operations rather than capacity expansion and upgradation

Percentage of state government expenditure on general and technical higher education

Percentage of central government expenditureon higher education

There has been a slight decline in the percentage spent by the state governments on non plan expenditure though it still accounts for the majority of the expenditure

Percentage spent by the central government on non plan expenditure decreased substantially by 2008-09 however 2009-10 has again seen an increase

12% 14% 16%

88% 86% 84%

2005-06 2006-07 2007-08

Plan Non Plan

51% 53%65% 66% 58%

49% 47%35% 34% 42%

2005-06 2006-07 2007-08 2008-09 2009-10

Plan Non Plan

As compared to the central government, the extremely high non plan expenditure by state governments highlights the absence of new investments which hampers quality of state higher

education institutions

and technical higher education on higher education

Sources: Union Budget: 2005-06, 2006-07, 2007-08, 2008-09, 2009-10; Planning Commission: Guidelines for classification of expenditure

26

UGC receives around 96% of central budgetary outlay for University & Higher education system

But a majority of Indian universities and colleges do not qualify for either central or UGC funding

Eligibility of universities/HEIs for Central Government Percentage allocation in Union Budget for Technical

The flow of central funding is skewed towards certain groups of HEIs with inherent issues in the budgetary process and financing mechanism

Funding of higher education institutions in India follows a traditional budgetary process.

Submission of budget proposals

to funding authoritiesNegotiations on separate

budget items

Line item based

fund allocation*

Eligibility of universities/HEIs for Central Government funding (Number of institutions)

Percentage allocation in Union Budget for Technical Education* (2009-10)

5,527 5,327

200

4,726

78

7,720 7,650

70

4,648

Total Colleges Universities

Eligible for central funding Not eligible for central funding

Not eligible for any funding

38.67%

31.32%

3.08%

18.62%

2.91%5.40%

IITs

IIMs

IISc

NITs

ISM Dhanbad

Others

Percentage allocation of Department of Health for Medical Education* (2009-10)

5%

13%All India Institute of Medical Sciences (AIIMS)

Lady Hardinge Medical College & Smt. Sucheta

Kripalani Hospital

Key challenges in UGCs funding mechanism

Absence of incentives to raise fees/improve financial

performance

Archaic negotiation based system

with little focus on performanceLack of transparency in allocating

funds to HEIs

37%

9%21%

15%

Kripalani Hospital

Post Graduate Institute of Medical Education &Research, Chandigarh

Jawaharlal Institute of Post Graduate MedicalEducation & Research

Cancer Research

Other Educational Institutions

Sources: Union Budget 2009-10; UGC Annual Report 2005-06; Pawan Agarwal: Indian Higher Education, Envisioning the Future 2009 *There has been an effort to move towards block grants over recent years

27

Tuition fees at higher education institutions continues to remain low, especially at public institutes

Tuition fees as a percentage of total expenditure is low in India as compared internationally

53.40% 52.10%

36.30% 36.10%30.60%

19.10%

Japan Republic ofKorea

Australia United States Mexico India

Limitations on level of public financing are leading to an increase in cost sharing by parents and students globally.

This has in turn led to an increase in the fee levels across the world.

However, Indian higher education still witnesses comparatively lower household expenditure on higher education

due to low fee levels.

Source of income for higher education as a percentage of income

The proportion of fees in income for higher education institutes declined from 37% in 1950-51 to 12% in 1986-87 while the share of the Government rose to 76%

Tuition fees as a percentage of total expenditure (Public and Private) on higher education (2007)

Korea

49.4 53.561.0

72.8 75.9

36.8 34.825.5

17.4 12.6

13.8 11.7 13.5 10.8 11.5

According to National Knowledge Commission, fees constitute less than 15% of the total expenditure of Indian universities. The

Eleventh Plan has also highlighted the low fee levels, urging universities to recover at least 20% of operating costs from fees.

Fee levels are still considerably low in major central universities (Delhi University, JNU) in India. However they are comparatively

higher in some state universities (Madras University, Bangalore University). Fees are also high in most professional courses.

the Government rose to 76%1950-51 1960-61 1970-71 1980-81 1986-87

Year

Government Fees Others

Sources: UNESCO: Global Education Digest 2009; NKC: Report to the nation 2006-09; CABE Committee 2005: Report on Financing of Higher and Technical Education;

28

India does not have robust scholarship and student loan schemes which can make higher education accessible at a more aligned tuition fee structure

Public expenditure on scholarships has been declining over the years

0.53%

0.38%

0.15%

0.32%

0.48%

0.23%

0.12%

0.23%

1991-92 1995-96 1999-00 2003-04

% of total expenditure on Higher Education

% of total expenditure on Technical Education

Scholarships schemes provided by the government cover a very insignificant portion of the total student population. In

fact, expenditure in terms of scholarships for higher and technical education as a percentage of total expenditure has

declined by 0.17% and 0.22% respectively in 2003-04 from 1990-91 having reached a low in 1999-2000

For the years 2008-09, Government earmarked an expenditure of merely INR 450 million on scholarships in higher education

with an objective of covering just 2% of the student population in colleges and universities

While the government scholarship reaches a very small proportion of the students, Universities themselves do not have any

scholarship scheme. Almost 56% universities have schemes which cater to less than 10% of the students while 23% do not

have any university level scholarship schemes for students

Lower coverage of government scholarship schemes (2009) Even lower presence of university level scholarship schemes (2009)

Public expenditure on scholarships in Higher and Technical Education

% of total expenditure on Technical Education

30%

19%

21%

23%19%

2%

Scholarship coverage (Government schemes) Scholarship coverage (University level schemes)

30%

Nil Less than 10%

From 10-20% >20%

56%

Nil Less than 10%

From 10-20% >20%

Sources: CABE Committee 2005: Report on Financing of Higher and Technical Education; Pawan Agarwal: Indian Higher Education, Envisioning the Future 2009; EY FICCI Higher Education Survey 2009

29

Though student loans have gained in popularity as a form of financing higher education, the proportion of students availing them continues to remain low

Student loan accounts have gained in popularity especially after 2000

0

20000

40000

60000

80000

100000

120000

1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

0

100

200

300

400

500

600

700

Education loans in India have a very high rate of interest as compared internationally (2005)

However an extremely low percentage of graduates in India avail student loans (2005)

Interest rate prevalent in Despite recent growth, student

Growth in student loan accounts and portfolio in India

Amount outstanding ( INR million) Number of Loan Accounts (In thousands)

Percentage of graduates availing student loans Comparison of interest rates for education loans

77%

50%

1%

85%

50%

85%

Australia USA India UK Canada Sweden

2.40%

11.75%

3.37% 3.37%

7.50%

Australia India* Unites Sates United

Kingdom

Canada

According to a recent market study, 81% of the students showed interest in availing education loans but identified key concerns such as: Higher Interest rate

Cumbersome procedures and documentations

High administrative cost

Absence of special provision for weaker sections of the society

Interest rate prevalent in India for education loans is very high (11..75%*) as compared to USA and UK (3.37%)

Despite recent growth, student loans availed by graduates in India are abysmally low. This despite the fact that India has witnessed a very low default rate (1.1%) and delinquent level (0.7%) in education loans.

Sources: CABE Committee 2005: Report on Financing of Higher and Technical Education;; Alex Usher: Global Debt Patterns An International Comparison of Student Loan Burdens and Repayment Conditions 2005

30

Higher education institutions in India also underutilize other revenue streams such as intake of foreign students at differential fees, research and consultancy

India fares poorly in attracting foreign students

623,805

389,330

265,710233,606 202,448 195,503

18,594

UnitedStates

UnitedKingdom

France Germany Australia China India

Differential fees for international students is a very popular cost-recovery measure abroad. This is because of the higher

fee paid by foreign students as compared to domestic students. In Canada, an international student pays approximately

USD 12,500 (in 2005) which is double the fees charged from the local citizens. In UK, universities generated an income of

almost GBP 1.88 billion from non-EU students in 2007-08

Revenue from research consultancy constitutes a very small proportion of total fund inflow (2009)

Majority of the HEIs surveyed indicated that research & consultancy account for less than 20% of the total fund flow, with many deriving nil revenue. HEIs were also lax in their utilisation of owned assets and encouraging

Number of international students (2008)

States Kingdom

16.28%

74.42%

6.98%0.00% 2.33% 0.00%

Nil 80%

Universities abroad raise additional funds from entrepreneurial activities and by maximising utilisation of assets. The following examples show the extent to which these universities have succeeded in self financing operations: In Beijing University 39.7 per cent of the income in 1998 was from the state and the rest from its own sources. The government

share of funds in public universities declined from 82 per cent in 1992 to 63.4 per cent in 1997

Through its Educational Research and Innovation Complex , the Orel State Technical University of Central Russia has been able to

create three times more training programmes, increase laboratory and class room space by 8.5 times, registered patents by 5

times, volume of research and development by more than 8 times in a period of 7 years

owned assets and encouraging endowments for financing operations

Percentage of total fund inflow

Revenue from research and consultancy*

Sources: Guardian UK: Twice as many foreign students at UK universities 2009; Atlas of Student Mobility: Website; EY FICCI Higher Education Survey 2009

31

Our survey indicates that private institutions depend largely on student fees while public institutions depend on government grants, even as both generate little revenue from alternate sources

Out of the institutions surveyed, public depend on government grants*

While private institutions depend largely on student fees

which is reflected by the higher fees charged by them

Proportion of institutes government grants

98%

29%

2%

21%

50%

Student fees as a percent of total revenue

78%

41%

11%

59%

11%

Level of student fees

35%

75%

33%

15%32%

10%

Almost 60% of the institutions surveyed did not generate any endowments

2/3rds of the higher education institutions surveyed did not have student loan facilities

(INR Thousand)

Private Public

80%

Private Public

80%

Private Public

100

Percentage of institutions with student loan facilities Percentage of institutes to have received endowments

66%

34%

Not facilitating loans Facilitating loans

58%

42%

Received Not received

Our survey has indicated that regulation of fees is the major financial challenge before Indian higher educational institutions

According to the institutions surveyed, the key financial challenges include regulation of fees, attracting private investments and limited government grants

Indian higher educational institutions

Key financing challenges faced by Indian higher education institutions

44%

30%

22%

4%

Regulation of fees Attracting privateinvestment

Limited government grants Others

Sources: EY-FICCI Higher Education Survey 2009* Grants from Central Government, State Government or UGC

32

We believe that analysis of successful models of financing could provide critical inputs in structuring innovative solutions

Manipal Academy of Higher Education (MAHE) India entered into an agreement with Joint Venture Medical College Corporation

(JVMC) Malaysia to start a private medical college in Malaysia. The key objective was to provide additional doctors for Malaysia

and offer opportunities for students in the region to study medicine at a cheaper cost than in the West.

The agreement led to partnership between the State Government of Melaka, the Manipal Group and members of Indian Diaspora

in Malaysia.

The local government provided teaching staff, supervisory services along with financial assistance to students. It also allowed use

of local government hospitals for training and teaching purposes

On the other hand, the private partners contributed to the infrastructure for the Melaka campus with a provision of patient care

service and training of staff in the health centers. The private partners also contributed by partially conducting the program in their

India campus, as there was a shortage of faculty for basic sciences in Malaysia

The Melaka-Manipal Medical College PPP for establishment of a private medical college

India campus, as there was a shortage of faculty for basic sciences in Malaysia

Benefits Creation of the new college was a step in the direction of increasing the doctor : population ratio. It also led to decreased financial

burden for the government as infrastructure costs were borne by the college.

The private partners on the other hand, gained an opportunity to establish a college leading to increased overseas

exposure, establishment of global reputation and brand name.

A large number of countries across the world have reformed systems of public funding by linking it with performance variables. This ensures a greater focus on outcomes while also allowing autonomy.

Finland

Since 1998, Finland has introduced a system of partially allocating resources on performance, rewarding universities for quality and effectiveness of operations.

A criteria is set for a fixed period and funding extended in line with performance against the criteria, based on evaluations.

The criteria include setting up centers of excellence, international student exchange programs and attracting international students as well as graduate placement record.

Germany

Performance based funding an international trend

Germany

Core funds specifically for teaching and research are negotiated between HEIs and the government.

A unique model is used by The Rhineland-Palatinate which has two funding models,

Basic budget system includes funding for research, teaching, and academic staff.

Separate distribution system aimed at course completion targets, research activities and innovative programs

Benefits

These mechanisms have led to a greater link between outputs and inputs in the higher education system.

Sources: Kathmandu University Medical Journal (2005), Vol. 3, No. 4, Issue 12;

33

beneficial both to the HEI and students while addressing the challenges of access and equity

The Higher Education Contribution Scheme (HECS) was launched in Australia in 1989 to contribute to students cost of higher education. It was designed to ensure access to all students regardless of their socio-economic background,.

The program is administered by Department of Education, Science and Technology (DEST), the Australian Tax Office and the higher education institutions.

Under the scheme, students can pay tuition fees upfront to universities and receive a 20% discount. They can also choose to defer the payment and take a loan at zero real interest rate from the Government. In both cases, the government pays the amount to theinstitutions directly. From 1998, students can also choose to pay both a discounted upfront fees along with deferring rest of the payment.

Student repayment of the HECS debt is through an income contingent liability scheme under which they pay through the taxationsystem after their salary reaches a threshold. The repayment rate ranges from 4%-8%.

Innovative student loan scheme in Australia

system after their salary reaches a threshold. The repayment rate ranges from 4%-8%.

Benefits

The Australian Government introduced tuition fees simultaneously with the loan scheme which eventually led to a significant decrease in government financing of higher education. The government support on higher education decreased from 77.2% of the costs in 1989 to 53.8% in 2002.

In November 2008, Indian School of Business (ISB) signed an agreement with the Government of Punjab (GOP) to set up its second campus in India at the Knowledge City, Mohali.

The cost of the project is INR 3000 million. To fund the project, ISB succeeded in getting four endowments of INR 500 million each from its founder supporters the Bharti Group, the Max Group, the Hero Group and the Punj Lloyd Group.

In return for the endowments, ISB would set up four specialist centers for excellence named after its founder supporters,

Max India Institute of Healthcare Management

Bharti Institute of Public Policy

BML Munjal Institute of Manufacturing and Operation Excellence

Punj Lloyd Institute of Physical Infrastructure Management

These centers of excellence would promote research in their specific fields as well as provide specialisation options for management students

Funding through endowments at ISB Mohali

Benefits

For ISB, success in raising a large part of its project costs through endowments enabled achievement of its growth plans. ISB also recieved commitments from its supporters to provide internships and recruit students from this campus

On the other hand, the founder supporters were able to further research in areas of interest to them, as well as attract moremanagement students to focus and specialize in these areas. They also furthered the cause of improving the quality of education in their home state by attracting a leading management institution

Sources: Graduate School of Education - University of Buffalo, The International Comparative Higher Education and Finance Project 2006; ISB: website

34

Recommendations on financial innovation

Rationalise tuition fee

Tuition fees in India account for ~14% of total expenditure incurred on higher education and ~12% of total income - levels that are much lower than those for other countries. Tuition fee should be rationalised upwards to internationally accepted levels (~25% of income)

Differential pricing may be accorded for students belonging to economically weaker sections

A rationalised structure would enable self sustenance of HEIs and reduce strain on public funding

1

Build strong financing structure

Create robust financing system to support rationalised fee structure through scholarships (public and industry sponsored) and accessible student loans (potentially by securitising

2

Support raising of revenue through alternate sources

Encourage higher education institutes to identify and develop innovative sources of income other than fees and grants, such as monetization of IP (research patents, licenses), organising seminars/ public events, consulting etc. For this purpose, set out model practices, incentivise faculty through revenue sharing, and institutes through higher grants for better performance on these factors

Develop supportive guidelines and norms to increase utilisation of existing assets/land banks of higher education institutes.

3

Encourage endowments

Encourage industrial houses/individuals to give endowments to both public and private HEIs, by providing a 125% weighted tax deduction to all endowments to recognized universities, preferential allotment of seats etc.

At the same time, simplify the procedure for an HEI to obtain approval to be eligible for donations which earn tax exemption for the donor

4

Attract foreign students

Establish an agency under the Association of Indian Universities (AIU) to promote Indian higher education to international students

Appoint partners to facilitate admission procedures for foreign applicants to Indian HEIs

Create a supportive environment for attracting international students through easing of visa

5

structure(public and industry sponsored) and accessible student loans (potentially by securitising student loans provided through Educil)

Create a supportive environment for attracting international students through easing of visa processes and academic reform to facilitate credit transfers between domestic and international universities

Improve management of finances

Support deployment of finance professionals in HEIs

Conduct seminars and short term courses to share best practices in management of operations at HEIs in order to improve utilisation of available finances

6

35

Current state

Key challenges

Best practices

Recommendations

3. Innovative use of ICT

36

Information and Communication Technology (ICT) can perform multiple roles in higher education to benefit all stakeholders...

The term Information and Communication Technology (ICT) refers to the diverse set of technological tools and resources used tocreate, store and communicate information

ICT in education refers to the usage of the technologies for the dissemination of knowledge

Some of the tools utilized in ICT include computers, the internet, broadcasting technologies (e.g. radio, television), and telephony

ICT can perform various roles in higher education

Distance learning with delivery through internet, satellite and other mediums

Technological platform linking universities and other agencies for collaborative research and content development

IT systems for educational institutes including complete student management and recordkeeping

Roles of ICT

satellite and other mediums

Teaching aids in classrooms

Free educational content for all students on online repositories

and benefits all the stakeholders involved

Students Anytime, anywhere learning

Better quality of education

Lower overall cost of education

Employers Cheaper costs of continuing education

Increased convenience in providing education to staff

Higher Education Institutes

Less capital costs

Easier to provide new courses Efficient processes

Better management control

Government Increases number of students under the gamut of education

Increased capacity and cost effectiveness of education systems

37

Greater equity

Better access to students from various socio-economic groups, leading to greater inclusion

Good quality institutions are not restricted to a few pockets but are made accessible to students located all over the country

Content from all over the world

Better Access

Cheaper costs of education

Increased flexibility, providing anytime anywhere access to students

Reduction in capacity constraints making large enrolments possible in courses run by reputed institutes

Usage of ICT can help improve Indias higher education system in three ways

while addressing Indias higher education related problems of inequity, low access and poor quality

Improved Quality

Usage of supplementary teaching aids

Better and more efficient processes and management systems

Access to up-to-date content

Increased knowledge sharing among course creators and Content from all over the world

can be made available to students with access to internet

run by reputed institutes

Technology can be leveraged to provide access to courses in new and emerging fields to greater number of students

ICT can help increase Indias GER aiding it in its transformation towards becoming a knowledge society

among course creators and scientists

Creation of comprehensive centralized digital repositories for reference material

38

Past initiatives of the government have used ICT for content delivery and as an enabler of access

Gyan Darshan

Launched in 2000, Gyan Darshan is a bouquet of channels that broadcasts educational programs for school kids, university students, and adults

Courses are contributed by IGNOU, UGC CEC, IITs etc

Gyan Vani

It is a bouquet of FM radio channels which broadcast programs contributed by institutions such as IGNOU and IITs

UGC Countrywide Classroom

Under the country wide classroom initiative, education programs are telecast on Gyan

The government has taken many initiatives to promote education using ICT over past few decades

Delivery of content

Under the country wide classroom initiative, education programs are telecast on Gyan Darshan and Doordarshans National Channel (DD1) everyday

Till date, more than 10,000 programs have been telecast on subjects such as Arts and Social Sciences

E-Gyankosh

It is a knowledge repository launched by IGNOU in 2005 which aims at storing and preserving digital learning resources. Almost 95% of IGNOUs printed material has been digitized and uploaded on the repository

National Programme for Technology Enhanced Learning

Approved in 2001, National Programme for Technology Enhanced Learning (NPTEL) is a joint initiative of IITs and IISc

As a part of its first phase, digital course content for 129 engineering/science courses has been developed and uploaded on youtube

Enabling access to resources

E-journal consortia

AICTE Indian National Digital Library in Engineering & Technology (AICTE INDEST) is a consortium set up by the Ministry of Human Resource to enhance greater access and generate annual savings in access of bibliographic databases

UGC has also launched its Digital Library Consortium to provide access to peer reviewed journals and bibliographic databases covering subjects such as arts, humanities, and sciences

to resources Networking of higher education institutions

Education and Research Network (ERNET) promoted by the Department of Information Technology, Government of India, provides communication infrastructure and services to academic research institutions in India

It is undertaking networking projects such as AICTE-Net, ICAR-Net and UGC-Infonet to provide internet and intranet facilities

Sources: NPTEL Project Document July 2003-June 2007; IGNOU Profile 2009; UGC CEC website; ERNET Website

39

The National Mission on Education through ICT is an INR 50 billion, centrally sponsored scheme submitted by the Ministry of HRD and approved by the Cabinet Committee on Economic Affairs (CCEA)

The Mission envisions to cater to the learning needs of 500 million Indians

Some of the key objectives of the Mission include:

Availability of e-knowledge content free of cost to Indians

Development of knowledge modules to take care of personalized needs of learners

Providing support for the creation of virtual technological universities

Building connectivity and knowledge network among and within institutions of higher learning in the country

Standardization and quality assurance of contents to make them world class

Spreading digital literacy for teacher empowerment

In 2009, the government approved the landmark National Mission on Education through ICT scheme

Recently, National Mission on Education through ICT was launched by the government to harness ICTs potential to make a difference

Spreading digital literacy for teacher empowerment

Certification of competencies of the human resources acquired either through formal or non-formal means

The Mission has planned a variety of initiatives aimed at developing and standardizing digital content for Indian higher education segment

Scaling up Sakshat portal

The Mission intends to scale up the existing Sakshat portal to take care of the needs of entire learning community.

It will also act as a human resource database aiding education related decision making.

Generation of new digital content

It also plans to generate new online course content for UG, PG and Doctoral education.

Efforts are already underway to prepare course content for 130 courses (Includes UG and PG courses).

Quality assuranceVirtual Technical University (VTU) Quality assurance

It is also planning to set up national resource centers for standardization and quality assurance of e-content for College and University segment and Engineering and Technology segment.

Virtual Technical University (VTU)

The Mission envisages creation of a VTU to enable training of UG/PG students along with new teachers.

It will focus on science, technology, management and other related areas.

Sources: Mission Document, National Mission on Education through ICT

40

Many companies have entered the business of providing ICT infrastructure

HughesNet

Exam

ple

s o

f co

mp

an

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Reliance World

Has a network of 50 classrooms in 34 cities equipped with the technology to receive satellite signals from studios located in educational institutes. Examples of institutes using HughesNet infrastructure include IIMs, IITs and XLRI

Part of Reliance ADAG, Reliance World is a chain of cyber cafes that has tied up with testing companies to offer testing centers (e.g. TOEFL)

The private sector too has tapped the opportunity to provide knowledge infrastructure and leverage ICT for expanding capacity

while private educational institutes are delivering courses over ICT

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Oracle

testing companies to offer testing centers (e.g. TOEFL)

Provides enterprise-strength solutions that help educational institutes in improving performance management, reporting, compliance, efficiency and recruiting

Institute Segment Description

Amity University

Higher Education Offers online MBA and BBA programs

Arihant Institute

Test Preparation

Has a network of classes equipped with technology to receive satellite signals

CA coaching lectures recorded at base location in Ahmedabad are relayed to these classes in various cities

The institutes are also realizing other benefits of using ICT

Macmillan India Higher Education Has collaborated with IIM-C and IIT-D to offers online Management Development

Programs

A USD 1.5 million initiative at Birla Institute of Technology & Science that provides a gigabit backbone, broadband access, IP telephony and conferencing abilities in the institute and hostels

The technological infrastructure is used to connect alumni with the institute on an ongoing basis

BITSConnect

Sources: Company websites

41

Key challenges affecting utilization of ICT in Indian higher education

Implementation challenges which have

contributed to the ineffectiveness of previous initiatives

Challenges

previous initiatives

42

Penetration of computers and internet, especially in rural areas is extremely poor

Disparities in PC ownership across IndiaNumber of computers per 100 (2008)

Low technology and people readiness is a major challenge India faces in realizing ICTs promise in higher education

A

India faces the challenges of low technology and people readiness in order to realize the potential of ICT

80.23 78.76

21% 21%

16%

72%

Percentage of Indians living in

rural areas

1%

Percentage of rural population using

internet

Number of internet users per hundred inhabitants

Fixed broadband penetration is very low at 0.3%

16.12 13.335.61 3.18

UK US Brazil Russia China India

4%

Top 4 metros Next 4 metros 0.5 - 1 M

population

towns

Indias linguistic diversity necessitates the development of content in multiple languages

17%

Out of 368 million literate rural Indians, only 17% can speak English

There is heavy usage of local language internet applications in small towns

Percentage of small town users using applications in local languages

There are linguistic barriers that need to be overcome to increase the penetration of ICT as well

0%

10%

20%

30%

40%

50%

60%

Preference for local languages in small towns and rural areas underscores the need to develop content in multiple languages. However, there are many challenges in development of local language content as listed below:

Absence of standardization

Local language computing continues to reel under absence of script-level and font level standardization.

This limits scalability and flexibility of various initiatives.

Lack of hardware

Although content and applications in the vernacular languages have increased, their dissemination is low due to absence of supporting hardware.

In a multi-lingual country like India, this standardization becomes even more difficult.

Key challenges

0%

Email News ChatSpeak English Do not speak English

Sources: The Internet and Mobile Association of India (IAMAI) report Vernacular Content Market in India,

44

Frequency of listening to IGNOU hour on Gyan Vani, 2008 Frequency of watching UGC CWCR programs in Tamil Nadu, 05-06

Some of the previous ICT initiatives launched by IGNOU and UGC have had limited success

The past initiatives have also been affected by various implementation pitfalls that may impede the successful roll-out of the recent ICT initiatives

14%

41% Regularly

Sometimes

Never

Among those who watched, majority did not

watch it for more than once a week

14.61%

Reasons for not listening to the IGNOU hour on Gyan Vani, 2008 Problems with IGNOU website, 2008

which has been due to many reasons including poor quality, administration and co-ordination

45%

85.39%

Watch

Do not watch

46%

14% 15% 15%10%

Do not have

time

No

information

of schedule

Do not have

radio

Not

interested

Programs

boring

49%

28%

10%

3%

10%

Website is slow

Not updated

Links do not open

Pages not available

Server remains down

Although, India is now also embarking upon ambitious internet based initiatives, past experience highlights the need of an effective media strategy to realize

anticipated potential.

The following are considered to be some of the major problems with UGC CWCR:

Absence of coordination and improper governance

Insufficient increase in staff in comparison to the increase in hours of transmission

Lack of staff expertise (for e.g. - Directors of Media Centers are chosen by Universities from among their professors, although most of them do not have exposure to dynamics of media content production)

Sources: IGNOU ODL Assessment learning 2008; International Journal of Education and Development using ICT (IDEJICT) 2006, Vol2, Issue 4 : Pattern of usage of electronic media by higher education students in Tamil Nadu,; Center for Global Communications Studies, University of Pennsylvania, From

45

The idea of Finnish Virtual University (FVU) was mooted by Finnish Universities in 1998 after they felt a need for a platform for collaboration in teaching and research. This led to creation of FVU as a partnership between all Finnish universities in 2001. It has expanded the reach of higher education by providing online education and administrative services. It has also enabled facilitation of virtual mobility of students among institutions.

FVU is governed by a consortium assembly with a representative each from its member university and the Ministry of Education and is completely funded by the national government. It has enhanced online teaching and learning through innovative practices such as:

Student mobility: FVU has launched a comprehensive portal providing online information and counseling services and self assessment tools

E quality assurance: FVU has prepared an online evaluation tool which measures usability and quality of online courses

Standardized content development: FVU has launched an interactive guide for developing online courses to enable

Multi university partnership for integration of ICT in Finnish Virtual University

ICT has been successfully employed by various countries to achieve increased collaboration while enabling greater access

Standardized content development: FVU has launched an interactive guide for developing online courses to enable development of quality content

Teacher Training: FVU promotes development of pedagogical training and has launched an online tool for assessing staff ICT skills.

Collaborative networks: There are many networks of academic disciplines which provide intra and inter discipline connectivity and collaboration (e.g. Mathematical Modeling Network)

FVU has been able to create a platform for collaboration to offer wider regional access to higher education with more efficient use of special facilities around the country. It has also enabled creation of a dynamic network of university students and members.

EdNA A collaborative platform for education and teaching community

Education Network Australia (EdNA) is the national initiative taken up by Australia to enhance collaboration among the educationand training community. EdNA online is the virtual network of different learning environments and provides a gateway to key educational resources and services.

It uses three models for service delivery:

Retail: It acts as a one stop shop for education resources

Aggregator: EdNA online acts as a metadata repository providing information about online resources on education.

Wholesale: Under this model, EdNA shares its metadata records with other related portals.

It has been recognized internationally as an innovative initiative which has shown benefits of community of networks approach and has emerged as a trusted resource base for higher education community in Australia.

Sources: Reviewing (Traces of) European Virtual Campuses Re Vica Website, Finnish Virtual University; Paper for Polish E-Learning Conference, E-Learning Key Australian initiatives," 2003

46

South Korea has been an Asian leader in adoption of information and communication technology in various aspects of business and education. It has used a well rounded policy of development of ICT infrastructure and applications for higher education. As early as 1987, it passed the Framework Act on Informatization Promotion which led to the creation of National Information Society Agency (NIA) to oversee construction of high speed networks. NIA later established the Korea Information Infrastructure (KII) initiative in 1994 to construct a nationwide optical fiber network. This was followed by key five year programs to continue modernization of Korean national network.

The government also promoted the use of internet (through South Korean agency for Digital Opportunity KADO) while ensuring internet security (through Korea Information Security Agency KISA and Korea Internet Safety Commission NIDA). By 1996, Korea had its comprehensive educational information service known as EDUNET. In 1999, Korea also saw the formation of Korea Education & Research Information Service (KERIS), a body to oversee technology initiatives in Korean education.

In 2002, Korea began focusing on promotion of e-learning in higher education institutions. The first step involved setting up ofestablishing university e-learning support centers along with an administrative support system. In the same year, KERIS launched

Overarching policy for development of ICT infrastructure and applications in South Korea

Successful implementation of ICT initiatives has been supported globally by country specific policy formulation and phased implementation

establishing university e-learning support centers along with an administrative support system. In the same year, KERIS launchedNational Education Resource Sharing System and National Digital Library Support System. By 2003, Korea formalized a plan to digitalize information in educational environments. This phase saw training of teachers, setting up of an administrative education system (ERP) and support centers for distance education. It also witnessed 100% connectivity of Korean Higher Education Institutions with Research Information Service System (RISS).

In an evaluation of impact of ICT usage in University operations conducted in 2007, a majority of the respondents were satisfiedwith its applications in management & administration, pedagogy and educational achievement.

Phased implementation of ICT strategy in vocational education in Australia

Split into three stages, Australian Flexible Learning Framework was launched in 2000 to utilize benefits of e-learning in Vocational Education. The framework is overseen by the Flexible Learning Advisory Group (FLAG), an advisory group consisting of senior government officials. FLAG also overlooks policy development in Adult and Community Education (ACE).

The First stage (2000-04) focused on capacity building (technology infrastructure and online content) by providing an enabling policy environment. The second stage (2005-07) focused on client engagement by strengthening their roles in shaping VET provisions and making them more market relevant. This phase also witnessed creation of VET learning object repositories and best practice knowledge sharing services. Third stage (2008-11) is focusing on integration of initiatives to enable embedding of e-learning among various stakeholders. It will develop processes for development of materials in areas with skill shortage while further strengthening the repository network. It will also develop mechanism for closer engagement of learners and industry.

The framework has led to creation of a national network for accessing e-learning resources enabling greater access to professional development opportunities and uptake of flexible learning.

Sources: Website of Korea Education & Research Information Service; The Information Technology & Innovation Foundation; Koreas e-learning experience in the Higher Education Sector, PPT Ministry of Education & Human Resource Development, Korea; Australian Flexible Learning Framework Strategy 2000-2004, 2005-

47

Recommendations for innovative use of ICT

Support development of high quality digital content

Promote development of digital content by providing incentives for creation of the same by institutes of repute both in the private and the public sectors.

Simultaneously develop a mechanism for quality assurance of digital