India to upgrade higher education

By Siddharth Srivastava NEW DELHI -

Stung by criticism that the lack of higher learning institutions is contributing to an acute shortage of skilled manpower, the Indian government has taken out its red marker and set out to correct its once-renowned education system. New Delhi is looking to start nine new Indian Institutes of Technologies (IITs) this year, to add to the existing seven. Eight new IITs, regarded as among the top schools in the world, are proposed for Rajasthan, Bihar, Andhra Pradesh, Himachal Pradesh, Orissa, Madhya Pradesh, Gujarat and Punjab provinces. Additionally, Benaras Hindu University will be converted into a full-fledged IIT. The IITs and the Indian Institutes of Management (IIMs), which are also to be expanded, are the two pedestals of the Indian education system, with alumni now employed as managers and engineers around the world. The IIMs and IITs function under a government charter and figure among lists of the world's 100 best management and technology institutes - in the same league with schools such as the Massachusetts Institute of Technology (MIT) and the University of California, Berkeley. The belated efforts of the government are welcome, but there will be no easy answers as India upgrades an education sector that is too small to meet the demands of its population, and continues to lag behind its booming economy. Even after the expansion, only a few thousand students will be selected for the IITs and IIMs from hundreds of thousands of applicants. For the undergraduate B-Tech and M-Tech programs offered through IIT-JEE (Joint Entrance Examination), for instance, around 350,000 students will compete for 5,000 seats. Similarly, for the blue-chip Indian Institute of Management (IIM), only 1,200 from a pool of about 250,000 applicants manage to procure seats each year. This makes the exam even more selective than all the top US business schools put together. In fact the overall acceptance rate at IIM ranges between 0.1% and 0.4% compared with the acceptance rate of around 5 to 10% in the top US schools. More than 90% of Indian students seeking admissions in the most desired IITs and IIMs are rejected due to capacity constraints, according to a 2008 report by the Associated Chambers of Commerce and Industry of India (ASSOCHAM). Forty percent of those who fail to qualify pay to study abroad, the report said. The group claimed about 450,000 Indian students are spending over US$13 billion on higher education abroad. "Over 150,000 students go overseas every year for university education, which costs India a massive foreign exchange outflow. This amount is sufficient to build many more IIMs and IITs," reported ASSOCHAM. "The trend can be reversed by opening a series of quality institutes with public-private partnership by completely deregulating higher education." Deregulation of government-controlled higher education could create annual revenues of $50-100 billion and provide 10-20 million additional jobs in the education field alone, the chamber said. It may also attract foreign students. Only 27,000 foreigners at present study in India, compared with 400,000 in Australia and 150,000 in Singapore. Implementation of a federal government blueprint for greater private and foreign participation in higher education has been stymied due to opposition by leftist parties and differences within the government. India allowed 100% foreign direct investment in education in 2001, but red tape and tough entry regulations have resulted in a poor progress. Top foreign institutes such as Harvard, Yale, MIT, Stanford, and the London School of Economics have not opened campuses in India. Instead, according to official figures, the US remains the most sought-after destination for Indian students, who form the largest proportion of international students in the US at more than 100,000. Critics say the government's plans for IIT/IIM expansion could dilute the institutions' highly regarded reputations. Ashok Misra, director of IIT Bombay, has been in favor of creating "quality under a different brand name and mandate. They can be as good or even better than IITs, but mixing a 50-year old [IIT] brand name with a new one does not make sense." Brand reputation and competition have been linked to opening India's higher education system to foreign universities, fostering competition and opportunity. Also, an increasing number of Indians who've studied abroad are now returning to India, drawn by the jobs and salaries offered by the galloping Indian economy. A global employment outlook report conducted by Manpower Inc says that India's net employment outlook for the July-September quarter 2008 is pegged at 45%, the highest in the world. Nearly 85% of IIT graduates have opted to stay back and pursue a career in India in the past five years, claims a recent study, "Changing Career Destination and Career Choices for IITians", by outsourcing firm Evalueserve. This "reverse flow" began in 2002, according to the study, with only 16% going abroad in the period until 2008. In contrast, between 1964 and 2001, 35% of IIT graduates preferred to work in the US. The Evalueserve study continues: " ... in the last five years the mindset has changed. Now, nearly 50% say India is where the action is." Even so, the growing Indian economy is grappling with severe manpower shortages. The talent crunch has forced employers to hand out 15% salary increases in the past fiscal year, much more than in the US (5.5%) and China (8%). An assessment by the human resources firm Hewitt Associates reports: "The growth in salaries is due to lack of talent in the market while companies are growing at a fast pace [30% to 35% in telecom, retail]. The supply is not keeping pace with the demand. There's a 10% to 15% shortage of talent across various levels." With luck, India's expansion of its top universities will produce more skilled manpower to meet the needs of its explosive economy.

Siddharth Srivastava is a New Delhi-based journalist.

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