Is Market Driven Educational Model (Encouraging Privatisation in Higher Education) Good for India’s Future?

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Is Market Driven Educational Model (Encouraging Privatisation in Higher Education)
Good for India’s Future?
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Abstract
This paper examines the need for encouraging market driven higher education higher education model in
India. In this context, the present study is focussed on privatisation in the Indian higher education wing, the
regulations of the government and the intricate issues underlying within the same. Hence, the present study
analysed the perceptions of educational pioneers in India and their views towards privatisation of higher
education in India.
Methods- The present study is a qualitative research conducted with former vice chancellors, former Higher
Education Minister, State of Karnataka and the administrators of private and public higher education
institutions.
Findings- The findings of the study revealed that a majority of respondents claimed privatisation to bring better
prospects as the country‘s Gross Enrolment Ratio (GER) needs to be improved. Majority of participants
belonging to public higher education institutions stated the significance of privatisation in the educational
sector.
Conclusions and Implications- Privatisation in Indian higher education should be encouraged; however, there
is a need to connect Indian universities with industries to mitigate job crisis which is prevalent with increased
human capital.

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Table of Contents
Abstract......................................................................................................................................2
List of Table...............................................................................................................................6
List of Figures............................................................................................................................6
CHAPTER I: INTRODUCTION...............................................................................................8
1.0 Background.................................................................................................................................8
1.2 Research Objectives ................................................................................................................15
1.3 Research Questions .................................................................................................................15
1.4 Scope of the study....................................................................................................................15
1.5 Chapter scheme........................................................................................................................16
CHAPTER II: LITERATURE REVIEW ................................................................................17
2.0 Encouraging privatisation in Indian Higher education.......................................................17
2.1 Defining the terms ...................................................................................................................18
2.2 Relationship between Liberalisation, Privatisation and Globalisation.............................22
2.3 Privatisation in the educational sector ..................................................................................23
2.4 Privatisation of higher education in Global context............................................................26
2.5 Privatisation in the Indian educational sector ......................................................................29

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2.6 Indian government policies on privatisation of Higher education ....................................36
2.7 Issues in Privatisation of higher education in India ............................................................41
2.8 Need for Privatisation in higher education...........................................................................42
2.9 Political economy of higher education in India...................................................................44
2.10 Previous studies .....................................................................................................................47
2.11 Research Gap .........................................................................................................................49
CHAPTER III: RESEARCH METHODOLOGY ...................................................................50
3.0 Introduction ..............................................................................................................................50
3.1 Research design .......................................................................................................................51
3.2 Research philosophy ...............................................................................................................52
3.3 Research Approach..................................................................................................................52
3.4 Target population and sample size ........................................................................................53
3.4.1 Sampling technique .................................................................................................55
3.5 Data collection .........................................................................................................................55
3.5.1 Data collection methods ..........................................................................................55
3.5.2 Interviews in educational research ..........................................................................55
3.5.3 Procedures for preparing for the interviews ............................................................56

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3.5.4 Validity and reliability in interviews.......................................................................57
3.6 Analysis of the interview........................................................................................................58
3.7 Summary...................................................................................................................................58
CHAPTER IV: RESULTS.......................................................................................................59
4.0 Introduction ..............................................................................................................................59
4.1 Participants ...............................................................................................................................59
4.2 Role of privatisation in higher education development in India .......................................63
4.3 Perceptions of stakeholders towards choosing higher education institutions..................66
4.4 Views of Indian Government on privatisation.....................................................................69
4.5 Encouraging privatisation in India ........................................................................................71
4.6 Private Universities and high standards of higher education in India ..............................74
4.7 Role of privatisation in maintaining equity and accessibility............................................77
CHAPTER V: DISCUSSION AND CONCLUSION .............................................................80
5.0 Role of privatisation towards satiating the ever-growing need for higher education in India 80
5.1 Effects of privatisation in Indian higher education .............................................................85
5.2 Governmental regulations and privatisation ........................................................................86
5.3 Governmental regulations and privatisation ........................................................................88

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5.4 Implications..............................................................................................................................89
5.5 Conclusions ..............................................................................................................................91
REFERENCES ........................................................................................................................93
Appendix................................................................................................................................113
List of Table
Table 1: Semi-structured interviews conducted with vice-chancellors and XXX of private institutions 54
List of Figures
Figure 1: World higher education enrolment rate....................................................................10
Figure 2: Private Enrollment and Institutional Share in Higher Education in Selected Asian Economies, 2002–
2009..........................................................................................................................................28
Figure 3: Total number of Private aided, unaided and government higher education institutions in India (State-
wise).........................................................................................................................................31
Figure 4: Total number of Private aided, private unaided and government higher education institutions in India
(total)........................................................................................................................................33
Figure 5: Procedure to establish a private university...............................................................39

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Figure 6: Participants in the study ...........................................................................................62
Figure 7: Word cloud of Role of privatisation in higher education development in India......64
Figure 8: Word cloud of Perceptions of stakeholders towards choosing higher education institutions 67
Figure 9: Word cloud of Views of Indian Government on privatisation.................................70
Figure 10: Word Cloud of Encouraging privatisation in India................................................72
Figure 11: Word Cloud of Private Universities and high standards of higher education in India 75
Figure 12: Word Cloud of Role of privatisation in maintaining equity and accessibility .......78
Figure 13: Estimated 18-23 year old population in India- 2030..............................................81

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CHAPTER I: INTRODUCTION
1.0 Background
The purpose of higher education in all developed and developing economies is very simple- to deliver
professional education which equips students the knowledge of practicality to succeed in their life. Success in
this context relates to achieving a considerable role at work, at communities and so on. To satiate the ever
increasing need for education and knowledge empowerment, educational institutions all around the world
evolve continuously. In a global context, higher education is under constant pressure with the following
requirements- to meet the expectations of education, increase student enrolment, increase workforce needs of
the nation which in turn affects economic development positively (Educause, 2010). To meet the needs of
higher education, developed and developing countries have begun embracing the concept of ‗Privatisation‘.
Privatisation is defined as the initiation of private ownership with the authoritative power and management
power resting within the control of private individuals. The control in privatisation is in terms of administration
of money and decision making. In education, privatisation is considered as the expansion of private control over
public good ‗education‘ (Jonaki & Prasenjit, 2016).
Though it is claimed that privatisation has its role in higher education all over the world, factors such as
globalisation and liberalisation have combined effects on higher education (Vlk, 2006). Over the past decades,
private higher education in the world has witnessed remarkable progress with more than 30 per cent of private
enrolment globally. By the year 2012, the number of student enrolment in higher education institutions reached
196 million whereas the same in the year 2000 was just below 100 million (Kassim et al., 2015). Private

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education has been in existence in many countries for years and is the traditional mode of higher education in
many Asian countries such as Korea, Japan and Philippines. Many private higher education institutions in the
world are basically ‗on quasi for-profit‘ or ‗for-profit institutions‘. Countries such as Japan, Indonesia and the
Republic of Korea witness 70% private enrolment and almost half the student population in nations such as
Brazil, Mexico, and Chile are educated under private higher education institutions (UNESCO, 2014). The
impact of private sector could also be envisioned in the eastern European as well as the African countries.
Developing economies such as India and China are no longer an exception and embrace private sector higher
education. Researchers argue that privatisation in the higher education sector is the cause of neo-liberal policies,
the limited funding of National Governments for higher education, the increasing costs and the economic
requirements of nations which include increasing technologically and practically empowered workforce (Rena,
2010).

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Figure 1: World higher education enrolment rate
Source: Adopted from UNESCO (2016)
The expansion of higher education in India is in a rapid pace and the increase in progress of higher
education institutions in India discerns the growing knowledge requirements of student population in the
country. Private sector plays a predominant role in delivering knowledge to the youth population in the country.
A dire need for professional education always exists in the country and the participation of private sector is
deemed to be more important. Privatisation in the Indian higher education sector has emerged in several types
and forms over the years (Tilak & Varghese, 1983a). Privatisation takes place in the following forms-
0
50
100
150
200
250
2000 2002 2004 2006 2008 2010 2012
Higher education student enrolment rate
Number of students (in
millions)

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introduction of self-financing courses in public higher education institutions, transformation of a public higher
education institution in to private institutions, and private institutions with and without recognition. Institutions
which operate for the purpose of profit are termed commercial private higher education institutions. Private
individuals play ownership role in setting up private universities, deemed universities and foreign collaboration
universities (Jonaki & Prasenjit, 2016). The economic reforms which were implemented in the year 1991, led
the nation to adopt several changes. Open markets and liberal environments led to the emergence of private
higher education institutions in the nation. In the year 1995, legislations were introduced for setting up private
universities in India but the act is yet to be implemented. Lack of proper legislations for private universities
eased state governments of the nation to set up private universities. According to the University Grants
Commission (UGC), by the end of 2015, there were 43 central universities, 312 state universities, 115 deemed
universities and 183 private universities in the country (Dhanuraj & Kumar, 2015).
The increase number of enrolment in private sector higher education institutions and the number of
private institutions in India increasing every year positively define the success of privatisation in the higher
education sector. Education in this regard is considered to be a tool to establish individual status in the
community; hence the need for higher education is increasing in India. With better quality of higher education
delivered through privatisation, developing countries are positively regulated to benefit from knowledge based
economic developments (World Bank, 2000).
Several challenges necessitated the need for privatisation in the higher education sector of India. Firstly,
the population of students (age group: 15-35 years) in the nation in the year 2010 was around 350 million and
Altbach and Jayaram (2010) predicted that the numbers will peak at 485 million in 2030. The previous

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researchers argue that the Government will tremble to meet the needs of higher education only with public
sector institutions and meeting quality education needs for such huge numbers is a complicated task. Secondly,
there occurs an unequal balance in the number of urban and rural higher education enrolment in the country.
Ernst and Young (2009) report states that the Gross Enrolment Ratio (GER) in urban regions of the country is
around 24 per cent whereas the same in the rural counterparts is 7.5 per cent. Thirdly, the quality of education
delivered by public institutions is so poor which is attributed to reasons such as lack of infrastructure, out-dated
curriculum, less research innovations and practical empowerment. Lack of skilled workforce emerging from
public institutions demotivates organisations to employ such candidates. However, only a few public higher
education institutions such as Indian Institutes of Technology (IITs) and Indian Institutes of Management (IIMs)
satisfy the needs of corporate organisations by delivering quality manpower resources (Sudarshan &
Subramanian, 2012). Indian government (both state and central) suffer from serious monetary allocations to
fund higher education which could be balanced through private sector. The enrolment of students in higher
education institutions in India has grown phenomenally wherein the number of enrolment is 25.9 million in
2011-12 and the same in the year 1970-71 was 2 million (Ernst & Young, 2012).
In the same context, Patel (2012) elucidates the advantages of privatisation in Indian higher education.
The previous researcher claims five advantages of privatisation in Indian higher education which are as follows:
1. Resource allocation- The resources allocated by the state and central government to public higher
education institutions does not facilitate the proper management of these institutions. On the
contrary, private owners may fund considerable amount to maintain private institutions.

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2. Sensitivity- Private sector institutions adopt changes flexibly whereas the same is not possible in
public sector institutions.
3. Quality- Better quality of education is provided in private sector institutions rather than public sector
institutions.
4. Accessibility- With more number of educational institutions, private sector serves to cater the
educational needs of all citizens in India.
5. Reduced burden- Governments may concentrate allocating resources to other sectors (Patel, 2012).
Though it is claimed that privatisation has its role in higher education all over the world, factors such as
globalisation and liberalisation have combined effects on higher education (Vlk, 2006). Globalisation has
impacts on the higher education system of India. The reforms of education in India, especially with the liberal
motives of the Government to allow private participation in the higher education sector underline the perception
of the government to enhance the utilisation of information technology resources thereby emphasising the
economic productivity of the country through quality workforce. Indian higher education is lacking autonomy,
funds and suffers from the burden of affiliation. On the contrary, globalisation will bring development in
education through technology, communication and knowledge. Due to privatisation, the quality of education
delivered becomes industry oriented and the increase in globally acknowledged higher education institutions
transforms India into a knowledge hub (Naik, 2015).
Though privatisation in Indian higher education is a boon, many researchers claim that the advent of
private sector in education sector tends to be hazardous as the equity to educational access is affected. A study
by Chougle (2014) on understanding the perceptions of college teachers towards privatisation in Indian higher

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education revealed several weaknesses. The perceptions were ranked wherein the cost of private higher
education acquired the first rank. With the increased cost for higher education services by private sector, the
economically weaker sections may suffer. Other factors in the raking include fear of unethical practices or no
ethics, commercialisation of education and lack of social commitment (Chougle, 2014).
There are contradictory ideas regarding the feasibility of private sector participation in the Indian higher
education sector. Though different researchers claim the devastating role of privatisation in the sector, the
economy of the country necessitates such participation. The ideologies on equity and accessibility are
questioned since privatisation has both positive and negative effects on the factors. While private sector
institutions aid in meeting the ever-growing demand for higher education in a highly student populous nation,
the cost of acquiring private higher education is not within the reach of poor economic class who form a
predominant part of the population in the country. However, the Government lacks allocation of funds to public
institutions to create opportunities for youngsters to pursue higher education as feeble resources are allocated
for higher education purposes of the country. These inferences act as the premise to the present study which is
based on the analysis of private participation in Indian higher education sector. Privatisation poses both
advantages and disadvantages; however analysing the same leads to a clear understanding of the impacts of
privatisation in the higher education sector. Hence, the present study analyses whether the market driven
approach of Indian higher education is advantageous for the future of the nation.

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1.2 Research Objectives
1. To determine the effects of privatisation in Indian higher education
2. To examine the role of privatisation towards satiating the ever-growing need for higher education in
India
3. To analyse and interpret the perceptions of educational pioneers towards the market driven higher
education market.
1.3 Research Questions
1) What are the effects of privatisation in Indian higher education?
2) Does privatisation in Indian higher education satiate the ever-growing needs of student population in the
country?
3) How do educational pioneers in India view privatisation of higher education?
1.4 Scope of the study
The scope of the present study is bound within the limits of examining the effects of privatisation and
market driven model in Indian higher education. Hence, the present study focuses on the regulations regarding
privatisation in different states of the country wherein the laws are varying for each state in the nation.

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1.5 Chapter scheme
The first chapter covers the introduction of the study wherein the background of the study, the research
objectives and the scope are elucidated.
The second chapter is the literature review in which the knowledge which is previously discussed
relevant to the present topic of the research will be identified and analysed. The chapter further elucidates the
findings of various researchers who devised researches similar to the context of the present study.
The third chapter covers the research methodology. The different methods of data collection, and the
analysis techniques used will be elucidated following which the type of research methodology used in the
present study will be explained
The fourth chapter will cover the results. Different techniques are used to analyse the variables of the
study. The results of the study will be analysed, examined and summarised.
The final chapter will be discussions and conclusions. The findings of the study will be discussed
elaborately and the conclusions will be stated. Additionally, future studies in the same context will be
recommended.

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CHAPTER II: LITERATURE REVIEW
2.0 Encouraging privatisation in Indian Higher education
The present chapter of the dissertation is dedicated to understanding the different literatures on the
subject of privatisation of higher education and India since its independence in 1945. Ever since India attained
the status as a ‗republic nation‘, education in the country is based on the principles of empowering the citizens
of the nation and the responsibility of the state is to create an environment which enables all its citizens to be
empowered. In this regard, the Government of India adopts strategies to maintain the growing population and
increasing rate of youth through the creation of capacities. Over the years of development in the Indian
educational sector, the Government is enlarging its capacities by investing more on enhancing the existing
institutions. During the year 1950-51, there were around 28 universities and 578 colleges in the entire country
while the scenario of today is widened. India is now the hub for a number of educational institutions, especially
institutions satiating higher education needs. In 2014, there were a total of 36,812 colleges (20,390 colleges
private institutions and 6,768 public colleges) in the country which transforms India as the knowledge spot for
more than 20 million students enrolled in these institutions (Shankar, 2016). However over the last two decades,
the need for skilled labour and practical expertise is increasing wherein companies demand for expertise,
education and skilled manpower. In order to meet the growing needs for manpower in an ever-evolving
economy, privatisation aids with complementing the public educational institutions. Over the past decades, the
factor called ‗capacity creation‘ is steered with the aid of private institutions. The emergence of higher
education in India began in the mid-1980s which is to subsidise the investment reduction of the Government
and the states towards education. The share of the private unaided institutes is 43 per cent in 2001 and the

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percentage of students is 33 per cent. However, the percentage rose and in the year 2006, the percentage share
of private institutions was 64 and the percentage of students rose up to 52 per cent (Sudarshan & Subramanian,
2012).
Privatisation has always been a hot topic of debate and the country has been witnessing resistance.
Though in the beginning when privatisation is a part of the economic liberalisation scheme, the nation was
dormant; however, much resistance arose when the intricacies in privatisation were found (Kapur & Ramamurti,
2002). However, previous researchers also argue the benefits of privatisation of Higher education in India
wherein previous studies and reports claim privatisation in other developed and developed countries to be a
great success. Feith (2012) projected the market for international higher education and claims that the demand
for higher education will surpass China. The previous researcher argues that market driven policies can only
meet the increasing demands of higher education in India. Hence, the present section intends to analyse the
present status of privatization in a broad context envisioning the role of privatisation all over the world and its
impact in the educational system. Further narrowing the topic towards the impact of privatisation in educational
system of India, previous literatures pertaining to the context of the present study will be reviewed and
analysed.
2.1 Defining the terms
Privatisation
Privatisation is the fundamental part of the public reforms and is the core theme towards enhancing the
efforts of the private sector. For most countries in the world, privatisation is the key to development in all

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aspects; however, the objectives of the countries differ based on the capabilities and the need for privatisation in
these companies. Though the privatisation objectives of each country differ based on the needs and capability,
depending on the development and the social goals of the country, the following factors are considered and the
private sector should operate to serve the cause: improve efficiency, improve customer/ consumer choice,
increased competition, mitigation of public debts and budget deficits, and extending the share ownership in the
private sector. However, all these factors on the whole should aid with enhancing the productivity and
efficiency of a nation, thereby acting as the growth engine of a nation‘s economy (Ddumba-Ssentamu &
Mugume, 2001).
Furthermore, Privatisation is also defined as the process of increasing the productivity and efficiency of
the private sector thereby fostering the development of the private sector (Naya, 1990). However, in simple
economic terms, privatisation is the transfer of the activities of the state to the private sector which occurs in
partial or whole, or by the sales of assets which is followed by liquidation (Ddumba-Ssentamu & Mugume,
2001). In terms of higher education in India, privatisation is the only feasible way to increase the Gross
enrolment ratio (GER) of students in higher education wherein a minimum of 30 per cent GER could be
achieved with the establishment of additional 800 universities and 40000 private colleges within 2020 (Gupta &
Gupt, 2012). Hence, privatisation especially in higher education in Indian is seen to provide better
accountability and quality of educational experience for the students therefore these institutions are more sought
after for admission by students than government run institutions

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Liberalisation and privatisation
Liberalisation is defined as the transformation of market structures which is facilitated by the responses
of companies and new entrants into open/ free market. In a liberal economy, the shares of the market transform
are liable to change rapidly, and the competitive scenarios between small and large scale firms determine the
growth of this market, whether the concentration will be more or less (Kambhampati & Kattuman, 2003). Over
three decades, developed and developing economies have been witnessing privatisation of public sector
services. The recommendations of the International Monetary Fund (IMF) and the World Bank are towards the
privatisation of public owned enterprises which is a suggestion to increase revenue, enhance the health of public
finance, increase the productivity and efficiency, thereby reducing the intervention of government (Megginson
& Netter, 2001). Among the different aims of privatisation of public enterprises and services (Villalonga, 2000;
Sheshinski, 2003), the predominant goal of privatisation is to increase the efficiency and productivity of the
economy (Kilicaslan et al., 2008).
Globalisation
The process of Globalisation is still in stages of integrating the nations all across the globe and is related
with the concepts of privatisation. Following several changes in the pace of technological developments,
economic liberalisation, and the importance of international laws, national economies are evolving continuously
and globalisation has delivered these countries into a state of competition which is very different before
liberalisation in developed and developing economies. The term ‗Globalisation‘ is not a sudden trend in the
global market. It is the sustainment of developmental activities in the economies of different nations and is still

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in its developmental stages. Liberalisation of economic activities in a country differs from one another with
economic agents which are connected on marginal basis and are resistive towards failure in the neighbourhood
nations. Immediately after the post-World war-II period, the rapid growth in the developments of foreign trade
is embraced by developed nation in the 1950s and 1960s; however, Foreign Direct Investments (FDI) in
developing economies paved way for globalisation. Over the past two decades, trade and economic
liberalisation improved the economies in the world, thereby integrating the world into a highly integrated
system. Following are the three predominant features of globalisation steering the integration of global
economies.
i) Product internationalisation with changes in the production structure
ii) International trade expansion
iii) Expansion of international capital flows (Mrak, 2000).
The Article 25 of the Companies Registration Act defines the establishment of educational institutions in
India which can only be set up by trusts and charitable organisations. However, the act lacks clarity about
foreign universities setting up in India. The government of India is adopting liberalisation policies to allow
foreign investors establishing private educational institutions in the nation (Amandeep, 2016). Similar to the
studies by Kilicaslan et al., (2008) and Megginson & Netter, (2001), the government of India attempts to
liberalise its policies on foreign investment and privatisation in order to improve the economy.

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2.2 Relationship between Liberalisation, Privatisation and Globalisation
There is specifically a relationship existing between the three factors: Liberalisation, Privatisation and
Globalisation (LPG). Boubakri et al. (2011) argues that there exists a relationship between liberalisation and
globalisation, and privatisation. The researcher argues that privatisation has profound effects on globalisation as
increasing the participation of private sector in foreign investments thereby promoting capital inflow,
technology and management skills of the company. Since globalisation turns the market environment more
competitive, the GDP growth is also enhanced. In the same context, Goyal (2006) investigated the role of
globalisation on developing countries with special reference to India. Over the years, the integration of societies
and economies has been a debatable topic. Developing economies like China and India witnessed tremendous
growth after adopting the model of Liberalisation, Privatisation and Globalisation and the rate of poverty in
these nations declined steadily (LPG). However, globalisation has been controversial since a number of
oppositions internationally were generated based on inequality and degradation of environment. This
necessitated the study of impacts of globalisation in developing nations from the perspectives of FDI. After the
foreign exchange crunch which dragged the economy to loan defaults, India opened up its market in the early
1990s. As a response to the economic liberalisation, a number of foreign investment companies established their
businesses in the nation. The policy changes invoked a more open market economy. Goyal (2006) further
argues that the Government of India should analyse the best opportunities within the globalisation and
privatisation schemes since the target of the world is towards developing countries such as India and China. The
US and the countries of Europe are defined economies, hence economic experts argue that India and China may
overtake the US and European countries thereby becoming a major economic power in the forthcoming decade

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(Goyal, 2006). The technological revolution which is coupled with the processes of liberalization, privatization
and globalization (LPG) has transformed knowledge as the key basis for nations to compete in the global
environment. The emergence of the knowledge based society has further accomplished several economic
benefits of developed and developing countries for which researchers claim the reason to be the LPG model.
Education and globalisation are mutually dependent terms. Globalisation is the process of imparting efficiency
and competitiveness and in the educational sector, it means transforming knowledge into an ‗accessible to all‘
resource (Rani, 2010) . Ray (2015) states that with the new policy reforms associated with the liberalisation,
privatisation and globalisation schemes, the science and technology wing of India has witness rapid growth,
enabling increased enrolment in higher education thereby increasing the knowledge base for IT and skilled
labour force.
According to Gautam et al. (2015), the LPG model has influenced almost all the sectors in India and the
higher education wing is no longer an exception. The Government of India claims privatisation as the most
feasible mode to satiate the growing need for higher education in India. This will be reflected in the following
sections wherein the role of privatisation in educational sector both in developed and developing countries are
elucidated following which the context of LPG in Indian higher education is expatiated.
2.3 Privatisation in the educational sector
In broad terms, privatisation in the educational sector is referred to as the policies which promote
liberalisation and deregulation thereby establishing a market in education or creation of a competitive

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environment between private and public education providers (Lubienski, 2006). Different countries identify
privatisation to increase the efficiency of the educational system in two ways.
i. Delivering education to the inaccessible communities
ii. Improving the quality of education thereby nurturing competition
Though the governing bodies of countries view education as a public good to the population,
privatisation of the education sector enables the equilibrium between the education provider and the choice of
the consumer. In a private institution, the type of product offered and the fee for these products are fixed by the
private education providers. In a privatised educational setup, the consumers of the education as good (parents
and students) will possess the option to decide the type of education and the charge that they wish to spend.
Instead of standardising education through free state education, private owners feel the need to satisfy the
educational needs of the consumers. Additionally, the profit motives are set by these private education
providers. An implication of privatisation is that there will be a remarkable growth in the generation of quality
assurance and national assessment systems which seek to enhance the information quality thereby creating
better choices for consumers (Benveniste, 2002).
Privatisation in the educational sector is unfolded in three ways. The three ways are:
i. Outsourcing state specific activities and operations to private education providers.
ii. The introduction of self-regulatory and market-based regulations which forms the deregulation of the
education sector

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iii. Provisions for educational institutions which are either funded by the state with the regulations of the
public or independently.
All the aforementioned approaches could be considered either simultaneously or balancing each other or
may even on one of the three modes. Some approaches are independent; however some complement each other.
For instance, the emergence of more private educational institutions and at the same time these institutions
offering more choices for enrolment in these institutions. In developed countries, privatisation of education
sector is encouraged for the growth of education in these countries. These countries offer vouchers to encourage
student enrolment in private institutions, and tax credits to parents (Belfield & Levin, 2002). However, this is
not feasible as in the case of developing countries wherein there will be no possibility for the Government to
fund and encourage private education which limits the philanthropic scope of privatisation in developing
countries (Pedró et al., 2015).
The Global education 20/20 report (Economist Intelligence Unit, 2009) claims the role of private sector
in education. In this regard, 211 respondents were surveyed wherein 123 respondents belonged to the private
sector companies and 88 from educational sector. The survey was conducted by Economist Intelligence Unit in
February 2009 which discerned the role played by the private sector and analysed whether the same regulates
positively or negatively the traditional education. The survey covered questions regarding the importance of
privatisation in the educational sector wherein 70 per cent of the respondents revealed such privatisation to be
important. However, the role of the private sector varies from country to country. The survey further revealed
the success of voucher-system wherein the system increases the performance of the schools (The Economist,
2007). In Sweden, higher education for students belonging to the EU nations and Switzerland is provided free

26
of cost which is facilitated by tax revenue (Swedish Institute, 2013). In Portugal, the United States and Japan,
private institutions are funded by the state and mostly serve as not-for profit organisations. In Japan, around 77
per cent enrolled in private institutions delivering higher education (Varghese, 2012). However, not all
countries allow the privatisation of educational sector, and not all corporations aspire to do so. The report
further reveals the emergence of private corporations taking care of the education sector all around the world.
Based on the results of the survey, it is deemed that privatisation in the education sector is important since the
idea of the respondents is privatisation brings better education (Economist Intelligence Unit, 2009).
2.4 Privatisation of higher education in Global context
A shining example of a well-established system of higher education that is both qualitative, diversified
and available to all sections of society is the one prevailing in the U.S. The private sector is a major contributor
to the system at various levels. But the private sector's role is generally limited management and philanthropy.
Though there is great diversity among universities and colleges, the fees of students constitute lesser than 50%
of the total capital budget and operating costs. Donations, royalties, research grants, licensing, and auxiliary
services account for the remaining (Sunder, 2010).
Many nations (for instance, the United States) have a chequered past of development of the private
sector. In most of the other nations (for instance, Latin American nations), the private sector came on the scene
more than five decades ago but significant growth was achieved during the very end of the 20th century. In
various regions of the world (for instance, African and post-communist European nations), the private education
sector is relatively new. Proprietary institutions, for-profit and non-profit organisations comprise the private

27
sector. Institutions that are proprietary —characterised by profit-seeking behaviour and driven by the market
driven, with centralized and business like management systems, in addition to a weak academic culture—can be
defined as the pure form of privatization (Holzhacker et al., 2009). In the United States there have been many
private, not for profit higher education institutions for many years like Stanford University, Massachusetts
Institute of Technology etc. On the other hand, the University of Phoenix in the U.S. is private and for profit.
There are many private providers in the UK higher education which function on a not for profit basis (Shankar,
2016).
The share of higher education in the entire world accounts to 31 per cent with the highest share of 35 per
cent of students enrolled in the private higher education institutions of Asia and the pacific. About 50 per cent
of the institutions in most of the regions of Asia and the pacific belong to the private sector. When compared
with the number of enrolment in the public institutions, the growth of enrolments in the private education sector
is phenomenal. Countries all across Asia enacted regulations and policies to manage private higher education
institutions; however the issues based on quality of education, the equitability towards education access and the
affordability of students towards paying for private institutions are challenging for developing countries (Asian
Development Bank, 2012).
Three stages of private sector emergence into the educational sector are elucidated by Geiger (1986).
The three stages are peripheral private, parallel public and private education sectors and the extensive private
higher education sector. In the peripheral private stage, a country‘s public higher education sector will dominate
and the role of private higher education institutions will be peripheral. Developing countries normally adopt the
peripheral private model where the countries are deeply rooted in socialistic principles. Developing countries

28
such as Viet Nam and the Central Asian republics fall into this category. Secondly, the parallel public and
private higher education sectors are a reflection of higher education institutions operating in parallel. The
examples of countries adopting such system are Hong Kong, China, Malaysia, and Thailand (Chealy, 2006).
Thirdly, the extensive private higher education sector is the combination of more number of private educational
institutions and the high degree of enrolment in private higher education institutions. The Republic of Korea
and Japan are the leading countries with high share of private higher education enrolment in the East Asia (more
than 77 per cent of enrolment shares and 90 per cent of institutional shares), following which Indonesia and
Philippines with 70.9 per cent and 60.9 per cent shares in private higher education enrolment and 97.3% and
72.2% shares in private institutional number respectively (Asian Development Bank, 2012).
Figure 2: Private Enrollment and Institutional Share in Higher Education in Selected Asian Economies,
2002–2009
0
20
40
60
80
100
120
Percentage
Private percentage of total higher education enrollment
Private percentage of total Higher education institutions
0.0
0.0

29
Source: Adopted from Asian Development Bank (2012)
From Figure 1, it is evident that the number of private educational institutions and the share of private
higher education enrolment in India are somewhat not in line with the developments of other countries. Though
India is the second populous country, the number of enrolments is lower than the other Asian nations such as
China, Phillipines and Korea. However, the Gross Enrolment Ratio (GER) for higher education (in general to
both public and private sector institutions) has doubled over the decade wherein the GER is 9 per cent in the
year 2002-03 and the same is 24 per cent in 2013-14. Shankar (2016) relates such enrolment to be associated
with the emergence of private higher education institutions which remarkably increased the higher education
enrolment rate of students.
2.5 Privatisation in the Indian educational sector
Despite the fact that many nations including the United States view private sector as philanthropic, the
same cannot be stated in the context of India. In sharp contrast to the definition, genuine not-for-profit colleges
or educational institutions in India obtain nearly 100% of their total income from fees collected from students,
since income from other avenues is less. Whereas in educational institutions/colleges that are set up as for-
profit; either by overt admission or discreet actions; the total fees collected from students is enough to cater to
all the overheads and also generate a return on investment. Since very little benefits are available for innovation,
research, and doctoral education, the financial model comes in the way of improving the quality of education
that has been provided by institutions comprising a major part of the increase in admissions (Sunder, 2010).

30
In terms of number of students, the Indian ranking in higher education system is number three, behind
China and the United States. However, the advantage in India is that English has primacy as the main language
for higher education and research. Comparatively 11 per cent of India youth complete higher education against
20 per cent in China. The important governing body with overall regulatory control of universities is the
University Grants Commission (India), which ensures compliance of standards, acts as an advisor to the
government, and liaises between the centre and states. Higher learning in India is accomplished through
Universities and constituent colleges. As on 2011, around 227 Universities are available in India that is
recognised by the Government which includes 11 Open universities, 109 deemed Universities, 20 Central
varsities and 87 state universities. A majority of the varsities in India have colleges affiliated to them where
undergraduate courses are conducted (Singh, 2009).

31
Figure 3: Total number of Private aided, unaided and government higher education institutions in India
(State-wise)
0 5000 10000 15000 20000 25000 30000 35000
Andaman & Nicobar Islands
Arunachal Pradesh
Bihar
Chhatisgarh
Daman & Diu
Goa
Haryana
Jammu and Kashmir
Karnataka
Madhya Pradesh
Manipur
Mizoram
Odisha
Punjab
Sikkim
Telangana
Uttar Pradesh
West Bengal
total government
total private private aided

32
Source: Adopted from Ministry of Human Resource Development (2015)
Elementary and secondary education is imparted in schools in India, while the third level i.e. higher
education is provided in colleges and universities. The education sector has two types of providers - private and
public. Private institutions are classified into two types - aided (partly bankrolled by the government) or unaided
(self-funded). Public institutions are setup, bankrolled and entirely managed by the concerned department of the
government. Whenever the government's efforts to impart education in a manner so as to be accessible to all,
falls short of the planned target, the private sector steps in to fill the gaps. The generally accepted norms is that
motivation for the private sector is profit, however, when the private sector is involved in education, profit
should not be the driving force. Experts opine that particular private sector players in the education sector lower
the standards of education as they do not adhere to the laid down norms, and preclude certain categories of
students due to the inexorbitant fee structure. But, the contrary view held by few experts is that private sector
involvement is a necessity to improve quality with added investment, to encourage competition in higher
education (Shankar, 2016).

33
Figure 4: Total number of Private aided, private unaided and government higher education institutions
in India (total)
Source: Adopted from Ministry of Human Resource Development (2015)
Despite the progress made in education after decades of independence, higher education in India
requires to perform better in the crucial areas of Access, Equity and Quality. Sudarshan & Subramanian, (2012)
are of the view that imparting qualitative, higher education that matches global standards at a reasonable cost is
one of the most important issues before the nation. They further state that if India does not take appropriate
steps on a war footing, then the situation would turn grim wherein a large number of youngsters would be
looking for higher education and the system will be unable to accommodate all of them. People in the age group
Indian Higher education colleges
Private Un-Aided
Private aided
Government

34
of 15-35 years estimated in the year 2010 to be more than 350 million, is projected to peak at around 485
million in 2030 (Altbach & Jayaram, 2010). To complicate matters further, the higher education Gross
Enrolment Rations (GERs) shows disparity among states, urban areas, rural areas, gender and communities. As
per statistics of Ernst and Young (2009), urban areas have a GER of 23.8 per cent whereas in rural areas it is a
dismal 7.5 per cent. Delhi has a GER of 31.9 per cent while Assam is at the bottom rung with 8.3 per cent. The
rich–poor and the rural–urban gap witnessed in India has serious detrimental effects. The best way to narrow the
gap would have been to utilise education to bridge the divide. But, as can be witnessed from the statistics, the
disparities are pronounced when it comes to uniform access to education to all, which only ends up highlighting
the divisions seen in society. The main reasons for the sorry state of affairs is an outdated curriculum, undue
emphasis on theory, diluted focus on research and social sciences, indifferent attitude towards innovation, low
morale and lack of motivation among teachers and researchers and the lack of a proper monitoring and
regulatory mechanism. Therefore, when the National Association of Software and Service Companies, (2005)
tabled the facts that only 25 per cent technical and 10 per cent non-technical graduates were of employable
standards, it was not far from the truth. One more fact in support of this report was the practice in most
companies that recruited fresh graduates, trained them to bridge the gap between the requirements of the
industry and the actual output passing out of educational institutions. This was done at heavy cost to the
industry, pointing to the disconnect between education industry standards.
It is not feasible for the government to cater to all the higher educational requirements of India. This
could be because the allocated public expenditure on higher education as a percentage of Gross Domestic
Product (GDP) is a mere 0.6 per cent (Ernst & Young, 2009a); this is quite lower than what developed nations
like the United States (US), the United Kingdom (UK) and China allocate on a per-student basis. In order to

35
fulfil the demanding needs of a dynamic economy, private entities have established institutions to supplement
public educational institutions that are beset with problems of meeting capacity. Professional or higher
educational courses like engineering and Master of Business Administration (MBA) has attracted a lot of
privatisation efforts, constituting a majority of the total courses on offer. The courses and institutes of private
sector in pharmacy and engineering are a staggering 90 percent of the total institutes and courses. The data is
ample proof that private enterprise in education is now a vital part of the education scenario which cannot be
reversed. Critics who hold the view that education is a social necessity best handled solely by the Government
will be unable to offer a solution to the challenges faced by higher education, in the context of the scale and
complex nature, which cannot be handled by the government alone with the resources at disposal(Sudarshan &
Subramanian, 2012).
Reformist policies of Liberalization, Privatization and Globalization (ins short - LPG) ushered in
sweeping changes resulting in the emergence of India as a powerhouse of educated manpower with more than
thirty thousand institutions imparting education to around twenty million enrolled students (Gautam et al.,
2015). Since then, the government has attempted investments to increase capacity and to improve the existing
infrastructure. The time has come to credit the private sector with the supporting and at times leading role
played in the phenomenal success in higher education in India, since a vast majority of students are presently
undergoing courses in private institutions.
With the Government of India, UGC and AICTE welcoming private enterprise in the education domain,
high and sustained growth can be predicted. The government needs to encourage privatization of higher
education by concentrating on the qualitative aspect of colleges. Visible changes are observed in higher

36
education in India, and the perception of private sector participation has changed from one of suspicion to an
accepted and appreciated facet. The Program of Action, 1992 and the National Policy of Education (NPE), 1986
are policies that control higher education in its present form. The National Policy of higher education in India
was framed on the basis of the Radhakrishnan Commission Report (1948‐1949) and the Kothari Commission
Report (1964‐1966) (Partima & Singh, 2014).
2.6 Indian government policies on privatisation of Higher education
The augmentation of higher education has been viewed sceptically and the rationale has been
questioned, viewed in the context of related academic and social costs. However, the government is refusing to
budge from its earlier assurance, considered as the fulfilment of nationalist ideals and as an intrinsic part of its
fundamental responsibility as a welfare state. View prudently, government recognition of the people's desire for
higher education means that restricting access would be detrimental. This is also influenced to a large extent by
the desire to have enrolments comparable to that in North America and Europe. This desire is lent support by
the repeated reports of World Bank that highlight the benefits of higher education. It also conforms to the
government view that by enhancing profile of its populace, the disillusionment in society as a result of
underemployment and unemployment can be contained. But, in the face of public demand and the pressures of
politics seeking the accomplishment of standardisation of primary school education (which should have been
achieved before the end of the Second Five Year Plan, in the year 1961), the government has concluded that
continuation of subsidisation of higher education which has been the practice for last 5 decades is no longer
tenable. Simultaneously, one segment of the population can afford prohibitive costs of higher education
facilities offered by a few private institutions and by foreign universities. Hence, the government is regarding

37
privatization. But, it is apprehensive on two counts. The first and foremost is that there would be disparity
among those can afford to pay more and those who would not be able to afford. The second is that
commercialisation of higher education could progress to a level where it transforms itself into one that is
entirely market driven.
Hence, the government intends to extend the system that is in practice in many states for the last ten
years. A vast number of institutions of higher education have been established and managed by private entities.
A sizeable proportion of such institutes are run with funds from the government, classified as ―aided‖ and these
funds take care of maintenance and operational costs. Irrespective of their status as aided or unaided, private
institutions without exception charge fees identical in structure and amount. Additionally, in all matters
pertaining to administration and academics, all institutes are regulated by the rules of the government and
university. In accordance with the system followed in a few states, as mentioned earlier, a chosen few and new
private unaided institutions are permitted to fix a fee structure that is substantially higher than others. But, the
fee structure can be fixed only after approval by the appropriate authority in government. The chosen
institutions are granted leeway in certain matters pertaining to administration. However, overall, they are
administered in similar manner as other institutions. It is inappropriate that India is contemplating acceptance of
this type of privatization; where flexibility, space, and academic liberty for the progress of knowledge, quality
and relevance are not encouraged, but stifled (P. G. Altbach & P. M. Petersoneds. , 1999).
Privatisation of higher education in India takes several forms (Tilak & Varghese, 1983b):
i. Government introduces self-financing courses within the public institutions

38
ii. Public government institutions converted into private institutions
iii. Government allows self-financing private institutions with and without recognition/ allowing
commercial education institutions
The feasible form for private players in the field of education is to engage in the establishment of private
universities, deemed universities and academic institutions (Jonaki & Prasenjit, 2016).
Establishment of private universities
A university should be a trust or society. It should not be an entity for profit or it should not be run by a
trust for profit. There are two ways to establish a private university. It can either be set up by an Act of
Parliament (central university) or by an Act of a state legislature (state university). Till today no private
university has been set up by an Act of Parliament. In the other method a university is being declared a deemed
university. There are currently 229 privately managed universities in India. Different states may have different
land norms and other procedure for setting up a private university. The analysis of such laws in the states such
as Rajasthan, Madhya Pradesh and Gujarat shows that these requirements are more or less similar across states
(Shankar, 2016).

39
Figure 5: Procedure to establish a private university
Source: Adopted from (Shankar, 2016)
Project report or
Proposal
• Project report/proposal with five years expected cash flow Statement, Letter of Intent and Initial sum of money
submitted to the Government.
• Proposal Contains: Objectives of the University, types of Programmes of study, deed of the Institution (Which is
a Trust/Society/Non-Profit entity under Section 25 of the Companies Act, or is being run by one), fee Structure,
admissions format Composition details of board of Governors, Availability of academic research and Training
facilities, building plan and land deed, etc.
Setting up the
University
• Once the Proposal is Approved, the State Government Tables the Bill of the Establishment of the Private
University, for Passage by the State Legislature.
Regulation
• The university shall maintain standards as prescribed by the relevant regulator (UGC, Except in the case of
technical, professional courses: AICTE or other councils).
• It shall get accredited by a body such as the National Assessment and Accreditation Council, within a Stipulated
Period of Time.

40
Regulations
The UGC reserves the powers regarding the recognition, functioning and de-recognition of deemed
universities. It also has the powers to distribute grants to other universities for their maintenance and
development and regulating fees charged by the universities. If colleges or universities fail to comply with UGC
standards their grants may be withdrawn or their affiliation may be terminated. Such disciplinary actions will be
taken of a college or university does not comply with fee other regulations (University Grants Commission,
2002). Private universities which offer technical courses like engineering, town planning, management and
which receive funds from AICTE should adhere to its academic standards and regulations (MHRD, 2016).
In order to give recommendations on building a knowledge base in India the National Knowledge
Commission (NKC) was set up in 2005. The reforms required in the education sector were also considered
while setting it up. Educational institutions for profit were not encouraged by NKC. 3 In 2008 the Yashpal
committee was set up in order to recommend changes in the higher education sector. The important suggestion
of the committee was that higher education should not get fascinated by the motive of profit. 4 Both NKC and
Yashpal committee recommended private investment in higher education to extend educational opportunities. It
is further discussed in detail with regard to the issue of access under fee structures.
Private providers always have a profit motive associated with them. The Supreme Court of India, lately,
interpreted that the nature of educational institutions to be charitable and not for profit. Hence, by providing
education supernormal or illegal profits cannot be made. If surplus revenue is generated it should be used for
expansion of the institution and for education development.

41
2.7 Issues in Privatisation of higher education in India
The major developments in the higher education wing of Indian education sector started in the early
1990s with the laws enacted to enable open/ free market. Tilak (1999) states that there is a need for higher
education to be privatised and the public funding for such education should be reduced. The Government of
India in the year 1997 distinguished the two categories of education in India- elementary education as ‗merit-
good‘ (Musgrave, 1959) and ‗higher education‘ as non-merit good. However, the Ministry of Finance classified
higher education as a ‗merit II good‘ and which needs no subsidisation as the same level as the ‗merit good‘.
In India, privatisation of higher education had always been controversial. In the year 1992, the Supreme
Court which is the highest judicial court in the country banned ‗Capitation fee colleges‘ stating that charging fee
is unfair. However, the court reversed the judgement in the year 1993 stating that these colleges could be named
self-financing colleges. This led to the emergence of private self-financing capitation fee colleges all across the
country and the proliferation led to more number of private institutions established in the nation. It is evident in
the states of Andhra Pradesh and Karnataka that the number of private colleges (engineering and management)
outnumbers the public educational institutions. In recent years, the number of private educational institutions
and the enrolment of students in these institutions have increased wherein the share of private enrolment in
2000-01 is 32.89 per cent and the share rose up to 58.5 per cent in 2011-12 (Jahan & Selvarani, 2015). During
the 11th
plan, India witnessed a predominant growth in the number of private institutions wherein the number of
private state universities is 98, 17 private deemed universities and 3581 private diploma institutions and 7818
private colleges. Even the number of private arts and science colleges has increased in the recent years (Jahan &
Selvarani, 2015). However, such enormous proliferation rate in the number of private institutes poses serious

42
doubts on the quality of education rendered by these institutes (Kaul, 2006). Aleem et al. (2016) claims that
commercialisation and privatisation in higher education will pose serious threats to the development of human
resources in two ways- expensive cost of education leading to unequal deliverance of education, and
determination of education priorities. While privatisation in education sector have been allowed in countries
like China and Singapore with flourishing higher education stats, the same should be feasible even in the Indian
context which is the premise of the present study.
2.8 Need for Privatisation in higher education
There are several requirements, which could be mapped with the privatisation of higher education in
India. Less than 1 per cent of the nation‘s GDP is funded by the central government of India for education. The
capacity building strategies of the government could not satiate the needs of higher education in the nation. By
the year 2013, the number of students enrolled for higher education is 14.6 million and the FICCI-E&Y report
FICCI (2011) states that in order to achieve 30 per cent GER in the forthcoming decade, the country would
require building a capacity of 25 million seats. However, predicting the extra capacity building cost, by 2020,
an additional 10 lakh crores (in Indian rupees) will be required for the government with a funding requirement
of Rs. 4 lakhs per seat. In the current Indian context, such allocation of resources for higher education would be
infeasible. Hence, private sectors play a vital role in bridging the gap between the requirement and the budget.
The positive contribution of private sector players towards higher education is evident from the success of
economies like Japan, the US and Malaysia. The GER of the US increased from 71 per cent in 1999 to 83 per
cent in 2008 whereas in Japan, the rate increased from 45 per cent to 58 per cent. In Malaysia, the rate increased
from 28 per cent to 32 per cent (Tiwari et al., 2013).

43
In India, Liberalisation, Globalisation and Privatisation play significant role in improving the quality of
India corporates. The economic reformation allows foreign players into the nation, thereby creating a
competitive environment between the foreign private players and the indigenous players. The low cost of living
and India being the large English speaking base next to the US enable the country to act as the higher education
hub in the Asian continent (Tiwari et al., 2013).
While researchers argued several needs for privatisation in the education sector, Jonaki and Prasenjit
(2016) combines all the need factors which are as follows:
i. Increasing the efficiency of the public sector by enabling competition
ii. With the rapid growth in the population, the country‘s ever-growing needs for education could be
satiated with the aid of private sector institutions.
iii. While Government funds were considerably allocated to the higher education wing, private sector
institutions may reduce the financial burden on the government.
iv. Reducing the decentralisation of educational institutions
v. Improved quality of education and training which aids in nurturing youth of the nation thereby
sufficing the local, national and global manpower needs.

44
vi. need for skilled and expertise man-power is increasing day by day. Since the country adopts the LPG
model (Liberalisation, Privatisation and Globalisation), the global needs for manpower should also be
met
vii. Facilitation of technological developments and economic developments in India.
With the new economic policies (LPG policies) that emerged in the early 1990s (Tilak, 2009),
privatisation has been given predominant importance. However, privatisation has affected the poor communities
in India drastically since there is an inequity in the deliverance of education across all the levels of the society
and the openness and diversity of the knowledge providers are questioned which includes the quality and price
of the product (education and knowledge) (Jonaki & Prasenjit, 2016).
2.9 Political economy of higher education in India
The tightly controlled structure of the Indian higher education sector was analysed by Kapur and Mehtaa
(2007). The paper has a two-fold key argument. The first argument is that higher education in India is de facto
privatized on a large scale.2 This privatization did not happen because of the changing preferences of the key
factors like the state, the judiciary or the propertied classes in India. Instead, this privatization took place from a
breakdown of the state system. Consequently, ideological and institutional underpinnings are very weak in this
form of privatization. Much of the private initiative remains within the bounds of the discretionary actions of
the state instead of being a part of a comprehensive program of education reform. As a result, the education
system is stuck between over-regulation by the state and a discretionary privatization which is not able to
mobilize private capital in useful ways. Any policy intervention will have to change this political economy

45
equilibrium if it has to succeed. Irrespective of the fact whether an institution is public or private, there are
vicious circles of interest which hamper reform.
Since some of the most renowned modern universities in India are established by some of the dedicated
individuals with private financial help, the private initiative in higher education is not a new concept in India.
This sort of public private partnership was unique in India (Levi, 1994, p313). In the initial stage the concept of
private institution was meant to be arbitrary. It was also a comparative category to express various classes of
educational institutions. In the domain of philanthropy such an arbitrary term gained image from its inception
without much complexity and became a normative language (Cotton, 1999, p566-567). The fact that the public
supported private institutions made the understanding of philanthropy easy. The policy of grand-in-aid system
was made operational during British rule with the instructions of East India Company to encourage private
institutions. Three types of private institutions- nationalist, sectarians and caste communities. They were
functioning with the support of individual philanthropist and local notables before independence. Private sector
continued to be a major domain in shaping higher education system in the post-independence India with the
constitutional provision. Such strong support from the history led to the substantial growth of private higher
education institutions which constitute three-fourth of the total education institutions. Private institutions are of
two types- aided and unaided. Aided institutions are privately managed and publicly funded, whereas unaided
institutions are both privately managed and funded colleges. In the initial stages of independence the role of
private initiative in higher learning education has been very crucial. Many of the private educational institutions
were reported to be non-viable and mediocre. The poor quality of delivery in their services and inadequate
enrolment rates of students largely caused such an outcome (Garg, 1977; Kulandaiswamy, 2005). The private
aided educational institutions were to strictly abide by the statue of the concerned universities. Since they

46
regularly received aid financial aid from the state, private aided institutions did not have a significant role in
sharing the cost of education (Tilak, 1992). Though the state has authority over affiliation, pattern of aiding and
regulation of education it failed to keep the constitutional promises of social justice. The managements executed
and enjoyed their local/estate power with knowledge governing power and the dominant culture was silently
reproduced in the educational institutions.
Consequently these managements continued to remain as sectarian and partisan organization of their
own locality, community and organs of political parties. Besides this, these institutions were instrumental in
local politics to circulate among the party cadres and supporters. Due to their affiliation with local political
power structures, these managements received under patronage and partisan prestige. The political elites, at the
same time, make governing rules of the system flexible. Combining local politics with governing power on
education institutions was, in a way, beneficial to both parties through nepotism, benefaction and influence. A
much more relaxed UGC rule made the process worse (Kumar, 2004; Rudolph, 1972). Most of the private
agencies had drawn from the elite sections of society. The state of education continued to be governed by
education itself. In the backdrop of mixed economy in India system of education caused the growth of
capitalism. Besides this, there were 20 fake universities in India which were illegally operating in the country.
The highest number of fake universities was found in Uttar Pradesh (9) and Delhi (5) stood second (University
Grants Commission, 2006). The logic behind the emergence of these universities is clear in the sense that there
was a demand for the creation of new institutions. The fact that they expanded private players in the education
sector was not considered much. This trend, probably, made the middle class indispensable in the private
education sector since only the middleclass can afford to buy education by paying a huge fee (Kapur & Mehta,
2007, p.35). In the post-reform period the outgrowth of self-financing institutions saw a paradigmatic shift in

47
the higher education sector in India. By this trend the attention is drawn towards the complexities of pedagogic
practices and its wide range of social consequence. The discourses on the privatization of higher education
mainly among the developing nations suggest that their commercial interest nearly tries to reduce education to a
sheer commodity. In such a context the state of education in India must be critically examined taking in to
consideration the political economy in general and education policy adjustments in particular (Babu, 2011).
2.10 Previous studies
Singh (2015) studied the effects of privatisation in the Indian higher education sector and the issues and
challenges associated with privatisation are investigated. India is one among the largest countries in terms of
population, geographical extent and the educational system. The country‘s educational system has grown
rapidly over the year after its independence. The number of educational institutions in India is also growing
every year. People in India could be generally classified into two categories: the ‗haves‘ and the ‗have-nots‘.
Singh (2015) argues that with a majority of people in India living below the poverty line, privatisation of
educational system is not a viable option. However, private players can establish their role in the country with
the country‘s regulations serious about the welfare of its people and the equity in education reaching all levels
of the people living in the nation. The increasing size of the demand and the growth in population clearly
necessitates the need for new private institutions which may provide quality education.
In the same context, Chougle (2014) analysed the perceptions of college faculty members towards
privatisation of higher education in India. The emergence of privatisation was initiated in the year 1991 with the
new policy enactment on Liberalization, Privatization and Globalization (LPG). Over the last two decades, the

48
policy changes have reflected both positively and negatively on the welfare of people in the country. On a
positive note, the targeted change of increasing the number of higher education enrolment in India is achieved
with the support of the government. The country witnesses increased number of private unsupported courses
and the Government of India had been supporting privatisation. However, privatisation is severely affecting the
weaker section of the society wherein the affordable population can pay for education and the ‗have-nots‘
struggling to pursue higher education. This increases the gap between the literate and the illiterate thereby
increasing the gap between the rich, middle class and the poor. In the previous study, teachers were survey to
understand their perceptions towards privatisation in Indian higher education sector. The findings of the study
revealed that the teachers believe in improved quality of education delivered by private sector institutions;
however, their concern towards the economically backward students further revealed some part of the
respondents stating their negative intent towards privatisation. The previous study revealed that with
privatisation, the educational status of the country will be incremented to global standards. The study
recommended that with privatisation, the government should also look for additional measures to support the
economically backward communities without which inequity in education will increase (Chougle, 2014).
Kumar (2014) investigated the role of privatisation of higher education in India with special emphasis
laid upon the Meerut, a city in Uttar Pradesh, India. The reality, as stated in the previous study is that public
resources are used for the expansion of private sector organisations in India. In India, the laws revolving around
the privatisation of higher education sector have aided private owners in increasing their wealth. Additionally,
privatisation has aggravated the conditions of student belonging to poor communities. The study revealed the
problems faced by poor students in Meerut and western UP wherein corruption and bribery are found to be
associated with privatisation in the higher education sector of India. Furthermore, the study resembles the global

49
context of education being converted as a commodity of sales with private players taking control of education
which is the right for all the citizens in the country.
Partima and Singh (2014) studied the impacts and importance of higher education privatisation in India.
After independence, the goal of the nation is to educate all the citizens of the nation. In this regard, the country
aspires to capacity building and creation in colleges which significantly affects the educational status of the
country. However, the funds allocated by the central government of India is less than 1 per cent of the nation‘s
GDP, hence meeting such goals becomes impossible for public institutions. Private sector bridges the gap in the
allocation of funds and requirements. The study predicts the future of India towards increase in the number of
private educational universities all across India. The previous paper concludes with the statement that
privatisation of higher education in India should take into account the maintenance of quality and academic
standards in these institutions.
2.11 Research Gap
A number of studies conducted previously on the role and impacts of privatisation in Higher education sector of
India discerned generally the various aspects and the need for privatisation in the higher education sector. While
other developing economies such as China, Philippines and Malaysia are evolving in a rapid pace, India lags
behind in the overall number of private sector universities and the number of enrolment for higher education in
these universities. This intrigued the researcher to conduct a study on privatisation in the education sector and to
analyse the perspectives of various public and private education pioneers about privatization and its
effectiveness in the future of India.

50
CHAPTER III: RESEARCH METHODOLOGY
3.0 Introduction
The research methodology was defined by Leedy (1997:5) as it is the systematic process of gathering
and analysing of data due to higher the understanding of research phenomenon. As per the above definition of
Leedey, the present chapter gives an elaborate description of procedures, which were adopted in this study due
to accumulating the information needed to attain the objectives of the study. Hence this chapter was categorized
into different sections. The first section describes the research design examining the advantage of using a
particular method, the qualitative approach as a means of permitting the respondents to provide many precious
answers and valuable insight to the research questions. Next section describes the research philosophy and
research approach. The target population and study sample size were identified in section 4. Later, the section
covers the sampling technique which is suitable for selecting the target population of the study. The sixth
section includes the data collection procedure in particular to the method which is applied to data collection in
this study. This section mainly describes the reasons for executing semi-structured interviews in this research
rather than using any other methods. Further, this section covers the procedures which involved for preparing
the interviews. Section seven describe the issues of validity and reliability were considered in the account in
overall research method. Further section eight dealt with the analysis of the interview and finally ended with a
summary of the chapter.

51
3.1 Research design
This research design is an essential step in any research to get an idea of data collection as well as
limitations of the study such as time constraints and resources. According to (Easterby-Smith et al., 1994, 84),
research design is about the structuring the research activity includes the data collection in ways which are most
likely to obtain the research objectives. In order to achieve the research objective, a suitable method should be
selected for gathering the required data. Survey on research methods (Creswell, 1994; Bell, 1996; Punch, 2005)
classifies the research into two main methods, qualitative and quantitative as it comes under the primary type of
data collection. Merriam (2009) explained qualitative research as an approach in which several people are
involved along with their perceptions of research that were assigned distinct meaning on the basis of the
experience of individuals and covers non-numerical data (Saunders et al., 2009). Creswell (2011) expressed
quantitative research as any data procedure or collection for data analysis that employs numerical data. As the
present research aims to explore a novel phenomenon via answering open-ended questions, a qualitative
methodology is a suitable method (Saunders et al., 2012, p.163) to obtain the study objective. Whenever a
social phenomenon is to be examined, a qualitative research methodology could be used which aims to
understand the implications in the society and the manner the social world operates (Hancock et al., 2009) .
Since the present study is based on the implications of higher education in India, a qualitative approach is
suitable.

52
3.2 Research philosophy
The research philosophy in general helps to gather and examine the adopted primary data. Still, selecting
the right philosophy is essential as it guides the investigator to move into the exact direction of research. In
addition, the philosophy also gives the idea of how the world is perceived and in which way the problem is to be
identified (Saunders et al., 2012, pp. 126-129). There are two kinds of research philosophy used in research of
social science considering the social reality such as positivism and interpretivist (Perry, 1995). The positivism
views the social world as an external to individuals and interpretivist views the objectives of thought as words
independent of external factors (Bryman & Bell, 2011, p. 22). The first approach is based on the beliefs of
universal laws and neglects the subjective interpretations. This method involved quantitative approach as a
result of the test theories and also try to find a casual relation between control and predictor (Holloway &
Wheeler, 2002, p. 5). Therefore, the present study adopted interpretivist method, which is suitable philosophy
for qualitative research as the knowledge is personally experienced
3.3 Research Approach
The relationship between research and theory can be approached in a distinct way which was explained
by Saunders et al. (2012, p.144). There are two kinds of research method used in research- deductive and
inductive approach. In the deductive approach, a hypothesis is created by past studies and tested by using
survey method and it is called as a top-down approach (Saunders et al., 2009; Gabriel, 2013). The inductive
approach is involved in generating theory on the basis of observations and results obtained via data collection
which is called as a bottom-up approach (Bryman & Bell, 2011, 4). According to Bryman and Bell (2011,

53
p.13), an inductive approach was applied in qualitative research and a deductive approach for quantitative
research. In this case, the present study attempts to explore privatisation in the higher education sector and also
analyse the perspectives of various public and private higher education pioneers about privatization and its
effectiveness in the future of India. Hence inductive approach is more appropriate to this research.
3.4 Target population and sample size
Selecting the target population is an essential part of the research (Gay & Airasian, 2003). A study
population is a group to whom the researcher plans to apply her or his research results i.e. the target population
of the study whose members are the people to be researched. In this study, the target group consists of top
management personnel of private higher education institutions in India in order to acquire the study objective.
Hence vice-chancellors,deans and administrators of private and public higher education institutions were
selected. Further, the sample size of this study was chosen as 19. Vice-chancellors serve as the leaders of
higher education institutions and as per the norm, he/she should be a good academician and an eminent
administrator (Rao & Singh, 2016) . Deans serve as the next higher authority in the University hierarchy and are
appointed by the Vice Chancellor (Ipu, 2016) . Furthermore, the former education minister of the State of
Karnataka is also interviewed The below table represents the number of vice-chancellors and deans of private
institutions involved in this research.

Is Market Driven Educational Model (Encouraging Privatisation in Higher Education) Good for India’s Future?

Is Market Driven Educational Model (Encouraging Privatisation in Higher Education) Good for India’s Future?

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