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While many disagree about how to fix Indian higher education, there is broad consensus that it is, to quote Prime Minster Manmohan Singh, "in a
state of disrepair". Most analyses put the blame squarely on the government's shoulders. Higher education has been deeply politicised and as one of the last bastions of the licence raj, lofty rhetoric has typically disguised egregious venal behaviour.

However, much less attention has been paid to the role of business interests in shaping the direction of Indian higher education. Availability of skilled labour is a critical input for all firms, and hence Indian business has an enormous self-interest in the functioning of this sector. One could argue that just as Indian firms have been forced to adapt to chronic infrastructure shortages and disadvantageous labour laws, they have also adapted to the weaknesses of the Indian higher education system.

A surrogate higher education system has evolved and, in particular, workforce skill development is occurring outside the traditional domestic university model - within firms, by commercial providers, overseas, through open-source/virtual learning and in narrow specialised institutions. Investment by Indian firms in an array of workforce skill development practices, including new employee training, continual instruction, performance appraisal systems and university partnerships, have all gone a long way towards improving the skills of their workforce. But these practices are confined to the large corporate sector, which both has the capability to undertake such initiatives and can internalise the costs.

Indian business is also involved in provision of higher education. Where business enterprises offer narrow professional skills, such as training in a computer language, this model has been somewhat successful. But the vast majority of private sector efforts involve the promotion of professional education in fields such as medicine, engineering and business management. These are ostensibly not-for-profit institutions set up as trusts or societies, yet they represent some of the worst aspects of crony capitalism in India, with politicians and business interests colluding to provide dubious education at inflated prices. Government policies have ensured that it is easier for such suppliers to enter higher education than for genuine philanthropists. Professional associations, even statutory ones like the BCI and MCI, have largely failed to regulate the quality of these institutions - a testimony to the failure of the professions to self-govern.

But while Indian business has been somewhat successful in securing its short-term interests by aggressively pursuing skill development programmes, it has shown a striking absence of any long-term strategic vision with regard to higher education. No world-class higher education institution anywhere in the world makes profits. Great universities produce knowledge - where knowledge is a public good. Consequently all such institutions require subsidies, whether through the government or private philanthropy. Despite rapidly increasing wealth within the Indian corporate sector, private philanthropy has had very little impact on higher education.

The commitment of Indian business to philanthropy in higher education was strong prior to independence and has dwindled ever since. Pre-independence, business interests not only made the transition from merchant charity to organised professional philanthropy, but did so in a significant way. They created some of India's most enduring trusts, foundations and public institutions, including the Aligarh Muslim University, Banaras Hindu University, Jamia Millia, Annamalai and Indian Institute of Science. Of the 16 largest "non-religious" trusts set up during this period, 14 were major patrons of higher education.

Today, the so-called not-for-profit educational institutions do not engage in philanthropy. Their income comes from fees rather than endowments and investments. Thus even while the number of "trusts" set up for philanthropy in higher education has been steadily rising, the total share of "endowments and other sources" in higher education funding has been consistently falling - from 17 per cent in 1950 to less than 2 per cent today. Some of this decline is to be expected, as the government has expanded its role in higher education, yet the extent is remarkable. Furthermore, donors today are more likely to retain effective control over the resources they contribute.

But Indian business has much to explain for a more egregious failing: for the most part, it sees little value in research and even less in building quality institutions that produce good research. This is manifest most starkly in its unwillingness to fund even world-class think tanks, let alone an outstanding university. The reality is that most Indian business elites' children study abroad, not in India. The sad implication is that this reduces their stake in lending a badly needed voice to genuine higher education reform in India.

It is extraordinary how much energy and capital Indian corporate titans are willing to commit to summits, conclaves and the like, where photo opportunities and power-point presentations pass off as the epitome of deep thinking and real insight. Yet, for all the posturing by Indian business elites and their courting of universities in the West (especially in the US), the notion of Indian business coming together to fund research centres that produce knowledge and provide quality education accessible to all sections of society in India does not seem to be on the horizon.

varsha agarwal
pgdm sec III rd
sec-b