Reforms in Higher Education Financing in India: Unravelling the Concerns of Affordability

• In Event: Developments and challenges in economics and finance of education: Evidence from LMICs and high-income countries

Proposal

In the 21st-century global knowledge economy, countries worldwide are prioritizing Industry 4.0 and new generation skills, reflecting a strategic policy focus on higher education expansion. India, as one of the leading nations in this pursuit, has witnessed a significant transformation since 2009, evolving into the world's second-largest higher education system after China. This growth trajectory has been predominantly fuelled by the proliferation of private higher education institutions, particularly those offering job-oriented courses which have encouraged the policy analysts to relook into the affordability and equity concerns.

However, despite the expansion of higher education with a GER of 28.4 percent, India has witnessed a relative decline in public expenditure on education as a percentage of GDP (1.52%) with stagnant allocations for university and higher education (0.62%). There has been a notable shift in higher education financing dynamics in India. The contribution of households to financing of higher education have grown with the growing costs of education and the self-financing approach of higher education financing at the policy level. This self-financing approach has also spurred the proliferation of more technical and professional courses charging exorbitant fees, raising concerns about affordability for students from socially and economically disadvantaged backgrounds. The New Education Policy 2020 gives special emphasis on cost sharing methods and income generating measures and envisages encouraging more philanthropic contributions to higher education in the coming years.
Considering higher education as a marketable product argued to be having severe implications on knowledge production leading to gradual shift towards knowledge capitalism (Olseen & Peters, 2005). The mismatch between societal needs and market interests albeit sacrificing quality of the courses offered as experienced by Denmark and many countries in Europe can’t be ruled out with the marketization of higher education (Bendixen & Jacobsen, 2017).

This study based on a field based empirical survey has made an attempt to understand the transition from public financing to private financing of higher education in India in the context of New Education Policy 2020 and unravels the current and future challenges in access to higher education by the students from socially and economically disadvantaged backgrounds. The findings unfold not only the plights of the students to afford high-cost self-financing courses in the absence of adequate government scholarships which inhibits their chances to uplift their status in the society by enhancing their employability but also the challenges of the higher education institutions to explore innovative financing measures to meet the day-to-day expenses of the institution.

Author

• Jinusha Panigrahi, Manav Rachna International Institute of Research and Studies, Delhi-NCR, India