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With 131 new institutions in 4 years, it’s boom time for private universities in India

Number of private universities in India jumps 47%, from 276 in 2015-16 to 407 in 2019-20, the latest AISHE data shows. 

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New Delhi: Billboards. Newspapers. Radio. Google. Youtube. Everywhere you look in this country, private universities will stare back at you. Their ubiquity is inescapable. If you have the cash to fork, there is a private university ready to admit you — academic performance may not be a bar.

In a country where education is still not universal in access but demand is huge, private universities have seen a phenomenal growth over the last half decade, largely outpacing the other kinds of universities.

The number of private universities in India jumped to 407 in 2019-20 from 276 in 2015-16, data from the latest All India Survey of Higher Education (AISHE) 2019-20 showed. Apart from these 131 private universities, more are set to begin soon.

This 47 per cent rise significantly outpaced the growth of all universities (private and public) — up 30.5 per cent to 1,043 currently from 799 in 2015-16.

According to the government, education institutions are broadly classified into six categories — state public university, state private university, deemed private university and deemed public university, central university and institute of national importance.

While each of the categories saw growth over the five-year period, the most considerable rise came in the state private university category. Most of the private players set up universities under this segment — growing 66 per cent to 327 in 2019-20 from 197 in 2015-16.

The Institute of National Importance category saw an 80 per cent growth, to 135 in 2019-20 from 75 in 2015-16. This was the largest growth in terms of percentage. 

The state public category saw 17.3 per cent growth to 386 in 2019-20 from 329 institutes in 2015-16.

Central universities went up from 43 in 2015-16 to 48 in 2019-20 (12 per cent rise) while deemed-to-be public universities went up from 32 to 36 in 2019-20 (12.5 per cent). Only one institute was added in the deemed-to-be private university category, taking the figure to 80.

The higher education market in India is primarily dominated (approximately 70%) by self-funded and unaided universities & colleges,” said an analysis by CollegeDekho, a student counselling platform.

The analysis based on the AISHE Report showed that “in the last few years, an average of 1000+ colleges have been set up in India year after year, out of which more than 80 percent are private establishments while the remaining come under the ambit of the government-funded institutions”.

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What are these new universities?

Among the new entrants are KREA University in Sri City in Andhra Pradesh, which is backed by former Reserve Bank of India Governor Raghuram Rajan, and Rishihood University in Haryana’s Sonipat. Both multi-disciplinary institutions started last year and aim to offer “liberal education” across disciplines.

According to KREA’s website, its sponsor is Institution for Financial Management and Research (IFMR) Society, a not-for-profit society focused on research.

Rishihood University has former railways minister Suresh Prabhu on its board as chancellor, and Ajay Gupta, co-founder of Bachpan Playschools chain, as a founder. Its founders include public leaders, spiritual gurus, business leaders, educationists, social workers and more.

Rishihood University is a collective philanthropic initiative to create a social impact,” the university website says.

Vidyashilp University in Bengaluru, which is founded by Vidyashilp Education Group and has educationist Dayanand Pai as its chancellor, is new on the list of private universities that offer multi-disciplinary programmes. Academic session 2022-23 will be its first admission year. It is the latest unit of the 1982-established Vidyashilp Education Group, and has started with programmes in liberal arts, data science and management studies.

The prominent names that have come up in the last five years include Marwadi University in Rajkot, which was founded in 2016 as a multidisciplinary institute offering engineering, management, arts, finance, physiotherapy etc. Ketan Marwadi, chairman and managing director of Rajkot’s Marwadi Financial Services, is among its founders. 

Another is the Anant National University, a private design university founded by the Laxman Gyanpith Trust in Ahmedabad in 2016. Piramal Group chairman Ajay Piramal is the president of the university’s board of management. The university has founding members from Ashoka University — Pramath Raj Sinha and Anunaya Choubey — on its management team. 

Adamas University in West Bengal was started in 2015 by the Adamas group, a well-known education group in the state that runs technical colleges and other institutions.

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Why more private institutes? 

According to the people associated with new universities, who have served on the founding team of other older private institutions, these universities with their diverse offerings are the need of the hour. 

Marwadi University Vice Chancellor Sandeep Sancheti, who was previously the V-C of SRM University in Chennai and also the president of Association of Indian Universities, said more private universities are coming up now to meet the demand of the growing number of learners, because government institutions can cater to only so many. 

“This is probably following a projection which the National Knowledge Commission came out with 15 years ago that India needs 1,500 universities. Now that the new National Education Policy says that the Gross Enrolment Ratio should reach 50 per cent by the year 2035, you need more and more education institutions,” said Sancheti.

Gross Enrolment Ratio (GER) is basically the population in the 18-23 age group enrolled in higher education.

“This is the reason, I believe, institutes are increasing, not just private but government as well. Many new public state universities have also opened up and the growth is likely to continue,” he said.

“Speed, efficiency and diversity is what private universities provide, that is why they are doing well. On the other hand, government universities provide equity, transparency and accountability. The speed and diversity is what is making the private universities win,” he added. 

Anant National University Provost Anunaya Chaubey agreed with Sancheti that private universities provide more diversity. He has been on the founding team of Ashoka University and the Young India Fellowship programme. 

“In most of the cases what we found is that education institutions operate in an age-old manner and are not keeping in sync with the changing scenario which requires a new approach. This is the vision with which we had started our Young India Fellowship, which was a precursor to Ashoka University,” Chaubey said.

“The idea was very simple, to create a platform where irrespective of what a student has studied, he or she should be able to choose whatever they are interested in. Like a computer science student should be able to study philosophy as well. This is what the private universities are doing… providing a platform that is more inspiring,” he added. 

On regulations for private universities, he said, “The government is more open to the idea of private universities now, but on the condition that they do well. At Anant, we have regular checks from various government bodies that inspect whether our infrastructure is good, if we are providing employment opportunities to our students and so on.”

Adamas University V-C Deependra Kumar Jha in Kolkata also believes there is a limit to the capacity of government institutions, beyond which private institutions need to step in.

“GER is increasing and more students are going for higher education, so there is a limit to which the government can cater to… limit of money, resources, everything. This is where the private sector steps in,” said Jha. 

“The other reason is that the government became more conscious of global rankings of its education institutions and that’s why it started looking at private institutions. There are many private institutions that are doing terrific research,” he added.

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The business of running a university

Education is a not-for-profit sector in India, which means if an institution makes surplus, the money has to be ploughed back into its activities. So, what exactly goes into running the business of these private institutions?

Vineet Gupta, one of the founders of Ashoka University and the newly established Plaksha University in Punjab, explained that there are two kinds of investments — one is family-backed (business oriented), and the other philanthropy driven, where many individuals and institutions contribute money.

“If you see institutions like Harvard and Yale, they are private institutions but you cannot say who is the owner, they are just generally working for the public good… they were philanthropy-driven institutions. This model of philanthropic initiative gave good universities to the US. Ashoka and Plaksha are coming from there. This is a model where a large number of people are pooling in resources,” Gupta said.

“For a good quality institution, it will have over Rs 2,000 crore in investment when fully built, but fundraising for these institutions is a constant journey,” he said.

Gupta added that the kind of money needed to build a good institution also depends upon what you want to do with it. “Whether you want it to be a highly research-driven institution or simply a degree granting institution. The kind of faculty an institution recruits also decides its costs,” he said.

Pramath Raj Sinha, who was the founding dean of Indian School of Business (ISB) and one of the founders of Ashoka University in Haryana and Anant National University in Gujarat, agreed.

“The investment depends on many things — cost of land, infrastructure and the quality of institution you want in the initial years. One should keep in mind at least Rs 50 crore to Rs 100 crore are required initially,” he said.

On the kind of profit a university can make, he said, “After a gestation period — maximum of 8-9 years — it can generate healthy surpluses. But it’s hard to recover all costs of land and building…again depends on how much you invest upfront.”

While the law of the land dictates that an education institution can’t make profits, several people told ThePrint on condition of anonymity that several loopholes in the rules are exploited to make profits while keeping them off the books.

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Is there a flip-side to the growth?

Ankur Jain, chief business officer at Sunstone Eduversity, a body that partners private colleges and universities to provide curriculum and other support, said there is also a flip side to the increase in private universities. According to him, those in the bottom rung don’t maintain quality. 

“The curriculum is very outdated in state universities and that is where we step in…to help institutes upgrade their curriculum. But the outdated nature of state universities is the same reason that the government opened up the sector for private players in a major way,” said Jain.

“But the problem is that they kept a requirement of land … whoever has 25 acres of land started opening universities without focusing on the quality of what they are teaching,” said Jain. “This is the reason that the bottom rung private universities are now becoming like state universities — not bothered about the quality of education.” 

According to University Grants Commission guidelines, the proposal for establishment of a private university can be sponsored only by — a society registered under the Societies Registration Act; a public trust registered under the State Public Trusts Act; and a company registered under section 25 of the Companies Act. 

The private universities are governed by UGC Establishment of and Maintenance of Standards in Private Universities regulations 2003.

Talking about the growth in private universities, a senior UGC official, on the condition of anonymity, said that it is “because there is an increased demand”.

“The number of learners is growing and the private sector has tapped into the potential of the market. NEP also aims at achieving 50 per cent GER by the year 2050; this will not be possible only with public institutions. We need active participation from the private sector,” the official added.  

On the quality of the institutes, he said: “If an institute does not meet the required standards, it will be shut down … there are bodies like NAAC (National Assessment and Accreditation Council) to ensure that.”

This report has been updated to revise the first academic session of the Vidyashilp University in Bengaluru — it is 2022-23 not 2021-22, as said by the university earlier.

(Edited by Amit Upadhyaya)

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