Our higher education system is under-performing in many ways. University education is rigid, outdated, under-funded and bureaucratised. Even the best institutions have problems. A partner in an IT firm and a professor of computer science independently told me that the quality of IIT students has got worse over the last two decades. They are burnt out by the time they get in because of the entrance exam. Students have to suffer years of incredibly stressful and mind-numbingly stupid exams and coaching to enter college.
At the same time, there is very little research done at universities. Grant funds from science ministries go mostly to elite laboratories that are separated from educating undergraduates. There is some peer-reviewed research funding, especially in the natural sciences, but the bulk of state funding goes automatically to research institutes regardless of performance. This has created a culture of sycophancy and lack of accountability. Moreover, the number of these institutes is small, so research in science and the social sciences within India is dwarfed by the research conducted by just Indians in those same fields who have emigrated, never mind the total amount of research conducted in China or the US. India does not have the scale to conduct research except in a few niches.
Surprisingly enough, it is quite simple to fix all of this. To see how, ask yourself which country has the best higher education and research system in the world. As my children would say, “Duh! The US.” This is not explained by money alone. The Europeans have plenty of money but European academics emigrate to the US, not the other way round. Why is this? It is related to two features that foster excellence in research, as well as in teaching. Research excellence is fostered by a large system of government grants allocated by peer review, through the National Science Foundation (which also funds the social sciences), the National Institutes of Health, and other government agencies. Second, university teachers’ salaries are not regulated by the government. So students have to pay high fees at the better universities, but the US government moderates this by providing students with loans on very easy terms together with some grants for low-income students.
These two key features compel American universities to compete for the best researchers and teachers. A university that does not reward good research will lose grant money (of which it gets to keep a large percentage as overhead) as the best researchers go elsewhere. A university that does not promote good teaching will lose students who will take their fees elsewhere. Research creates new knowledge and the people creating it update syllabi and spread their knowledge to students much faster if they are in a university than if they are in an institute devoted only to research.
The last thing to notice before turning to how to apply these lessons in India, is that the US university system is dominated by non-profit organisations although there is no ban on for-profit institutions. For-profit institutions in America have lost the competition with institutions run by academics.
We need to implement these two features of the American system. First, allocation of research grants in the sciences, engineering, health, the social sciences and humanities should be mainly by peer review. (The allocations themselves need to be massively increased, however.) Second, we should remove the regulation of university salaries and fees and other aspects of administration by the University Grants Commission (with one important exception spelled out below). Let universities pay what they like and charge what they like. This will force them to compete for the best researchers and teachers and this in turn will motivate teachers and researchers to do their jobs well. The improvement in academic atmosphere and salaries will attract better-qualified people into the profession, pulling back émigrés and young people who would have gone into the private sector.
To protect the students who cannot afford high fees (and its own budget), the government can take the money it now pays directly to the universities to cover salaries and other costs and instead pay it out to low-income students as grants. Every student below a suitable cutoff level of family income (verified by tax information, car ownership, etc) can be given a fixed grant that can be used at any college. A poor student who cannot afford the higher fees at the best colleges can be given a loan for the necessary additional amount, to be recovered over the years through additional income taxes. This will ensure that even poor students that are funded by government grants will avoid colleges that are bad value-for-money.
Rich students will pay for themselves rather than have the government pay for them as happens now. Many of them will be happier because they will get to go to better-funded and decent colleges in India rather than pay enormous amounts to go to America. And the poor will get greater access because the government money that now pays for rich as well as poor students will go exclusively to low-income students.
Admissions need to be regulated at the undergraduate level to ensure that they are made on academic criteria alone and not money. This can be done by obliging all undergraduate institutions to make admissions decisions solely on the basis of exam marks of the recognised Boards (Indian and foreign), weighted by difficulty, and to adopt the same application form. Students will then be liberated from the stress of having to take many different entrance exams and fill many different applications. The dumbing down of Board exams that has occurred as a result of not weighting Boards by difficulty will vanish.
The author received his PhD in Economics from Harvard and taught at Emory University and the University of Michigan at Ann Arbor before joining the Indian Statistical Institute where he is Professor and Head of the Planning Unit.