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Private universities usher in a wave of big money in education

Jury out on quality, students worry about high fees

Aparna Kalra  |  New Delhi 

Ashoka University

A luxury bus leaves from Hotel Oberoi in central Delhi for the Rajiv Gandhi Education City near Sonepat on a Sunday. Every seat has a lunch box with cashew, juice, chips, chocolate and biscuits. Riding the bus is serious entrepreneurial and family money.

Ashish Dhawan, founder of ChrysCapital, holds a mike and tells the story of how he discussed the idea of setting up a university in 2005 with Sanjeev Bikhchandani, founder of, a well-established job site. Bikhchandani recounts how the meltdown forced a scaling down of the plan which is now taking shape. Ravi Jhunjhunwala of LNJ Bhilwara leans back on the last seat and discusses the university with his wife. He is soon joined by Puneet Dalmia.

Ashoka University founders and their families are visiting the campus, some for the first time. Together, they have managed to put in Rs 200 crore for a liberal arts varsity, signifying a break from tech and business schools and being part of a wave of big money coming into Indian education. Ashoka University will get its first class of undergraduates in August. So will BML Munjal University, started by the Hero Group, the country's largest motorcycle maker.(PRIVATE UNIVERSITIES BACKED BY BIG BUSINESS)

In Noida, Shiv Nadar University, which gets a grant of Rs 250 crore a year from the Shiv Nadar Foundation, set up by information technology czar Nadar, will throw open its MBA programme. A couple of kilometres from Ashoka, looms the impressive edifice of O P Jindal Global University, founded by Naveen Jindal, who runs a Rs 20,000-crore steel and power empire.

There is a fresh round of sorely-needed money coming into education, and this time it is not looking for returns. It is clear the funds will make only a blip in the country's gross enrolment ratio of 18 per cent in higher education in 2011-12, which the government is trying to push to 25 per cent by 2016-17. These universities have the advantage of strong job linkages, since their owners have experience of running business empires. They also have scale. Unlike a private college, a university can award a degree, vital to attract undergraduates, and it can offer a number of programmes and disciplines.

Experts, though, question if these shiny campuses will bring with them the one thing Indian education, from school-level to college level, government-run or private, is dubious on - quality. "These universities are yet to come up. They are not known in the world like Harvard or MIT. Quality is not determined by some big man pouring money into a building," scientist and Bharat Ratna recipient C N R Rao told Business Standard. He urged Indians not to accept low-quality education and said young graduates were earning money but had stopped applying their minds.

Proactive state govts

The fresh investment in universities shows some states have been smart enough to change their laws to attract private funds into education. After a long period of government control in higher education in the form of central and state universities, private universities such as Amity, with a mini Singapore-like campus, burst on the scene because states such as Haryana and Uttar Pradesh (UP) enacted laws to allow private universities to start without central government approval. Education in India is a concurrent subject, which both central and state governments can tackle.

The Haryana Private Universities Act, 2006, ushered in the O P Jindal University in 2009. The government simply amends the Act to let in a new university, and till 2014 had allowed in 17 universities, the last three being Ashoka, B M Munjal and Al-Falah.

Uttar Pradesh, similarly, established Amity University by a state law. Later, Sharda University and Galgotias University were let in through similar laws, enacted in 2009 and 2011, respectively, copies of which are on the universities' websites.

Punjab, Rajasthan and Karnataka are other states actively encouraging private universities. The first two gain from the advantage of locations such as Gurgaon (Haryana), Sonepat (Haryana), or Noida (UP) with their proximity to Delhi, which brings in students, and the one-stop shop of permissions that hubs such as the Rajiv Gandhi Education City offer. Manoj P, associated with the Azim Premji University in Bangalore since its start, enabled by the Azim Premji University Act, 2010, said the Karnataka government has since then allowed in eight-nine private universities.

"You have the greatest impact (on society). That's what you want to do," said Ajit Rangnekar, dean of the Indian School of Business or ISB in Hyderabad, a privately-run business school co-founded with Rajat Gupta in 2001, which is looking to become a university. ISB, whose main campus falls in the recently created state of Telangana, said it would offer multi-disciplinary courses and take in undergraduates if made into a university. ISB has roughly 760 post-graduate students of business administration in its Hyderabad and Mohali campuses. Four founder supporters of ISB, Analjit Singh of Max India, Rakesh Bharti Mittal of Bharti Enterprises, Sunil Kant Munjal of the Hero Group, and Atul Punj of the Punj Lloyd Group, invested Rs 50 crore each in the Mohali campus which started in 2012.

While the Punjab government has offered ISB university status, Dean Rangnekar is hesitant as it leaves out its Hyderabad campus where the parent state, he says, may not have a private varisty law. Rangnekar wants a national law on private universities that allow multi-campus institutes to become universities. ISB offers a post-graduate diploma, and not degrees, in management to its students, just the way the Indian Institutes of Management or IIMs do.

Though the private universities fill a need, the high cost of being a student there is a matter of much discussion online among aspirants. The Jindal Law School, for instance, charges Rs 6.75 lakh fees per year, including hostel charges, for a five-year BA LLB course; in sharp contrast to the National Law School of India University, Bangalore, which charges Rs 1.76 lakh per year, including residence, for the same course.

"While in the US it might be possible to get a loan and couple the effort with previous savings and workings during the law school study to afford the fees, how does one expect a person with average Indian income to pay the exorbitant fees at JGLS (Jindal Global Law School)? Great effort but I would still go to a National Law University," said Sandipan De, commenting in Bar & Bench, an online platform for the legal community.

Deans of the universities say they are generous in offering scholarships. A Jindal Law School student assured De, for instance, that it is possible to get a full fee waiver. At Ashoka, where the undergraduate course costs Rs 3.9 lakh per year, 60 per cent students will get 20 per cent to full fee waiver.

A reason a large-investment university is considered viable is because attracting good faculty has long been a struggle, as India does not produce enough research scholars to fill faculty positions. Universities backed by deep pockets can hunt globally for teachers. Ashoka University, for instance, has a British teacher for Sanskrit; Dean of academics, Jonathan Gil Harris, a scholar of Shakespeare and a fan of Vishal Bhardwaj, has taught English at the George Washington University.

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First Published: Sat, August 02 2014. 21:27 IST