India tries to lure foreign colleges to cash in demographic dividend

When 19-year old Pavitra Singh, one of 20 million students at India’s universities and colleges, gets her degree in two years’ time, she fears it will not be enough to secure a job. Indian employers tend to agree. Many say graduates from homegrown universities are often unemployable because job seekers do not have the skills they want, one reason why New Delhi is trying to fast-track legislation to allow foreign colleges, until now largely shut out of the country, to open their own campuses in the country.

On the cusp of a boom in its working-age population, country is racing against time to raise the quality of its education to prevent a demographic dividend turning into a demographic curse. “It is absolutely urgent,” said Tobias Linden, the World Bank’s lead education specialist in India. “The people who will make up the youth bulge have already been born. This is not a hypothetical situation. They might just be one, or two, or three years old now, but taking action to help them when they become 18 – those moves have to start now.”

Over the next two decades, Asia’s third-largest economy will add up to 300 million people – the equivalent of almost the entire population of the United States – to its workforce. That prospect offers hope that India, struggling now with its weakest economic growth in a decade, can finally follow in the footsteps of the likes of China and the Asian Tigers.

A generation ago these countries made good use of their growing workforces, training young people and putting them to work in export-orientated manufacturing, to generate economic growth that was the envy of the world.

Best Chance
India’s working-age population will not peak until 2035, in contrast to China, where the working-age population topped out this year, brokerage Espirito Santo Securities says. Labour forces in South Korea, Taiwan and Singapore will peak in the next five years. Such demographic factors offer India “the most compelling conditions for economic growth the country will, we argue, ever have”, the brokerage said in a report. “Yet demographics are not destiny.”

Attracting foreign colleges to open campuses in the country is one solution for a university system that the planning commission says is “plagued by a shortage of well trained faculty, poor infrastructure and outdated and irrelevant curricula.” Despite a surplus of workers, employers across sectors say local universities do a poor job of preparing graduates for working life. None of India’s universities feature in the world’s top 200, the 2013/14 rankings by the London-based education group Quacquarelli Symonds (QS) show, versus seven from China.

Many homegrown universities rely on rote-learning and fail to teach the “soft skills” that are increasingly important in the country, where the services sector has driven the economic growth of the last two decades, recruiters and students say. “We don’t learn here – we are just taught to mug up, so it’s hard for us when we go out to find jobs,” said Singh, an undergraduate at one of the country’s largest private colleges, Amity University, referring to the teaching style across the country. “I’m worried that when I get to my first internship, I won’t know how to do anything.”

Foreign universities have been largely shut out of India, allowed only to open research centres, teach non-academic courses or offer degree courses with a local partner. Now, the government wants to offer them the more lucrative option of opening their own campuses.

Catch Up
The Ministry of Human Resources Development (MHRD) is trying to issue what is in effect an executive order, which would leapfrog a bill stuck in parliament since 2010, one casualty of a legislative logjam that has paralysed Indian policy making over the last two years. Despite scepticism from many institutions that India will be able to change its game with elections looming by next May, some foreign universities are keen to push ahead with campuses.

“A campus in India has always been our vision and that is our plan,” said Guru Ghosh, the Vice-President for Outreach and International Affairs at Virginia Polytechnic Institute and State University, known as Virginia Tech. It is due to launch a research centre near Chennai in spring 2014 and hopes to set up a campus within 3-5 years if the rules change, Ghosh said.

Under the proposed rules, non-profit foreign universities in the top 400 worldwide would be able to open campuses. The rules need a final sign-off from the law ministry, which will take up to three months, according to RP Sisodia, Joint Secretary for Higher Education at the MHRD.

While India has dithered, other Asian countries have moved ahead, with foreign universities in Malaysia and Singapore attracting Indian students. Spokespeople for Stanford University, the University of Chicago, Duke University and the UK’s University of Northampton told Reuters they had no plans for a campus in India, even though they all have or plan to have research centres or offer courses on a local campus.

“The environment has not been a welcoming one thus far and people have looked elsewhere,” said Vincenzo Raimo, Director of the International Office at Britain’s University of Nottingham, which has campuses in China and Malaysia. “Anyone who’s going to open there (India) needs to be brave.” Foreign colleges would only meet a tiny portion of country’s demand for places, but their presence would put pressure on domestic counterparts to improve, higher education experts say.

To be sure, the planning commission has set a target of creating 10 million more university places in the next few years and boosting funds for the top domestic universities to try to elevate them to the ranks of the world’s top 200 by 2017.

If India fails to harness its population boom over the next two decades, its demographics could be “a disaster – not a dividend”, Espirito Santo said. “A major shortage of jobs in the economy, or a skills mismatch, would create a young, angry and frustrated population,” its report said.

Source: The Economic Times (Online Edition), October 3, 2013

Demographic dividend can be leveraged only if youth are given education

Drawing attention to the challenges of public funding for higher education, Union Finance Minister Pranab Mukherjee advocated the need to design ‘tailor-made’ public-private partnership models, albeit with regulatory oversight of the government. Delivering the first convocation address of the Central University of Orissa in Koraput on Sunday, Mr. Mukherjee said the foremost challenge in the higher education sector in India was bringing about equity and quality.

Pointing to the increasing working-age population in the country, he said the demographic dividend in the country’s favour for the next three decades can be leveraged only if our youth are given education and relevant skills. He hoped that the implementation of the Right to Education (RTE) would help realise the advantages of the demographic dividend.

Appreciating the performance of the Central University at Koraput, which he felt had started contributing to the economic development of the region, Mr. Mukherjee commended its efforts in launching several need-based programmes, particularly for tribal and community development. Globalisation has a very significant impact on India and it was all the more necessary to ensure relevance of higher education in order to attain excellence, he said.

Vice-Chancellor Surabhi Banerjee said the perspective plan of the University was going to define its uniqueness. “It is not going to be yet another university in the multitude of run-of-the-mill academic institutions. It definitely aspires to become a University with a difference, which aims at making a difference in the lives of the people.”

The corpus of a sound, full-bodied and a timeless institution is created only when you prepare the strong cast and frame and instil the flow of quality life into its veins. This was the only way to strengthen the academic stem of the University, she said.

According to Ms. Banerjee, the University was conceived as an avant-garde premier institution of the new millennium, which calls for a world-driven higher education agenda. “It is indeed an uphill task at this point of time to develop an exemplary academic institution with a pan-Indian perspective, which should be optimally wedded to a global vision, because we are now in the process of reinventing and redefining higher education in a globalised context.”

As many as 106 graduating students were awarded their degrees at the convocation. Orissa Governor M.C. Bhandare and Chief Minister Navin Patnaik also addressed the students.

Source: The Hindu, July 11, 2011

New institutes in UP, Bihar keep the students at home

Till a decade ago, students finishing school in the cow belt of UP and Bihar, mostly migrated out of their home states to join better-quality, higher education institutes in other parts of India. For those wanting to pursue world-class engineering or management courses, except the some IITs (Indian Institutes of Technology), IIMs (Indian Institutes of Management) and a handful of government institutes, options were few.

There were almost no second and third-rung institutes. The students moved to Delhi, Mumbai, Pune or Bangalore, which are known for their management and engineering institutes, both in the government and the private sector. But now, with the advent of private institutes in UP and Bihar, which are also focussing on world class academic standards, students increasingly find options closer home.

“With several private institutes being set up in UP and the neighboring states, students from these regions find more options for their higher education,” says Apoorva Palkar, Executive President of the Consortium of Management Education (COME), a body of 52 private institutions in Mumbai and Pune. She adds that students are increasingly choosing to study closer home provided the academic and placement standards are good. What this means for institutes in western and southern India, is that they now have to go out of their way to woo students from the cow belt. “This does not mean that students from UP, Bihar and other states in that region are not opting for institutes in Maharashtra,” adds Palkar.

“But now institutes from Mumbai, Pune and such have to go the extra mile and market themselves and highlight their achievements to attract students from here. Obviously, with Pune and Mumbai being corporate hubs, even middle-rung institutes have handsome placement records, which helps.” Many southern India-based institutes are also holding seminars and career camps in cities like Lucknow, Allahabad, Varanasi, Patna and Bhagalpur, to inform students about their facilities and academic record, and to try and convince them to apply.

Sharad Singh, CEO of the School of Management Sciences (SMS), which accepts about 900 students every year in its management and engineering programmes at campuses in Lucknow and Varanasi, says: “One can increasingly find the well-known south-based institutes vying with us to inform and counsel students about their colleges. With several good institutes coming up in the larger cities of UP and the Noida region, students now have an equally good option closer home. Having demonstrated good placements for the last several years at SMS, backed by good infrastructure and academic standards, we have also been able to win the trust of students.”

Nikhil Sinha, Vice Chancellor at the Shiv Nadar University, which has recently been set up in Greater Noida with an investment of Rs. 1,000 crores (Rs. 10 billion), says that while theirs is a world-class institute which would seek to compete on merit with premier institutions of the world, the country needs many such institutes to cater to the large base of graduates and students passing out of school each year.

Particularly those who cannot make it to the premier institutes like the IITs and IIMs. Sinha adds that many institutes have come up in the Noida area which offer good education, and where students can hope to be placed in good jobs after there are done studying here. Several institutions like Amity and the India Institute of Planning and Management have now started establishing branches in tier-II cities, providing good faculty and placements, which is helping address the demand among students.

Needless to say, students from the region are happy about the profusion of academic options. Uttam Narain Singh , who did his graduation from his hometown of Jaunpur, in UP, says that he wanted to leave home to study in another city. But his parents were unwilling to send him to Delhi as they did not know anyone who could serve as a local guardian for the youngster. Singh chose to apply to Amity’s branch in Lucknow, from where he has just graduated in engineering.

“I could not get admission into the Benaras Hindu University (BHU), which offers a reputed B.Tech. course,” says Singh. “I also wanted to move out of my hometown Jaunpur, which is a small place, for better exposure and opportunities. Lucknow was a good choice that my parents and I settled on, so I sought admission in the Amity Institute there.” Neha Kumari, who is from Giridih in Jharkhand, is a second-year student of B.Tech. at the School of Management Sciences in Lucknow. She says: “I took a conscious decision to study in Lucknow.”

Source: The Economic Times, June 14, 2011

Focus on higher education to leverage demographic advantage

The global marketplace and indeed the world economy is changing rapidly and these changes are impacting the way we do business, earn a living and grow within India as well. About 51% of India’s population is less than 25 years old. While this gives India a large demographic advantage, states in India need to focus on education to ensure that an educated and appropriately trained/skilled workforce is ready to tap the opportunities of the time. However, increased government spending on education since 2007 notwithstanding, 142 million children in India are denied primary and secondary education and a third of the nation’s population cannot read. Clearly, with the Indian economy growing rapidly, fuelled by the rise of knowledge-intensive and hi-tech sectors like ICT, automotives, pharmaceuticals and others, states must ensure quality education to enable Indians reap the benefits of economic growth.

In order to understand which states in India are prioritising education, we considered four indicators higher secondary school enrolment, government revenue expenditure on education, number of universities and women’s literacy rates. These indicators serve as good pointers to the condition of education in a state and impact on economic growth.

Small states target education as the recipe for growth; need more focus
The hill states of Uttarakhand and Himachal Pradesh will benefit from high per capita school enrolment figures, which are much higher than the national average of approximately 3230 students per 100,000 people, even as their GDP growth rates are above the national average. Meghalaya, Tripura, Haryana, Goa and Delhi are other states with healthy GDP growth as well as school enrolment figures. These, except for Haryana, are also among the top 10 states in terms of per capita revenue on education, arts and culture. This indicates that education is a clear priority in these states.

Women’s literacy is another dimension and the one widely seen to have a big impact on economic growth. Many small states fare well in this regard. Kerala clearly stands out with exemplary female literacy rate (87.72%). The state also shows healthy school enrolment figures, good government expenditure and adequate infrastructure.

The fact that these states are small both in geographical area and population requires them to pay attention to the quality of their human resources if they have to attract investment and successfully harness their natural endowments. For instance, both Uttarakhand and Himachal Pradesh have focused on creating industrial zones. The success of these industrial zones depends on the availability of employable talent locally, besides power, cost of land, logistics and government incentives.

From a competitiveness perspective, these states would need to align skills imparted by the institutions in the state with the skills to be required by the industry in the future. States, therefore, need to make a realistic projection of labour that would be required by the industries the state is promoting as well as by those industries that already exist, and then focus on developing institutions that can train people who can be placed in these industries. This is the key to enable people to avail of the opportunities within their home state, instead of being forced to migrate to other states or metros for employment.

Large states daunted by task of educating masses despite adequate infrastructure
Tamil Nadu and Maharashtra are the only two large states with good higher enrolment figures for higher secondary school. Other large states such as West Bengal and Karnataka, that have healthy GDP growth, and even Bihar and Andhra Pradesh, that have substantially higher GDP growth than the national average, show poor per capita higher secondary school enrolment. Madhya Pradesh scores low on both counts. Large states, with the exception of Tamil Nadu, Maharashtra and West Bengal, are also at the bottom of the list when it comes to female literacy.

Educating a large population is a challenge for big states. If we look at the figures for government expenditure, this is evident. Large states do not figure among the top 10 spenders per 100,000 population. Yet, West Bengal spends more on education, arts and culture than Tamil Nadu and Maharashtra that show good enrolment figures. Madhya Pradesh and Uttar Pradesh spend the least per capita on education.

Ironically, these large states have the best infrastructure in the country. Uttar Pradesh has the largest number of universities (29), followed by Maharashtra (27), Tamil Nadu (22), Andhra Pradesh (20), Madhya Pradesh (19), Bihar (17), Karnataka (16) and West Bengal (14). However, the quality of education imparted by these institutions is a matter of concern. States such as Madhya Pradesh and Uttar Pradesh are neither able to adequately fund their educational institutions, nor retain quality faculty. Inadequate employment opportunities for graduates further strengthen the cycle of out-migration, leaving such states bereft of their knowledge workers and lowering the motivation for profit-making corporations to invest in these locations.

This has, however, been changing in specific cities where centres of learning, corporate will and attractive location factors are fuelling clusters of industry in specific verticals. Bangalore in Karnataka has emerged as a hub for the IT industry and so has Hyderabad in Andhra Pradesh. Uttar Pradesh has world-class institutions like the Indian Institute of Technology (IIT) at Kanpur, Indian Institute of Management (IIM) at Lucknow and the Banaras Hindu University (BHU) at Varanasi, but has been unable to develop industries around these to harness the resident knowledge from these places and employ the graduates. The standards of state-level universities that attract local students must also be simultaneously raised while local employment opportunities are created.

Low-performing states need urgent intervention to progress
Some of the small and mid-sized states that do not fare so well need specific intervention. Chhattisgarh, Orissa, Gujarat and Nagaland have poor higher secondary school enrolments despite moderate and high GDP growth. Jharkhand, Punjab and Assam have low GDP growth rates and low school enrolment. Other than Nagaland, Punjab and Gujarat, these are also the states with low female literacy.

Rajasthan is on the cusp of both GDP growth and school enrolment. However, Rajasthan has surprisingly high government expenditure on education, showing that the state has prioritised education and is determined to cross over into a better performer in the next decade. States such as Chhattisgarh and Jharkand, which do not have a single university yet, need to urgently create the right infrastructure to raise their human capacity and attract investment.

Long-term benefits on the horizon
States need to focus on the benefits that education provides in the long term. A literate population results in controlled population growth rates over time. High-quality workforce will allow states to boost economic growth by focusing on more sophisticated and value-added industries and services instead of merely continuing to invite investment in basic manufacturing and service activities. The increased productivity that a trained workforce can deliver results in enhanced prosperity and better distribution of wealth, which are the ultimate goals of governments and private sector corporations alike.

Source: The Economic Times, December 25, 2010