Seminar on Contemporary issue-4 On

Higher Education Reforms
Submitted to

INDUKAKA IPCOWALA INSTITUTE OF MANAGEMENT (I2IM) M.B.A PROGRAMME Institution of Charotar University of Science and Technology (CHARUSAT)

Presented by HARSH V. PATEL M.B.A Semester – I ROLL. NO. 09/MBA/29



I, HARSH V. PATEL hereby declare that the report on “Higher Education Reforms” is a result of my own work and my indebtedness to other work publications, if any, have been duly acknowledged.

Place: CHANGA Date: 16-12-2009 HARSH V. PATEL


According to the projection of the United Nations Population Division, currently young people between ages 15-24 constitute 18 percent of world’s population at 1.1 billion and the world is very close to reach the peak of historically highest youth population (Lam, 2007). These young people, across the globe, especially in developing countries, where the population density and growth is also highest, face unprecedented challenges in their capacity to access public resources and family resources, stemmed from waves of cultural and economic globalization. Most critical issues for youth development are poverty, health practices, gender biases, education, employment, social responsibilities and good citizenship, juvenile delinquency etc (World Youth Report, 2003). Demand of skilled workers in the knowledge economy has created hindrance for a large portion of world youth, especially in developing countries, where higher education system has not been able to realize sufficient ‘value addition’ in terms of enhancing the employability in the new age labor market. Noteworthy point is that, today’s youth find themselves in an era, where for the first time in the modern civilization, purely economic value of higher education has reached an unprecedented proportion. According to UNESCO, “higher education is no longer a luxury; it is essential to national, social and economic development”. Educational reforms, therefore, are more intrinsically tiedup with and can have stronger influence on the youth employment opportunities than ever before. Even more pertinent issue is that, while numbers and analyses show that the standard and accessibility of elementary and primary education have improved for most of the developing countries for the last two decades yet that success story has not led to a consequential fruition, as expected from a complete education, in terms of enhancing the employment opportunity or poverty reduction through self-reliance for today’s youth. The complex inter-relation between educational policies, pedagogical methodologies and job/labor market dynamics, therefore, presents us with many interesting facets, which are worth analyzing for identifying decisive pathways for the development of today’s youth, who are going to be the primary labor force of tomorrow’s world.

Background of education system

A significant portion of the world’s total youth population lives in India, which has 540 million people under the age of 25 and nearly 200 million between 15-25 years of age. In recent years (primarily after the liberalization of economy around 1991) the growth story of India has been colored with the shade of a near-fantasy tale. Have you heard the buzzwords with regard to India ‘burgeoning young middle-class population’, ‘booming IT sector’, or ‘vast pool of English speaking, science-educated skilled labor force’ around your morning breakfast, launch recess, evening tea, and weekend party? I am not surprised that you have. I just wonder whether you also have heard about some lesser known facts which are summarized as following,  84.5 million (highest in the world) young people lives under ‘extreme poverty line’ (less than US $1 per day) in India. That is 44.2 % of total youth population. (Source: World Youth Report, 2003);  44 million of Indian youth is under-nourished (again, highest in the world) which is 23% of the total youth population (Source: World Youth Report, 2003);  Gross enrollment percentage of youth in higher education is 7%, as compared to 92% in US, 52% in UK, 45% in Japan, 11.1% in all Asia, even 10.3% in all developing countries (Agarwal, 2007);  Largest percentage of unemployed population in India is educated youth. Most intriguingly, in stark contrast to the OECD countries, the share of unemployment increases as the average educational level goes up (Agarwal, 2007);  Organized job sector is appallingly low at less than 5-6%. Almost 95% of newly created jobs are still in unorganized sectors.

Educational reform

For proposing a pathway of meaningful educational reform, identification of the nature of the existing policies, their implications, and the inter-relation with employment market is of paramount importance. According to a 2004-2005 statistics (Agarwal, 2007), India has overall lower unemployment rate (9.2%) than European Union (9.5%), China (9.8%) or Brazil (11.5%). That is a creditable achievement considering the burgeoning population and limited industrialization in the country. The rate of unemployment among youth is quite larger than the overall national unemployment rate, which is actually a common trend for most of the nations in the world, developed and developing countries alike. The alarming trend for India, however, is the higher unemployment rate among high-educated youth and young people in urban areas. The lower youth unemployment in rural areas can be explained in terms of the largest labor share in agriculture (59.2%) as compared to industry (17.2%) or services (23.8%). Probably, the same reason can be cited for explaining the incidence of the lowest unemployment rate among young people without any formal education or with bare minimum elementary education. For example, a potato farmer, in a remote village of India, is not unemployed, nonetheless happy with his ability to read notices and bills (written in regional language) and do basic arithmetic necessary for rudimentary book-keeping.Clearly, the aspirations of half a billion youth for a better living standard and higher income jobs cannot be engineered by agricultural sector which accounts for 54% labor market but only 22% of GDP contribution. Keeping pace with the demand of globalized economy with shifting focus on knowledge-workers and skilled manpower

Age group Number of unemployed people per 1000 for various age groups in India India’s youth needs to be empowered with such a value-based education, which inculcates those necessary ‘employment skills.’ Directly in the field of employment, the ‘human capital theory’ asserts that investments in higher education and training enhance the degree of employability of youth by adding practical value to their repertoire of job skills. For India, we see a generally upward trend for the overall education budget over time, accompanied by a monotonically increasing share of primary education sector and an uneven pie for the higher education. Specifically, the post-secondary higher education is a largely neglected sector in terms of radical modernization and growth potential. Enrolment ratios in the school start dropping sharply after the primary education level, but even the handful of students, which make it to the post-secondary level, cannot get exposure to necessary skill enhancement pedagogy and instruction. For comparison, even China spends 2.1% of GDP in overall education (as compared to 3.3% for India), its secondary and tertiary enrolment ratios are 72.5 and 19.1 respectively, as compared to 53.5 and 11.8 for India. Historically, the apparent problem seems to be the improper structuring and absence of goal- oriented missions in higher education policies

Comparative performance in education (World Bank Cross-country Comparison Chart Tool, www.worldbank.org/kam)

education of science, arts, and commerce without much impetus in specialized technical, medical, or vocational training. There were few exceptions to this general norm however. The IITs (Indian Institute of Technology) and IIMs (Indian Institute of Management) were structured following the best private engineering and management educational enterprises of the west and consequently they bred the bunch of entrepreneurs and self-motivated youths who went to become successful industry leaders, or wealth-creators, in India and abroad. The unfortunate fact is that the student body in these elite institutes represents a micro-fraction of the society and cannot (and should not) influence the employment dynamics for the larger Indian youth in any meaningful way. The aimless expansion of higher education, without any feedback from industries, coupled with a restrictive regime of closed-market economy, inevitably resulted in huge unemployment rates among highly educated youth and the growth engine lost its steam significantly. Resource allocation level went down and pressed by the limited financial constriction the focus of the government shifted towards other priorities, leaving inefficient pedagogical machinery for educating a burgeoning mass of youth. Apart from the absence of goal-oriented approach, Indian education system has been plagued by overdose of bureaucracy and centralized control. During the expansion era of higher education, the number of degree-level colleges and their enrolment increased by significant amount (4152 in 1980-81 to 9906 in 1999-00) along with only a modest increase (206 to 349) in the number of universities (Geetha Rani, 2001), to which they are all affiliated. This created a huge burden on individual universities and slowed down their overall growth rate and seriously hindered any dynamic quality enhancement potential. Furthermore, lack of any autonomous decision-making power on the part of the colleges and their rigid affiliation to a parent university restricts them from implementing any dynamic change in pedagogical methods, training materials, evaluation systems or self-supporting mechanisms for resource generation. The affiliation mechanism and the rigid regulatory framework, although created to ascertain uniformity in educational quality, have rendered the entire process of educational reform inflexible and non- adaptive with regard to the demand from practical job market. Here also IITs and IIMs serve as the example as the only institutes with complete self-governance and autonomous decision- making authority which flourished to become lone centers of excellence enjoying the freedom from the iron grip of regulatory regime. Traditionally in India, public enterprise has been the

primary supporter of educational institutes with state government bearing almost 8090% financial burden and central government accounting for the rest (Geetha Rani, 2001). However, a radical transformation in the arena of key players for educational service sector began to take place after 1980-81. Numerous private enterprises ventured into the sector primarily responding to the demand from the industry.

An integrated approach for introducing educational reforms

An integrated approach for introducing educational reforms considering both organized and unorganized job markets in India. conditions. As per 2001 census, 61.6% labor force is engaged in agriculture as compared to 17.2% in industry and 21.2% in services. There are some continual changes with slowly increasing labor participation rate in services and decreasing share of agriculture with industry labor share remaining almost constant. India’s growth (in GDP terms or in labor participation terms) has followed a non-conventional trajectory of shifting the growth engine directly from agriculture to services almost bypassing the labor-intensive industrial or manufacturing sector. This has a far reaching implication in terms of absolute numbers of job creation because of lower labor intake of service sector as compared to industry. However, growth in services particularly enhances the employment opportunity for high educated youth (with at least a post-secondary degree) and in reality, India is slated to face a skill shortage in that sector due to low enrolment rate in higher education and absence of employability skills among the educated youth. The critical issue is, however, the low ratio of skilled to unskilled labor (Agarwal, 2007) in India (0.15) as compared to USA (0.54), Japan (0.22), UK (0.39) or Russia (0.39) which prohibits the growth of new skill- intensive and skillspecific job markets in the expanding knowledge-based economy. On the positive side, due to the sheer size of the labor population (and the expanding base of future labor population i.e. current youth), even that low ratio can translate to a formidable force, if correct policies are implemented and basic skills are imparted in right manner. The dominance of informal, unorganized sector is likely to continue in near future although organized sector adds much higher value per unit workforce input to the overall economy. Moreover, bulk of the high- educated youth (graduates and above) are currently employed or continue to seek jobs in the organized job sector. But, given the low gross enrolment ratio and the capacity limitation of the higher education system, informal sector will continue to be the employment base for the largest share of upcoming young labor force. Therefore, right policies have to be implemented which not only focuses on the high end skill development of formally educated youth, but also addresses the responsibility of providing informal and vocational education to youth with less formal education to help them achieve selfreliance and financial freedom. Let us now discuss the propositions for the necessary educational reforms to empowering Indian youth with right employment

skills and knowledge to participate in the local, national, and global economy in a meaningful manner. As mentioned before, due to strong coupling between the holistic education and job market dynamics, propositions may often be in the borderline between pure educational policies and labor market responsive measures or a blend of these two. The specifics are as following,

Various steps taken by government

Higher de-centralization of education governance and deregulation: This is a major step towards granting more autonomy to the degree-granting colleges and diploma-granting technical institutions allowing them to operate in an environment of more academic freedom. This will facilitate implementing adaptive curricula, flexible evaluation system, and specific goal-oriented rapid changes within the pedagogical process as and when necessary. The burden on the central universities will lessen as well as propagation of inertia from the decades-old, slow-acting education system, which can held back rapid, short-term developments, will reduce.

Enhanced focus on entrepreneurial, communication, and inter-personnel skill development: Emphasis on essential behavioral, communication, and entrepreneurial skills in classroom education is almost missing in India while these ‘soft skills’ continue to get the highest priority on the list of employers. And undoubtedly, acquirement of these skills helps an individual not only in job sector but also to be successful in social interactions and to practice good citizenship. Simple but highly effective measures could be a) teaching students about basic economic principles, constitutional laws, and social decrees and encouraging them to question the validity and applicability of the same, b) training young students in interpersonnel communication through idea presentation, group discussion on their favorite topic, group-based simple project demonstration, group and personal essay contests, etc., c) encouraging and rewarding students for independent thinking and problem-solving attitude and discouraging rote-learning tendency.

Increased public spending on informal, distance, and vocational education: For empowering youth from economically, socially or logistically disadvantaged areas or families (who has a high likelihood of being unable to avail formal education), greater emphasis on informal education should be placed. Distance education (in the form of E-learning, postal correspondence courses) can be a useful tool to educate youth in remote rural locations. Polytechnic institutes and craftsman training centers should be set up in greater numbers and existing ones should be upgraded with requisite material support. Recently, a study by National Council for

Applied Economic Research (Shukla, 2006) found that television is an overwhelmingly important source of information for Indian youth (and also for adults). This powerful and ubiquitous media can be utilized to create an information network which educate youth about career opportunities and modalities (for example information about public service job examinations, educational loan, self- financed small business initiative loan, basic usage of computers and electronic media and accessories, etc).

Locally and nationally integrated framework of informal learning and vocational training: To reduce the administrative and logistical cost of the large number of informal/ vocational education centers, an integrated networked body of teachers and administrators may be set up. Exchange program of students and instructors, where geographically feasible, should be encouraged to optimally spend the public resources for educating the youth. Mutual collaboration and knowledge exchange would automatically promote healthy competition enhancing the standard and shape their goal-centric education approach.

Creation of feedback loop-based structure within formal education for enhanced job market responsiveness: Upgradation and adaptation of pedagogical techniques and tools must take into account the feedback from the employment sector as to the needs of specific skills that are expected of the young students. Although exhaustive overhaul of the formal textbook curricula may be slow and impractical (given limited resource allocation for the educational sector) semi- formal methods can be employed for greater interaction and transparency between industry and

Integrated counseling, evaluation, and career guidance initiatives: Public or private institutes alike, the necessity of proper guidance to the student for helping him/her choosing right career need not be over-emphasized. This process should begin at the pre-selection phase of a professional course and should continue throughout. The young mind, which is being educated, has a right to know the purpose of that very education in a practical world scenario and counseling could be that window through which he/she sees the educational exercise in its fuller perspective. This practice can be implemented in an integrated framework, involving multiple institutions to set up an umbrella body for advising students on multidisciplinary career perspectives. In a deregulated academia, this integrated approach can be all the more effective to help discrete centers of education and learning to contribute in a holistic manner to the greater cause of youth development. Integrated evaluation process (for example a common skill test across the country in a particular field leading to a certification) will help immensely the discrete bodies of the deregulated academia to self-evaluate their quality of instruction. Standardization of universal evaluation method will also give much confidence to the industrial employer in hiring a young graduate. To provide financial resources for these reforms a combined effort is much needed where public expenditure is optimized, burden of excessive regulation on private investment into public institution is relaxed, and self-financing measures are encouraged and given high priority. The shares of sales and services and endowment in USA higher education public expenditure are 22.6% and 5.3%

respectively (Kapur, 2004). These numbers for India are 0.43% and 0.0% (probably the author could not compute the fractional percentage)! Even a moderate increase.


For India, the issue of youth employment and associated educational reform is highly critical because of her extremely diverse scenario of youth development. This is a country, whose young scientists, technocrats, and business executives demonstrate highest level of excellence and commitment in diverse professional fields and command highest level of respect among peers and employers, all around the world. This is also a country, where 84 million youths do not get sufficient food for nutrition after a day’s hard work. But this diversity is at the essential core of this nation. For more than four thousands years, this nation has progressed through unimaginable diversity of language, culture, religion, caste, creed, and socioeconomic stratifications. She can handle this one too. World’s largest democracy is still a treasure-trove of human resources. And, youth is unquestionably the lifeblood of that society. Half a billion young people in this country aspire for a better living standard, for quality education, healthcare, and family resources. Government, lawmakers, politicians, industrial houses, social leaders have huge responsibility to empower these youth for self-sustainability. It is a difficult task, but not impossible one. Sincere analysis of the situation, honest policy formulation, rapid deployment, and integrated effort can gift Indian youth a nation.


1. Agarwal, P., Higher education and the labor market in India, 2007. 2. Geetha Rani, P., “Economic reforms and financing higher education in India”, National Institute of Educational Planning and Administration Report, 2001. 3. Kapur, D., Mehta, P.B., “Indian higher education reform: from half-baked socialism to half- baked capitalism”, Center for International Development Working Paper, No. 103, Cambridge, Massachusetts, 2004. 4. Lam, D., “The demography of youth in developing countries and its economic implications”, World Bank Policy Research Working Paper 4022, included in world development report, 2007. 5. Ray, S. and Chand, R., Socio-Economic Dimensions of Unemployment in India, NSSO, New Delhi. 6. Shukla, R., India Science Report, National Council for Applied Economic Research, 2006. 7. World Youth Report, United Nations, 2003.