From Free Access to Free Market: The Rise of Private Indian Universities

The number of private Indian universities is not rising – it has soared to the sky. The 1980s saw the establishment of only one such institution, and so did the 1990s. By comparison, the last 22 years (2000-2022) witnessed the inauguration of 428 private universities in India. 

The number is expected to climb even higher with the further liberalization of government rules on private institutions of higher learning. For instance, in 2023, it was announced that foreign universities will be allowed to open campuses on Indian soil. But the growth of India’s higher education market is much more about the rising demand than the liberalized rules of supply.

Even a quick glance at the reality of these new universities shows that much of their growth represents a trend of Indian higher education sailing out to the waters of the free market. It seems that science subjects, such as engineering, dominate the curriculum options, though humanities are not completely missing. Some of these new institutions arose in rural areas outside Delhi, rather than within the city, probably due to Delhi’s impossible real estate prices (it takes immense capital to build in India’s capital). These universities, however, also mostly boast posh campuses spreading over swaths of what was recently agricultural land. Everything about them screams: “We are the new money.”

It is equally apparent that these new private universities often spring up as investments of large companies. For instance, the GD Goenka University was established by a family of industrialists, the Goenkas; BML Munjal University was created by another such family, the Munjals (mostly known for motorcycle manufacturing); the Jagan Nath University is named after a businessman dealing with oil processing – and the list goes on. In other words, many of these new institutions represent a new field of investment by India’s most powerful companies; they are an addition to a wide portfolio of dominant industrialists.

But while the numbers quoted in the first paragraph may be stunning, the reasons behind this revolution are not so rosy. It seems that what is now happening with Indian universities is a repetition of what already happened with primary and middle schools. Over the past few decades, India witnessed a remarkable shift from public to private education because a great many government schools fail to deliver.

India’s elites have long been enrolling their progeny in private institutions. Gradually, the process began to encompass the middle classes, and even the lower-middle classes, as private players began to establish budget private schools that charge comparatively low fees. With this, hundreds of thousands of new private and middle schools mushroomed in India especially since the liberalization of the country’s economy in 1990s. 

The data for 2021-2022 academic year suggest that there are still more government-managed schools in India than private ones (68.7 percent to 31.3 percent, respectively) out of a total number of 1.5 million schools. However, the percentage of private schools is gradually growing while that of public ones is decreasing. 

Second, the proportion alone does not reveal the socioeconomic reality. With a bit of generalization, it may be said that it is the children of poor people who attend government schools (apart from a small number of high-quality public schools), while those who can afford it have shifted to private institutions. In rural areas, government schools face less competition (though even there one finds cheap private education institutions), while in large cities, they are completely overshadowed by their private equivalents. In places like Delhi, there are already more private schools than public ones. This is not because the state wants it, but because it has been unable to reform and expand the network of public schools. 

Now, the same process of the richer layers of society moving from the public to the private sector seems to be occurring in the realm of higher education. Again, Indian elites did so long ago, and now the process is expanding down the rungs of the economic ladder. These hundreds of new universities – with their sprawling campuses based outside major cities, where it is next to impossible to reach without a car, and their flashy websites only in English – seem to be catering to the country’s new, growing middle classes. But over time, we may well see the rise of a host of cheaper universities aimed at attracting the lower-middle classes.

And it is not only about a shift from public to private, but one from India to overseas. When Russia’s brutal, full-scale invasion of Ukraine began, there was a need to evacuate over 18,000 Indians from the attacked country. Most of them were students – and most of these were medical students. One of the main reasons why so many of them were studying in Ukraine is that there aren’t enough slots at India’s own universities to study medicine – combined with the fact that studying in Ukraine was cheaper than in the EU or even Russia (and quite likely cheaper than studying at elite universities back in India). 

The whole process will thus likely yield both positive and negative results. Indian higher education will strive toward higher quality and there will be more places to study to choose from – though at first, these will be accessible only for richer Indians, who already have more options than everyone else. Many Indian public universities may be stagnant in comparison to what is happening in the private sector, but at least they admit more students from the poorer sections (through the reservation system). The world “university,” after all, comes from the Latin universitas, meaning “whole,” and such an institution should ideally strive not only to present the whole of knowledge, but also be open to all. Now, it would seem, from the ideal of free access, the pendulum will swing toward the free market. 

Yet, undeniably, this tremendous growth of India’s higher education system currently represents a massive opportunity for investors – both Indian and foreign ones – but also for universities in other countries that wish to attract Indian students. This may as well be a new golden mine for institutions in places like Europe, where schools and universities are being threatened by demographic decline.