Financing higher education in India: principles,practice, and policy issues

Financing higher education in India has been a complicated problem due to theoretical and practical problems. It has been largely a state funded activity with about three-quarters of the total expenditure being borne by government. The shares of non-governmental sources such as fees and voluntary contributions have been declining. At the same time the needs of the higher education system have been growing rapidly. It is being increasingly realized that public budgets cannot adequately fund higher education, particularly when sectors of mass education are starved of even bare needs. Hence of late several policy proposals are made, including privatization. This article critically reviews these proposals, and argues that the Indian higher education system is not yet ready for privatization. At the same time the need for experimentation with several alternatives, including student fees, students loans, graduate tax, and privatization in general is emphasized.