State of Higher Education in India

Investment in human capital has the potential to bring dynamism to our development journey and take our economy to higher echelons of inclusive growth. A focus on higher education, which is market-oriented and skill intensive, would not only provide employment to our 480 million plus workforce but would also address the problem of acute shortage of professional and technical manpower faced by industry. Besides, an emphasis on higher education would help in building sensitivity towards technology as well as increase efficiency and effectiveness of governance. It is in this context that investment in education, especially higher and skill-based education, is a priority for the nation.
A decade ago, India’s huge population was perceived to be its biggest problem and the main reason for the all-pervasive poverty in the country. Today, we have a different perspective. India’s population is now considered to be its biggest strength and is expected to be a source of competitive advantage. And the icing on the cake is that our population is primarily young; of its more than 1.26 billion strong population, close to 600 million are below the age of 35. If we can effectively capitalise on this ‘demographic dividend’, it can bring us great returns, economic growth and prosperity. But reaping the benefits of this demographic dividend is contingent upon the fact that we successfully put in place and execute a countrywide strategy so that higher education institutions adopt standards in sync with the market needs.
International studies have indicated that by 2020, the western world will be deficient in skilled manpower to the tune of 50 million people. As a result, the world economies would face severe labour shortages. And the deficiency would be felt more acutely in the skill and higher education segment. India is probably the only country that will have as many in excess. So, it is not unthinkable that someday, our largest export may be skilled and knowledge based human capital.
However, there is a huge gap between what can be done and what prevails today. While we may have a mammoth workforce, most people lack the relevant skills to do their jobs effectively at their workplace. In fact, according to the National Knowledge Commission Report 2006-2009, in the age group of 15-29 years, only 2 per cent have undergone any sort of formal vocational and professional training and only about 8 per cent have received non-formal vocational training. India needs to plan and train its workforce to be able to leverage this demographic trend.
There is a need for diversity in education system as majority of students end up taking regular streams. The option of exploring the possibility of courses which have higher employability hence becomes important. Vocational education imparts direct skills that help largely to build a career. Students are usually found to be skill deficient as the institutions do not make them job-ready. Due to this reason, there is a large number of skilled unemployed youth on one side and huge demand for skilled workers in the industrial sector on the other side.
Figure 1 shows comparison of the gross enrolment ratio in the tertiary sector in the year 2014. Tertiary education is defined as including universities as well as institutions that teach specific capacities of higher learning such as colleges, technical training institutes etc. The graph clearly shows that India lags behind the major global countries even though it is ahead of its South Asian neighbours in the gross enrolment ratio in the tertiary sector.


Current Situation in India

India has seen rapid growth in recent years due to robust macro-economic fundamentals and the growth in new-age industries. The rapid economic growth has increased the demand for skilled and technical manpower that in turn has highlighted the shortage of skilled and professional manpower in the country. India is among the top countries in the world where employers are facing difficulty in filling up jobs. The key reasons which comes in the way of finding a suitable candidate for available jobs in the country are lack of high quality professionals to suit job requirements, shortage of hard and soft skills, among others.

As per the International Labour Organisation (ILO) data, world-wide the percentage of employers who are experiencing difficulties in filling job vacancies continues to rise (Figure 2). Japan faces the highest difficulty in filling jobs at 83 per cent and therefore stands at 1st position. India stands at 7th position when it comes to facing difficulty in filling jobs. For India, the difficulty to fill up the jobs is 58 per cent, which is above the global standard of 38 per cent in 2015. The World Economic Forum (WEF) also indicates that only very few of the total Indian professionals are considered employable by the organised sector at a global level.


In response to the need felt for improving the institutions of higher education to cater to the growing demand, the number of universities/university level institutions & colleges have witnessed a tremendous increase since Independence. The number of universities has increased 34 times from 20 in 1950 to 799 in 2015-16. The number of colleges has also registered a jump of over 74 times over the period 1950 to 2016. In fact, the Indian higher education system is one of the largest in the world in the present time. But the Gross Enrolment Ratio (GER) in higher education of 24 per cent is still not adequate compared to international standards of average 30 per cent. Even with a 30 per cent GER, the larger chunk of the young population needs to take up vocational education and skill building.

To address this issue and to change the skills landscape of the country, the government has launched its flagship ‘Skill India’ programme which aims to impart skills to over 400 million people by 2022. The digital India initiative is promoting digital and financial literacy. To provide a spur to quality improvement, the government has launched its own ranking of higher education institutions, called the India Rankings which are based on the National Institutional Ranking Framework (NIRF). Public funded institutions are being given liberal funds to boost research. Some important initiatives in this area are ‘Impacting Research, Innovation and Technology’ (IMPRINT) programme under which IITs are being encouraged to undertake translational research and the Uchchatar Avishkaar Yojana which is meant to provide students with a market-oriented mindset.

However, there is still a lot which needs to be done in the area of bridging the gap between industry and academia, making research more relevant for industry and giving more autonomy to institutions. Faculty updgradation and spreading the use of technology inside institutions will lead to improvement in learning outcomes across the board. Till that happens, the output of higher education is not going to adequately address the needs of society and industry.


To sum up, we need to recognise that knowledge, skills and productivity of our growing young and dynamic workforce forms the backbone of our economy. To reap the benefits of such a young workforce, we need to implement the reforms in the education system and also bring forth new factors of production, namely knowledge, skills and technology which have the ability to breach the productive frontiers of the economy in the most efficient and dynamic way. Besides, the effort should be to make our education system meet the global standards, for which there is a need to focus on three major areas which are — infrastructure, quality of teachers and accreditation.

In the long-run, shaping of human capital can serve as a boost to the country’s economic potential. Thus, the implementation of skill based education is important to remove the gap between the large pool of educated unemployed population and demand for skilled manpower in industries.

In view of the importance of higher education in a country like India and the need for implementing reforms in this segment, this month’s Focus of the Month will cover insights on these two crucial aspects from sectoral experts.

Source: CII Economy Matters

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