PRIVATE PLAYERS: Sharda University and (below) ITM University chancellor Navdeep K. Dewan

Raghav Kaura was a tad worried. He hadn’t managed to get into some of the top-rated engineering colleges after finishing school. He was considering applying to some private institutes with deemed university status when he heard that some had been ordered closed by the Supreme Court but were operating after getting a stay on the closure.

That’s when he got to know about private universities in and around Delhi. He applied to some, joined one — and is now happily looking ahead.

For students going in for higher education, choice — or lack of choice — is no longer an issue. If they can’t get into state-run institutions, there are always the private deemed universities. And now private state universities (privately funded and managed institutions set up by Acts of state legislatures) are mushrooming as well (see box). Currently, India has 140 such universities.

The government had been quite liberal in handing out deemed university status to private institutions from the mid to late 2000s. But since 2010, after it clamped down on new deemed universities because many were not up to the mark, there has been a burgeoning of private state universities.

“Private players had found the deemed university route profitable. With that more or less closed, they have now taken this route,” says a University Grants Commission (UGC) official.

So what’s driving the rush? Demand, for one.

Pic: Yasir Iqbal

India will need nine million extra college seats by 2016 if it wants to maintain its current economic growth, estimates Karan Khemka, partner at Parthenon Management Consultancy Group, which unveiled a study on higher education earlier this year. “We need three times the number of universities we currently have,” says R. Narayanan, head of education at consultancy firm KPMG. Both believe private institutions will have to chip in to meet this demand.

State governments are actively encouraging private universities. Haryana and Gujarat have an umbrella legislation under which universities are set up, something that Maharashtra and Karnataka are also reportedly considering. The UGC, however, is insisting on a separate Act for each university as a condition for recognition. The university regulator does not want a repeat of what happened in Chhattisgarh between 2002 and 2005 when hundreds of universities were set up through executive orders issued under one Act. The Supreme Court ordered the closure of 112 of them.

Education is big business, which also explains the rush. For those already in the field, a university was a natural progression. Gurgaon-based ITM University started as an engineering college — the Institute of Technology and Management — in 1996. It could have applied for deemed university status after 10 years, but there was so much stigma attached to that category in 2009 that it was converted into a private state university instead.

For some, it is a logical extension of their existing business. Bengaluru-based staffing firm Teamlease Services noticed during the 2008 economic downturn that a majority of those who applied to it for jobs lacked the skills companies needed, and that it was securing jobs for only 5 per cent of them. In 2009, Teamlease acquired vocational training institute Indian Institute of Job Training.

But it soon realised that students preferred degrees to diplomas, even if the latter assured them of a job. That’s when the idea of aligning the vocational courses to a university was born. The Teamlease Skills University, which has received a letter of intent from the Gujarat government, is expected to feed Teamlease Services’ training and employment business.

For many others, education is a way of giving back to society. ITM University chancellor Navdeep K. Dewan, who spent a lifetime working for British multinational Imperial Chemical Industry, knew he owed his successful career to the education he’d got in India and wanted to do something in return. So he and some friends started ITM. It’s the same sentiment that drives businessman P.K. Gupta, chancellor of Sharda University, who used to supply equipment to engineering colleges, and to HCL’s Shiv Nadar and Wipro’s Azim Premji. The two IT company heads have also set up private universities — Nadar in Noida and Premji in Mysore.

For Suneel Galgotia, chancellor of Galgotia’s University in Noida, it was just another business opportunity. His urge to do something big saw him diversifying from his family’s iconic bookstore in New Delhi into publishing educational books and then stepping into education. He first set up a small institute for a master of computer applications course and then Galgotia’s College of Engineering and Technology in 2000.

The university was the next step. He had applied for deemed university status for the college but that was around the time the human resource development ministry had clamped down on new deemed universities. So he approached the Uttar Pradesh government for a separate private state university.

For many wanting a slice of India’s higher education pie, setting up such a university is preferable because it is faster and, more important, gives operational flexibility. Pramod Maheshwari, promoter of the Kota-based coaching centre Career Point, started an engineering college after he noticed that students were not clearing the IIT entrance exams and were going to second-grade colleges. But being affiliated to an existing university would not have given him the freedom to design a curriculum that was in tune with industry’s requirements. That’s why he set up the Career Point University in Kota (Rajasthan) and Hamirpur (Himachal Pradesh).

At the proposed Teamlease University, the programmes will be modular in nature — if a student gets a job after a six-month module, he can start working and return later to complete the degree course. The Shiv Nadar University plans to model the university on the lines of American universities, with around 10 different schools.

There’s some concern that private universities may become a haven for fly-by-night operators. Though Shalini Sharma, consultant, education, at the Confederation of Indian Industry, believes that dubious institutions are not more than 30 per cent of the total, the genuine players are worried at being tarred with the same brush.

“What needs to be done is to strengthen the regulatory framework,” says Amitabh Jhingan, partner at consulting firm Ernst & Young. The institutions have to conform to UGC regulations framed in 2003 on private universities and be inspected regularly.

But there’s little the regulator can do once a university comes into existence through an Act, says a UGC official. All that it can do is put up inspection reports on its own website and hope that potential students and their parents read them. A more stringent version of these regulations was sent to the HRD ministry in 2010 but is yet to be cleared.

Galgotia doesn’t understand what the fuss is about. “Is the quality of government institutions better? Proliferation and competition will ensure quality; not government diktats.”

Raghav Kaura and hundreds like him would be hoping he is right.

univ universe

Universities are set up by Acts of Parliament in the case of central universities and state legislature for state universities.

Till the early 2000s, only state-run universities were set up this way. Since then, state governments started allowing privately funded and managed universities, known as private state universities through this route.

Deemed universities are public or private institutions that have proven excellence for at least 10 years and are conferred that status by the ministry of human resource development in consultation with the University Grants Commission.