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The toppers list

These are the poster boys of private enterprise in higher education. And even in the densely regulated segment, there are interesting business models that are paying off.
HIGHER EDUCATION
Market size
Private professional college: $7 billion
Engineering: $5.85 billion
Medical: $473 million
MBA: $731 million
Regulation
The central government has exclusive legislative powers for coordinating and determining standards in institutions.
Apex bodies such as the University Grants Commission (UGC), the Medical Council of India and others determine standards of education.
These are indirectly controlled by the Ministry of Higher Education and funded by the state governments.
State governments are responsible for the establishment of state universities and colleges and have the power to approve the establishment of private universities through State Acts.
 
Opportunities
According to the National Knowledge Commission, there’s a requirement for at least 1,500 universities.
Indians spend $4 billion a year on higher education abroad.
This represents a possible market if good quality institutes are set up in India.
 
Recent Developments
NIIT, HCL and Career Launcher plan to start universities.
RIL, Vedanta, Ashoka Buildcon, too, have proposed universities.
Govt likely to scrap ‘deemed’ university and grant regular university status.
Entry of foreign universities in India to be eased.

Going, going, gone: The days of distinguished greyheads as chancellors and deans, with scholarly tomes to their credit, appearing far-removed from monetary concerns. As the private sector and big bucks crowd the higher education sector, your typical dean today could be a guy in an Armani suit, who looks more like a gym-frequenting investment banker than an austere educationist.

And if you thought a university campus means grey buildings, unkempt gardens and stuffy canteens with raucous students ganging up over cups of tea and pakoras, check out the 60-acre sprawl of Amity University at Noida on the border of Delhi. High security gates open into a world of shopping malls (okay, there's just one) with cafés, bookstores and a L'Oreal saloon, and high-end sports facilities. Oh, nearly forgot to mention the superbly laid-out lecture rooms.

Keeping a watchful eye over all this are uniformed private guards with German Shepherds on leashes. And at the core, presiding over an empire said to be worth Rs 600 crore, is Ashok K. Chauhan, Founder President, Amity, who runs this as a "philanthropic venture". "We are dependent on bank loans and plough back earnings into the upkeep and growth of the infrastructure and welfare of our students," he says.

Down south is 69-year-old G. Viswanathan, Chancellor, VIT University, who is changing tack to keep pace with the times. His campus has over 1,000 international students. "We have even set up a special Chinese kitchen with a Chinese chef and ingredients imported from China," he says.

Welcome to the Great Indian Education Show, featuring the country's transformation from the no-frills world of gurukuls to that of airconditioned campuses ruled by the new-age tycoons. Forget what education should look like or who is providing it. Focus on the menu.

In a candid chat, Ashok Mittal, Chancellor, Lovely Professional University (more of the name later), which was granted university status by the Punjab government in 2005, recalls the bias he had to deal with. "When our case to get university status was being debated in the Punjab Assembly, a member actually commented that if sweetmakers began setting up universities, who will make the sweets?" Mittal, who belongs to the family that runs the famous Lovely Sweets House in Jalandhar and also has auto dealerships, is not offended: "If that were the case, no one can progress. Can only an IAS officer's son be an IAS?" he asks.

Ashok K. Chauhan, Founder President, Amity
Ashok K. Chauhan, Founder President, Amity
Amity University
ESTABLISHED: In 1991
STARTED AS: A school (Amity School) in Saket, Delhi
REVENUE: Rs 600 crore
FOOTPRINT: Noida, Lucknow, Jaipur, Chandigarh, Pune, Mumbai, Hyderabad, Chennai, Bangalore, Kolkata, London and Singapore
FEE: Rs 2.4 lakh to Rs 10 lakh (for full-time programmes)
EXPANSION PLANS: To be present in all Indian states
STUDENT STRENGTH: 60,000
STUDENT-TEACHER RATIO: 15:1

From Mittal's roots arise the tale behind that Lovely name for his university. "We registered first in 1999 under the banner of International Institute of Management. But our advertisements in the papers led to a poor response. A month down the line, in our ads, we mentioned that the institute was promoted by Lovely Group of Companies. Within three hours, our seats were full. People in Phagwara and Jalandhar know us and trust our name. So, we reregistered as LPU," he says.

And surely, time has afforded an opportunity to Mittal to answer his critics. "Earlier, we were affiliated to Guru Nanak Dev University, Amritsar and for our law courses, we would get only the second-rung students after the university got to take the first best 200 students. This year, the last batch of students, who are passing out from our law colleges under the old affiliation system, have outperformed the Guru Nanak Dev students," he says. His students have walked away with the gold, silver and bronze trophies for achievement. "We got the second-best (students), but they outperformed the achievers. This is thanks to our investment in faculty and the facilities that we offer," he says.

Control mindset
Among the many areas of debate around education reform is the question of mindset. As Kaushik Basu noted in his dissent note to the Yash Pal Committee's recommendations on reforming higher education in India: "Our main aim must be to nurture excellence instead of spending a disproportionate amount of energy trying to curb the lack of it."

N.J. Yasaswy, Founder member, ICFAI
N.J. Yasaswy, Founder member, ICFAI
ICFAI
ESTABLISHED: In 1984
STARTED AS: Institute of Chartered Financial Analysts of India with 700 distance education students
REVENUE: Rs 700 crore (estimated)
FOOTPRINT: Spread across the country. For B-school has 16 campuses
FEE: Varies depending on the course. It offers MBA, BTech, Law and CFA programmes. For B-school, it’s 6 lakh to Rs 9.5 lakh
EXPANSION PLANS: To open seven more private universities in the next three years
STUDENT STRENGTH: On-campus around 7,000 and a further 5,000 each year for distance education programme
STUDENT-TEACHER RATIO: 20:1

Basu, who is Professor of Economics at Cornell University, points out that the US has arguably the world's greatest universities, but also many sub-par ones. "The existence of the latter does not harm the reputation of the US as a nation of academic excellence. If there was a perfect way for the state to efficiently weed out the bad, I would be for it. But as we learnt from our experience with industrial licensing, often the effort to weed out the bad by using bureaucratic control can do more harm than good," Basu has written.

The current regulatory system surrounding higher education is hugely flawed. Not only does it make entry prohibitive, it also thwarts excellence. A FICCI report notes that universities are turning into examconducting bodies, content with collecting fees from colleges that are affiliated with it. The deemed university system has also spluttered, affecting players and students alike.

ICFAI was seeking a deemed university status in Andhra Pradesh, but it was granted only for its MBA programme and not for its BTech programme. Result: It had to shut down it BTech college in Hyderabad and Bangalore and students had to shift to Dehradun or Tripura where it has the university status. N.J. Yasaswy, Founder member, ICFAI, sees no wrong motive on the part of the institution, but apparently a victim of the regulatory environment. To what extent ICFAI is effective in addressing concerns remains to be seen. "We have a strong placement team that is now reaching out individually to companies," he says.

In 2005, the government had another go at addressing the problems of the crumbling education system. PM Manmohan Singh pushed for a second wave of institution building and excellence in education, research and capability building. The result was the National Knowledge Commission, which then came up with the startling finding that philanthrophic contributions in higher education have fallen from more than 12 per cent of the total expenditure on the system in 1950 to less than 3 per cent in the '90s. And why has this happened? Someone had decided that if a university finds a donor, it should be penalised through a matching cut in the grant in aid from the government.

G. Viswanathan, Chancellor, VIT University
G. Viswanathan, Chancellor, VIT University
VIT University
ESTABLISHED: In 1984
STARTED AS: A self-financing engineering and science college through a trust
REVENUE: Rs 500 crore (estimated)
FOOTPRINT: Vellore
FEE: Rs 30,000-1.55 lakh (excluding hostel fees)
EXPANSION PLANS: To open a university in Chennai
STUDENT STRENGTH: 15,000
STUDENT-TEACHER RATIO: 17:1

The redoubtable Ramdas M. Pai, Chairman, Manipal Education and Medical Group, and President & Chancellor, Manipal University, says the current maze of regulations helps only the dubious players. "On paper, there is regulation. But in implementation, it's corruption that rules. As a result, good institutions like ours are suffering. What we need are transparent regulations," he says.

Some reputable colleges have even decided to ignore the paperwork and focus on offering the best education. For example, SRM does not have the much-sought after and required stamp of the All India Council of Technical Education for its engineering college.

T.R. Pachamuthu, Founder Chancellor, SRM, claims that his infrastructure and faculty are big draws for students. "Once we are a university, we should be trusted by the government bodies, instead of having to waste our time hosting committees. Parents and students know of our placement opportunities," he says.

Sitting at the sprawling Symbiosis campus at Pune's Senapati Bapat Road, S.B. Majumdar, President and Founder Director, Symbiosis, says: "US President Barack Obama has proposed a $12-billion investment over the next decade in community colleges. India has just made a beginning. We want to be a major player in empowering rural youths." This is just a small area that is currently top of his mind even as he manages 34 institutes with over 45,000 students from about 60 countries.

So, where is the money to sustain the growth plans? Narayanan Ramaswamy, Executive Director and Head (Education Advisory), KPMG, feels that despite the stringent regulations surrounding higher education, there are many legitimate ways to profit from it. "Fact is that close to 75 per cent of the colleges are privately run (self-financing, etc.) and they make money through peripheral services such as canteen, sports facilities, convention centres and the like." Here the college either outsources these to a contractor for a fee, or charges for providing these services. They also earn extra by letting out their facilities or stadium land.

Ramdas M. Pai, Chancellor, Manipal Education
Ramdas M. Pai, Chancellor, Manipal Education
Manipal University
ESTABLISHED: In 1953
STARTED AS: Kasturba Medical College, Manipal
REVENUE: Rs 800 crore*
FOOTPRINT: India, Nepal, Malaysia, Dubai and Antigua
FEE: Rs 2.5 lakh for MBA, Rs 1.7 lakh for Hospitality Management and Rs 1.65 lakh for Architecture
EXPANSION PLANS: India and developing countries
STUDENT STRENGTH: 18,000+
STUDENT-TEACHER RATIO: 8:1
*Manipal Universal Learning

It is not uncommon to also find players benefiting from within their education model through various ways. Some institutions take pains to recruit top-notch faculty and encourage their staff to be involved with research and consultancy work.

"We have already filed for 121 patents in different areas," says Chauhan. The twining arrangements of colleges with foreign universities help these institutions earn a fee that does not come under the ambit of any regulation here. So, it's not surprising to see the rush towards collaborations.

The future?
The race to set up better, bigger colleges is also putting competitive pressure on private colleges, just as education experts feel it should, and create a more efficient system. "Today, it is a buyers' market. This year, 30,000 seats are vacant with 20,000 in management quota (in colleges affiliated to Anna University in Tamil Nadu). We can, therefore, only charge a reasonable fee as we have to actively market our facilities," says Pachamuthu.

After all, engineering colleges are coming up in other parts of the country and why would a student come down south unless there is a very strong USP? Point. Look at how Andhra Pradesh, which has the highest number of engineering colleges in the south, is countering the problem of excess capacity: "We are advising the universities to start more MTech and PhD programmes," says K.C. Reddy, Chairman, Andhra Pradesh State Council for Higher Education.

Competition, it appears, then can be the only true leveller.

With Anand Adhikari in Mumbai, K.R. Balasubramanyam in Bangalore, E. Kumar Sharma in Hyderabad & Nitya Varadarajan in Chennai.

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