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1950 (Kharagpur) and 1961 (Delhi), the government of India set up five Indian Institutes of Technology (IITs) in India. Thereafter, in 1995, a small IIT was set up as a sop in Guwahati and then in 2001, Roorkee University was upgraded to an IIT. We set up five IITs in the Nehru years and two in all the years thereafter. If we had just kept up the earlier momentum, we would have had 25 IITs right now and not seven. In any case, in the last five years, not a single IIT has been established in India.

This, despite the fact that about 2,00,000 children write an exam to enter the IIT under-graduate programme and only 2%, or about 4,000, get admission—tougher than the ratio for Harvard or Princeton, where 10-15% of applicants qualify. Many children spend over a year in coaching institutes after they complete high school to just prepare for this exam. While it may be okay for the parents of children qualifying for the IITs to provide these statistics to boast about the brilliance of their kids, the statistic, in fact, is a very sad commentary of what an impaired government policy on education institutions has resulted in.

There is a surging demand for the skills an IIT imparts and no supply side response. It cannot be an issue of funding, because if the government is strapped for funds, these institutions could raise funding directly—their alumni alone would be able to provide billions of dollars. India needs 50 IITs, 100 regional engineering colleges (RECs) and many great colleges to support the needs of the growing economy.

The needs of India are not going to be met by 4,000 IIT graduates coming into the market each year. The staggering and heart-wrenching statistic is that of the 30 million children who enroll into primary school, only three million complete high school. Twenty seven million children are falling through the cracks. We need to get more children to complete high school, more to graduate and more to graduate from top academic institutions.

There is another angle to this too. Education can be a huge business opportunity for India. Currently, I find very few, if any, foreign students studying in an Indian IIT. On the other hand, about 110,000 Indian students go abroad to study—about 80,000 of these go to the US. There are about 6,00,000 overseas students studying in the US. The cost of good education in the US does not come cheap—in universities like Princeton and Harvard, under-graduate education itself costs $50,000 a year, or Rs 1 crore for a four-year degree programme.

The US is the clear leader in the education business. In fact, I would surmise that there would be 40 American universities among the top 50 in the world. Currently, a fully loaded IIT education costs about $3,500 and students pay about 20% of this as fee—the rest comes as government subsidy. Thus, there is a big opportunity to provide education in India as a business opportunity clearly as big as any the BPO industry offers. Australia, I read somewhere, earns about $18 billion from education.

The fact is that the paucity of seats is a self-inflicted ailment. We could offer similar quality education in India at a fraction of the cost. Just 1,00,000 students at $ 10,000 per head would be a billion dollar opportunity for India.

A cursory glance through the brochure of most US university engineering departments will look very brown! The proportion of Indians in the mathematics and economics departments is similarly high. We need to consider how we might attract many of these Indians back (possibly higher pay and better infrastructure!) to teach in our top notch IITs and other quality academic institutions.

Thus, instead of IIMs setting up campuses abroad, we need on a war-footing to increase the number of top quality institutions in India so that we have children from other countries coming to India to study and the education business works to India’s advantage in an increasingly knowledge-based society of the future. The current apathy needs to end.

Source: The Financial ExpressMore