Abstract
This paper is an attempt to analyse the present pattern of funding higher education in India and to discuss the desirability and feasibility of various alternative methods of funding the same. Higher education in India is basically a state funded sector. But as higher education benefits not only society at large, but also individuals specifically, and as it attracts relatively more privileged sections of the society, there is a rationale for shifting the financial burden to the individual domain from the social domain.
It is argued here that given the resource constraints and equity considerations, financing higher education mostly from the general tax revenue may not be a desirable policy in the long run. Accordingly some of the alternative policy choices are discussed, including financing higher education from the public exchequer, student loans, graduate tax, student fees, and the role of the private sector. Among the available alternatives, it is argued that a discriminatory pricing mechanism would be relatively more efficient and equitable. While given the socioeconomic and political realities, the government has to continue to bear a large responsibility for funding higher education, instead of relying on a single form of funding, efforts should be made to evolve a model of funding that provides a mix of the various methods. It is also argued that fee and subsidy policies need to make distinctions across various layers and forms of higher education.
Article PDF
Similar content being viewed by others
Avoid common mistakes on your manuscript.
References
Azad, J. L. (1976). ‘Financing institutions of higher education in India: the need for a realistic policy’, Higher Education 5 (1), 1–7.
Azad, J. L. (1988). Higher Education in India: The Deepening Financial Crisis. New Delhi: Radiant.
Bhagwati, J. (1973). ‘Education, class structure and income equality’, World Development 1 (5), 21–36.
Birdsall, W. (1988). ‘Public spending on higher education in developing countries: too much or too little?’, Washington D.C.: World Bank New York: Rockfeller Foundation (Draft), August 23.
Blaug, M. (1982). ‘The distributional effects of higher education subsidies’, Economics of Education Review 2 (3) 209–231.
Blaug, M., Layard, P. R. G. and Woodhall, M. (1969). The Causes of Graduate Unemployment in India. London: Allen Lane the Penguin.
Debi, Sailabala (1988). Economics of Higher Education. Meerut: Anu Books.
Education Commission (1966). Education and Development: Report of the Education Commission 1964–66. New Delhi: Government of India [reprint dy1971].
Goel, S. C. (1975). Education and Economic Growth. Delhi: Macmillan.
Hansen, J. (1989). ‘Cost-sharing in higher education: the United States experience’, in Woodhall, M., (ed.), Financial Support for Students: Loans or Graduate Tax? London: Kogan Page, pp. 45–66.
Harberger, A. C. (1965). ‘Investment in men versus investment in machines: the case of India’, in Anderson, C. A., and Bowman, M. J. (eds.), Education and Economic Development. Chicago: Aldine, pp. 11–50.
Husain, I. Z. (1967). ‘Returns to education in India’, in Singh, B. (ed.), Education as Investment. Meerut: Meenakshi Prakashan, pp. 141–156.
Jimenez, E. (1987). Pricing Policy in the Social Sectors: Cost Recovery for Education and Health in Developing Countries. Baltimore: Johns Hopkins University Press.
Khadria, B. (1990). ‘Privatisation of higher education’, Mainstream 28 (24& 25), 25–26, 35; and 24–28.
Kothari, V. N. (1967). ‘Returns to education in India’, in Singh, B. (ed.), Education as Investment. Meerut: Meenakshi Prakashan, pp. 127–140.
Kothari, V. N. (1986). ‘Private unaided engienering and medical colleges: consequences of misguided policy’, Economic and Political Weekly 21 (14), 593–596.
Mathew, E. T. (1990). ‘Financing college education in the private sector in Kerala’, Economic and Political Weekly 25 (17), 943–954.
Nair, P. R. G. and Ajit, D. (1984). ‘Parallel colleges in Kerala: enrolment, costs and employment’, Economic and Political Weekly 19 (42–43), 1840–1847.
Nair, P. V. B. (1990). Costs and Returns of University Education. Trivandrum: CBH Publications.
Nallagoundan, A. M. (1967). ‘Investment in education in India’, Journal of Human Resources 2 (3), 347–358.
Pandit, H. N. (1972). Effectiveness and Financing of Investment in Education in India. Ph. D. Thesis. Delhi: University of Delhi.
Psacharopoulos, G. (1977). ‘The perverse effects of public subsidisation of education or how equitable is free education?’, Comparative Education Review 22 (1), 69–90.
Psacharopoulos, G. (1985). ‘Returns to education: a further international update and implications’, Journal of Human Resources 20 (4), 584–604.
Psacharopoulos, G., Tan, J. P. and Jimenez, E. (1986). Financing Education in Developing Countries: An Exploration of Policy Options. Washington D. C: World Bank.
Sanyal, B. C. (1987). Higher Education and Employment: An International Comparative Analysis. London: Falmer.
Schultz, T. W. (1981). ‘Achievements in higher education’, in Schultz, T. W. (ed.), Investing in People. Delhi: Hindustan, pp. 40–56.
Selowsky, M. (1967). ‘Education and economic growth: some international comparisons’, Economic Development Report No. 83. Cambridge: Harvard University (mimeo).
Shatrugna, M. (1988). ‘Privatising higher education’, Economic and Political Weekly 23 (5), 2624–2626.
Singh, A. (1985). Redeeming Higher Education. Delhi: Ajanta Books.
Singh, Nirmal (1983). Education under Siege. New Delhi: concept.
Stubblebine, W. M. C. (1965). ‘Institutional elements in financing of higher education’, Southern Economic Journal 32, July: Supplement: 15–34.
Tilak, J. B. G. (1987). Economics of Inequality in Education. New Delhi: Sage Publications.
Tilak, J. B. G. (1988). ‘University finances in India: a review of problems and prospects’, Higher Education 17 (6), 603–635.
Tilak, J. B. G. (1990). The Political Economy of Education in India, Special Studies in Comparative Education No. 24. Buffalo: State University of New York at Buffalo in collaboration with the University of Virginia.
Tilak, J. B. G. (1991). ‘Family and government investments in education’, International Journal of Educational Development 11 (1), in press.
Tilak, J. B. G. and Varghese, N. V. (1985). ‘Discriminatory pricing in education’, Occasional Paper No. 8. New Delhi: National Institute of Educational Planning and Administration.
Tullock, G. (1983). Economics of Income Distribution. Boston: Kluwer-Nijhoff.
Williams, G. (1990). ‘Changing patterns of finance’, OECD Observer No. 161, December 1989–January 1990, 8–10.
Windham, D. M. (1976). ‘Social benefits and the subsidisation of higher education: a critique’, Higher Education 5 (3), 237–252.
Woodhall, M. (1989a). ‘International experience of financial support for students: recent trends and developments’, in Woodhall, M., (ed.), Financial Support for Students: Loans or Graduate Tax? London: Kogan Page, pp. 67–84.
Woodhall, M. (1989b). ‘Loans for learning: the loans versus grants debate in international perspective’, Higher Education Quarterly 43 (1), 76–87.
Author information
Authors and Affiliations
Rights and permissions
About this article
Cite this article
Tilak, J.B.G., Varghese, N.V. Financing higher education in India. High Educ 21, 83–101 (1991). https://doi.org/10.1007/BF00132343
Issue Date:
DOI: https://doi.org/10.1007/BF00132343