Integrating higher education: Why govt policy must differentiate and support private universities

Every Union Budget is a moment when sectors ask whether public policy is aligned with the future the country is trying to build. This year, as government attention rightly centres on technology and artificial intelligence, higher education warrants closer scrutiny. India’s ambitions in technology, healthcare, research, and innovation will ultimately be shaped by what its private universities are allowed and enabled to become.

India has committed to raising its Gross Enrolment Ratio (GER) to 50% by 2035. Today, higher education enrolment stands at about 4.3 crore students, corresponding to a GER of 28.4%. Achieving the target implies a system serving roughly 7.6 crore students, an addition of more than 3 crore learners in just over a decade.

That arithmetic leads to an unavoidable conclusion that India cannot meet its higher-education goals without private universities playing a role. The more important question, however, is what kind of private universities this expansion will produce.

When expansion runs ahead of differentiation

India has encountered this dynamic before. In the late 1990s and early 2000s, private engineering colleges expanded rapidly to meet demand from the IT sector. Access grew quickly, but differentiation was weak. Most institutions prioritised early financial self-sufficiency over academic depth, and the system eventually corrected through consolidation and closures, often at significant cost to students and society at large.

The lesson was that rapid expansion without credible mechanisms to assess and reward quality creates an opaque marketplace, in which students bear disproportionate risk.

Beyond supervising compliance

That risk now confronts the private university sector at a much larger scale. While policy has enabled the establishment of private universities, the system continues to treat them unevenly. Often through broad-brush regulation that does not adequately distinguish between institutions with very different missions, governance standards, faculty strength, and research ambition. Treating all private universities as broadly equivalent is likely to constrain the strongest among them while allowing weaker models to persist.

India’s challenge, therefore, is the absence of systematic differentiation among them. The real divide is mission, not ownership. Globally, quality in higher education is not determined by whether an institution is public or private. It is determined by intent and delivery.

Mission-led universities, public or private, are built as long-term academic projects. They invest early in faculty and research, absorb losses in their formative years, and accept that credibility is earned slowly. Transaction-driven institutions operate on a different logic which includes rapid cost recovery, aggressive enrollment growth, minimal academic investment, and a compliance-first relationship with regulation.

If India wants private universities to evolve into genuine academic institutions of quality and depth rather than remain teaching-only providers, policy must begin recognising and reinforcing missions rather than merely supervising compliance.

What serious systems have done

Among large and diverse higher-education systems, the United States offers the most relevant reference for how research capacity and quality institutions are built and governed. Federal research funding there flows competitively across universities and is tightly regulated for integrity and accountability but not pre-restricted by ownership or institutional age.

Universities such as Harvard, Stanford, MIT, Johns Hopkins and Caltech emerged as leading research institutions despite being private because they demonstrated faculty depth, governance capability and sustained research performance. Access to funding was earned through peer review, and continued support depended on outcomes.

The scale of investment is of course significant. Government expenditure on education in the United States typically amounts to around 5.4–5.8% of GDP, above the OECD average, reflecting long-term support across all levels of education. Research funding forms a critical part of this commitment. According to the latest Higher Education Research and Development (HERD) Survey released in December 2025, in FY 2024, U.S. universities reported about $117.5 billion in research and development spending, with federal funding accounting for roughly $64 billion, or about 55% of the total. Public funding enabled laboratories, doctoral pipelines and faculty ecosystems to scale, while rigorous oversight ensured accountability. Institutions that under performed lost access; those that delivered grew.

India’s approach remains more constrained. Overall education spending broadly falls in the 4–5% of GDP range, while research investment alone remains far lower, around 0.6–0.7% of GDP, compared to roughly 3.5% in the U.S. and large-scale research capacity continues to be concentrated in public institutions. Eligibility is often determined by institutional category or age rather than demonstrated capability.

Lessons from industrial policy

India has confronted a similar challenge in other strategic sectors. When manufacturing capability became a national priority around 2020, the state recognised that regulation alone would not deliver results. Production Linked Incentive schemes were designed to identify firms and selectively back capability over time, with public support tied to performance and scale.

The relevance for higher education is direct. Building serious research universities public or private requires selective access, sustained public funding besides rigorous accountability, aligned to demonstrated capability.

India’s ambition of becoming a Viksit Bharat by 2047 will ultimately be powered by the strength of its institutions as they shape talent and generate knowledge that shapes development.

The policy choice ahead

The coming decade will be decisive for Indian higher education. Three shifts deserve attention. First, government research funding should be allocated on the basis of demonstrated capability and academic intent, irrespective of ownership, with rigorous review and accountability. Second, national capacity-building schemes such as the Prime Minister’s Research Fellowship (PMRF), and Prime Minister Research Chair (PMRC) Scheme should be open to all high quality institutions. Third, India should consider a higher-education analogue of the PLI framework, selectively backing universities that commit early to faculty, doctoral programmes and research infrastructure, with support tied to outcomes.

Whether India builds universities equal to its economic and technological ambitions will depend on what it enables and incentivises now. Expansion is inevitable; differentiation is a policy choice.

(Prof. Rudra Pratap, Founding Vice-Chancellor, Plaksha University)

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Published – February 04, 2026 04:20 pm IST