The number of institutions and enrollment in higher education continue their rapid growth, but the quality of this education remains uncertain. A small number of state-subsidized institutions attract a thin top layer of talent from each year's cohort. High selectivity of admission to these elite institutions provides a screen valued by potential employers. Domestic and foreign demand for the services of these few thousand students has created an inflated reputation of the overall quality of India's higher education. The number of such graduates remains small relative to the population and the demands of India's economy for educated manpower. Reliable estimates of value-added by higher education, beyond the screening value of admission to elite institutions, are needed to assess colleges and universities, and to guide educational policy.

Graduate education - the seed farm of higher education and scholarship - continues in an alarming state of disarray with respect to both quality and quantity. Pressed by budgetary constraints, the government appears to have decided on profit-oriented privatization of higher education as the solution. Political and business classes, with significant overlap between the two, see higher education as a source of lucrative private returns on investment. There is little theoretical or empirical evidence that supports the prospects of success of a for-profit model in building quality higher education. Some recent proposals hold promise of radical reform and renovation, including regulatory restructuring. It remains unclear whether the government has the wisdom, determination, financing, and power to push reforms past the resistance from entrenched faculty and from the political and business classes.

This is an abstract of a longer paper available for download: Sunder, Shyam, Higher Education Reforms in India (June 28, 2010). Yale SOM Working Paper. Available at SSRN: http://ssrn.com/abstract=1652277