Higher education in India comprises nearly 18,000 institutions. The majority of them are affiliated colleges that enrol 90 per cent students at undergraduate level and 66 per cent at the post-graduate level. India has the highest number of higher education institutions in the world — almost four times that in US and entire Europe and more than seven times the number in China. Many of the Indian institutions are non-viable, understaffed and ill-equipped; two-thirds do not even satisfy the minimum norms of the UGC. All this makes the system highly fragmented, scattered and difficult to manage. There is a strong case for consolidation.

The distribution of capacity across subject areas and at different levels is uneven. For instance, facilities for post-graduate education in medicine are grossly inadequate. While there is heavy demand for some courses, for many others there are no takers.

Public funding for higher education is small and unfairly distributed. Nearly one-third institutions do not get any government funds at all. Of the remaining, about half get some funding from central government, with only a handful of central institutions that cater to less than two per cent of the students getting 85 per cent of central funds; bulk of the higher education system depend on the state governments, most of them facing financial crunch. Pumping government funds in relatively better funded central institutions to accommodate additional quotas will further skew the public funding of higher education.

Faced with financial crisis, all institutions other than central institutions, and state institutions in Bihar and UP, have raised their tuition fees. Higher education in India is now increasingly expensive, beyond the reach of the poor. While the federal government in the US spends nearly $80 billion on higher education annually mostly in the form of students based financial support, India has allocated only about $3 million in 2005/06 for its flagship merit-cum-means scholarship scheme.

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