India's super rich educators

Photo caption: Using their own fortunes, India's new millionaires are re-inventing higher education. (Indranil Mukherjee/Getty Images)

NEEMRANA, India — Bright-yellow mustard fields line the roadside along National Highway 8, about three hours from New Delhi in the state of Rajasthan. In the distance, tiny plumes of smoke float into the sky from the mud huts of local farmers.

For a hundred miles, the silence is broken only by the long-haul trucks, whose blaring horns discourage stray dogs and livestock from darting into their paths.

Then, suddenly, the towering tollbooths of a 12-lane expressway loom on the horizon, transforming the rustic Gandhian idyll into a scene straight out of the American Midwest.

Just a few miles from here, up a pristine blacktopped road, is the 100-acre NIIT University. Founded by two multimillionaires who earned their fortunes through a successful multinational computer-training and consulting company, NIIT represents a new kind of university sprouting up across India — one generated through private philanthropy.

Rajendra Pawar said he and Vijay Thadani started NIIT University after it became clear to them that the Indian government does not have enough money to take on the myriad challenges facing the country's education system. Their company, also called NIIT, has a 29-year history in the region and is well-known across Asia, the Middle East and in many African countries as a reputable provider of industry-ready computer education.

"We were in search of a new problem and we realized India lacks a self-sustaining model of higher education and started thinking about creating such a model," Pawar said.

He adds that if India does not do something about its shockingly low college-enrollment rate — it now stands at just 12 percent — "it will be a time bomb that will explode on us a few decades down the line."

In the last decade, a rising stream of wealthy industrialists like Pawar and Thadani have started up a few of the 1,500 universities that education experts estimate India will need to fuel its economic growth.

With deep pockets and solid reputations, these business executives promise to revamp the reputation of private higher education in India by offering better pay to faculty members, setting high academic standards and tailoring programs to industry needs.

They also hope to offer an alternative to what they see as a misguided public higher-education system, in which students are encouraged to think narrowly and learn passively.

"According to industry, of students coming out of universities currently only 10 percent are employable," said Pawar. Even the better students don't have a well-rounded education, he added.

Many of these new institutes offer just a handful of undergraduate degrees in industry-focused fields such as engineering, or graduate programs focused on management education. But most plan to scale up to become multidisciplinary universities.

To build a comprehensive university with up-to-date equipment and facilities requires space, however. And many of these new campuses are being built in suburbs outside major cities, close to industries in which their graduates might one day work.

NIIT is no exception. Capitalizing on Rajasthan's desire for a "knowledge corridor" similar to Route 128 in Massachusetts, Pawar and Thadani persuaded state officials to build the road and develop the electricity connections from the main expressway that they needed to create their institution.

Built as a walking campus, the university's fresh, airy buildings follow the site's natural ups and downs and are built of the vibrant red brick taken from the stony ground of the site itself.

Most classrooms have views of the hills. One of the natural depressions in the site has been developed as an amphitheater and another will be the sports arena.

"People said, My God, to level it will cost a lifetime,” Pawar recalls. "I said, why level it? This is an opportunity do something with this crazy land."

The university opened last November with 29 students and offers three engineering undergraduate degrees, a master's degree in educational technology and a doctoral program in biotechnology.

This September the university plans to enroll 450 students and eventually aims to house as many as 7,000.

Within the next 10 to 12 years, said Pawar, the university will develop a range of programs to provide students with a broad base of knowledge.

"A mechanical-engineering student will also study some literature and social sciences. And a psychology student will also study some mathematics and economics because it is important," he said. "We believe that in the 21st century, setting the distinction between science and the arts has to go."

Meanwhile, demand for higher education in India continues to outpace supply. The $20-billion private higher-education sector is expected to grow rapidly in the next few years, according to Amitabh Jhingan, partner and education leader at the New Delhi branch of Ernst & Young, the accounting and consulting company.

Although the federal government has increased its higher-education budget by an unprecedented 40 percent, the public sector is unlikely to be able to grow quickly enough to absorb all the students who hope to attend college.

One industry group estimates that the country needs another $48-billion for higher-education development — yet the federal higher-education budget is only $3.1-billion.

In recent years, much of the growth in private higher education has been among academically mediocre engineering colleges and other institutions that critics say focus more on making money than on providing a quality education.

Some education observers say the new start-ups promise a different model. Founders are motivated not by greed, these experts say, but by patriotism, or perhaps just ego.

"For these guys, education is not a business, and they would continue to support it even if operating expenses aren't covered," said Pawan Agarwal, a senior civil servant and author of "Indian Higher Education: Envisioning the Future."

To be sure, these new institutions are unlikely to solve the many problems facing India's education system. And they may well remain boutique management and engineering schools. Some may even fall short of expectations in a fast-changing India. One particularly challenging problem facing all universities here, public and private: a nationwide shortage of well-qualified faculty members.

"These universities are and will definitely be better than government colleges and colleges started by politicians wanting to make money," said P.V. Indiresan, former head of the Indian Institute of Technology, in Chennai. "But they are all still teaching institutions. Even if their goal is to become a research institution, where is the faculty for it? So it is difficult to answer how good they will become."

Yet backers, and some observers, are hopeful that they could inspire other wealthy people, of which India now has many, to invest in education.

And by raising academic standards, the new universities may raise the bar for all private institutions.

"They are keen on ensuring that the hanky-panky that happens in the other institutions doesn't happen here because it will dilute the brand of their main companies," said Agarwal.

These enterprises are certainly not cheap. The first phase of NIIT's development will cost $21.7-million, according to Pawar. By the time it is complete, in about a decade, the total cost will be close to $44 million.

Pawar said he and Thadani will absorb nearly all expenses during the first few years, after which they will look for contributions from other sources like wealthy individuals.

Undergraduate students at NIIT pay annual tuition of about $8,000, including housing. Graduate students pay about double that.

It is a hefty price. Undergraduates at India's premier higher-education institutions — the Indian Institutes of Technology — pay only $1,600 to $2,000, including housing.

In about five years, Pawar said, research output should also be able to help support the university, once its doctoral students start undertaking projects for government and industry in computer science and engineering, educational technology, and bioinformatics and biotechnology.

In about a decade, he said, the university's income should be enough to cover its expenses. If that doesn't happen, the founders are committed to keeping the enterprise going with their personal money, donations, and, if necessary, bank loans. Any additional revenue will be reinvested into the university.

A number of these new start-ups have attracted high-caliber faculty members, in part because the salaries are more generous.

"All the people we've hired have finished their Ph.D.s in the last five to seven years and all are making more than 100,000 rupees [$2,174] a month," said Bakul Dholakia, director of the Adani Institute of Infrastructure Management, which was created by Gautam Adani, chairman of the $5-billion Adani Group.

Professors at India's public universities, by contrast, may make only $800 a month.

"That's why I have 300 applications for teaching positions," said Dholakia, former director of the elite Indian Institute of Management in Ahmedabad.

And even as public universities struggle to modernize their academic programs, some of the start-ups are introducing teaching methods still rare in India.

The Adani Institute of Infrastructure Management, which started a one-year master's program in September, sent students on a two-week trip to China, Indonesia and Malaysia to study a variety of infrastructure projects.

At the LNM Institute of Information Technology, which opened six years ago, students are given one year to explore different engineering subjects before they choose their major, a practice unheard of in India.

NIIT freshmen study from a syllabus fashioned by industrialists and academics, and interact with industry professionals in their first year.

Students are also required to perform community service, which might include planting trees in the difficult terrain or tutoring children from nearby villages.

For its first class, NIIT was able to woo candidates away from some of India's reputed, government-recognized engineering colleges even though it did not gain government recognition until after the academic year started.

"It not being recognized was not scary at all," said Yajur Mahendru, who some professors call "pioneer brave heart" because he was the first student to be admitted.

Several students said they were sold on the university because of the strength of the company and its solid reputation in India and abroad.

Even Pongsakorn Sukjunnimit, a Thai student who got a scholarship to come to India to do a computer engineering degree course, chose NIIT University -- after doing a year of English language training in Delhi -- because he found the syllabus more innovative and industry focused and because he knew about the well-respected NIIT brand. "I had heard about NIIT before because it is also in Thailand as a computer training company."


India's New Higher Education Moneymen

Here is a short list of some of the millionaire Indian businessmen who have started, or plan to start, universities:

Karsanbhai Patel, chairman of the $660-million consumer-goods corporation Nirma Limited, started what's now the multidisciplinary Nirma University with the Institute of Technology in 1995.

Shiv Nadar, founder of the $5-billion computer giant HCL Technologies, began two now highly-reputed engineering schools in 1996 and 2001. He will soon start a university.

Sushil Ansal, chairman of the Ansal Group of Companies, a $76-million real-estate group, set up the Ansal Institute of Technology in 2000.

The now-estranged billionaire brothers Anil and Mukesh Ambani, scions of the Reliance empire, started the Dhirubhai Ambani Institute of Information and Communication Technology in 2001. The institute is now run by Anil Ambani. Mukesh Ambani, India's richest man and chairman of Reliance Industries Ltd., plans to start a multidisciplinary university with his Reliance Foundation. He has pledged an initial contribution of $100-million and plans to increase his commitment to more than $200-million.

The steel magnate Lakshmi Mittal, chairman of the $125-billion Mittal Steel, in 2003 founded the LNM Institute of Information Technology. It is slated to become a full-fledged university.

Gautam Adani, chairman of the $5-billion Adani Group, started the Adani Institute of Infrastructure Management in 2009. In 2011 it will most likely become a university.