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India's super rich educators

A new breed of philanthropists is changing India's education system.

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.