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Why India's education system is losing out...

A K Bhattacharya in New Delhi | November 25, 2008

In 2007-08, India sent over 94,500 students to American universities. They accounted for 15 per cent of the total international students' population in the United States. Yes, this is one area where India beats China, which sent a little over 81,000 students to the US in the same year.

That lead, however, will soon be lost. The number of students China sends to American universities has been rising rapidly. In 2007-08, it rose by 20 per cent, while the growth in the number of students from India was lower at 13 per cent. Experts believe that in a year or two, India would lose the number one position, it has held for the last seven years, to China.

South Korea is not far behind. The number of South Korean students in American universities rose by 11 per cent to a little over 69,000 last year. The countries that are sending fewer students to the US are Japan, down by 4 per cent to 34,000, and the United Kingdom, which last year saw a 1 per cent drop to only about 8,367 students.

That should be an interesting global trend for college education in the United States, as indeed the data came from an authoritative survey of 3,000 American universities, conducted by the New York-headquartered Institute of International Education. But for the Human Resources Development Ministry in New Delhi, there are more interesting lessons to be learnt from the survey and its findings.

For instance, the total annual expenditure incurred by all international students on their education, including tuition fees and living expenses, is estimated at about $15.5 billion. In other words, Indian students spent about $2.36 billion, or Rs 11,800 crore (Rs 118 billion) at today's exchange rate, on their education in American universities.

You might argue that this amount may be an over-estimation because many students from India may have gone to study at these universities after obtaining scholarships, which are often quite generous. Indeed, the IIE study points out that about 62 per cent of the international students receive funds to be spent on education in the US from their personal and family sources. If that is the case for Indian students also, then the total spend by Indian students from their own pockets would be about Rs 7,300 crore (Rs 73 billion).

Even that is a huge amount. Irrespective of a student getting a scholarship or not, the cost of an Indian student in an American university is estimated at over Rs 12,40,000 (Rs 1.24 million), going by the IIE data. This expenditure level is likely to go up in the next year or two, as the Indian rupee depreciates.

But the point to be noted is that there are over 94,000 families in India which are willing to spend on average Rs 12,40,000 (Rs 1.24 million) a year on their children's education. The question the human resources development ministry should address is whether its policies have failed to tap into this huge potential.

An estimated expenditure of Rs 11,800 crore (Rs 118 billion) on college education is not a small amount. The reason why several Indians are willing to spend that money is because there are very few quality educational institutes in the country and those that are available can admit only a few thousand students every year.  This money, therefore, would not have been spent on American universities if only the government could create conditions within the country that were favourable to setting up a large number of quality educational institutes which could then attract many of those Indian students who are otherwise opting for American universities.

All that the human resources development ministry has done so far in the last few years is to talk about its grand plans to set up more Indian Institutes of Technology and Indian Institutes of Management. The ground reality is that the total capacity of these institutes has not seen any real increase in this period. Worse, attempts by many foreign universities to set up satellite campuses and centres of learning in India have made no headway as the ministry has shown no willingness to clear these proposals. A move to relax the law to allow foreign universities to be set up in India has also not made any progress.



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