India's Rapidly Expanding Higher Education System Could Be Improved by Linking Education Quality to Funding

For Release

July 23, 2013

Researchers from the RAND Corporation today unveiled a course of action to link higher education quality in India to funding in a way that will hold the country's educational institutions accountable for their performance, encourage greater innovation and contribute to the nation's education goals.

The study comes at a time when India is experiencing rapid growth in higher education enrollment. India's higher education system is one of the world's largest, enrolling nearly 22 million students in more than 46,000 institutions.

But the system's rapid expansion faces challenges from underprepared faculty, unwieldy governance and other obstacles to innovation and improvement that could prohibit India from meeting its national education goals, according to the study.

India's government currently plays a “command and control” role in higher education. Under government oversight, public universities set the curricula, determine course offerings, administer exams and grant degrees. Affiliated colleges, both private and public, teach students according to these standards and requirements.

India's 12th Five-Year Plan — the government's key policy document for economic development through 2017 — proposes a “steer and evaluate” role that allows a greater degree of self-regulation and enforces higher levels of accountability across the education system's institutions.

Researchers from RAND Education reviewed documents and policies from countries that are similar to India in terms of size, governance structure or higher education system quality. The study revealed a connection between funding and measures of quality that are closely aligned with India's national goals for higher education.

“Our review of the international literature indicates that countries striving for this type of decentralized system often rely on policies that link quality and funding,” said Lindsay Daugherty, co-author of the report and an associate policy researcher at RAND, a nonprofit research organization. “These policies can provide a range of flexible options for aligning funding with higher education goals and incentivizing self-governing institutions to pursue quality improvement.”

Among the study's key recommendations:

  • Policymakers in India should continue to develop and implement an accreditation system that can, over time, become a key measure of quality. In this context, it may be noted that while India's University Grants Commission recently made accreditation mandatory for the institutes it regulates, the RAND study finds that voluntary accreditation with ties to incentives is more effective in obtaining institutional cooperation and compliance.
  • India should develop and implement a system to collect and report data on institutional quality that can be used to gauge progress toward national goals.
  • An effort is needed to gradually phase in methods to link funding to quality measures. Starting small and gradually phasing in more concrete links between funding and quality will be important to ensure a successful transition for India's higher education system.
  • Leaders should continue efforts to develop and implement a student financial aid system, and gradually tie eligibility to accreditation and quality measures. In addition to providing access to education for students in need, student loan systems can play a valuable role in linking funding to quality by tying an institution's eligibility to receive student loan funds to quality standards.
  • India should continue efforts to expand funding for competitive grants to individual researchers. Peer-reviewed research grants have been introduced in India in response to the 12th Five-Year Plan's call to strengthen the nation's research capacity. Such grants also can be used to create a vibrant environment for research innovation and teaching strategy development.

“India's higher education system is in transition,” said Rafiq Dossani, a senior policy researcher at RAND and a co-author of the report. “Instituting policies that link funding to quality will help guide the country's newly autonomous institutions as they aim to improve overall education quality.”

The report, “Building the Links Between Funding and Quality in Higher Education: India's Challenge,” can be found at Other co-authors include Trey Miller and Megan Clifford.

Support for the study was provided by RAND's Investment in People and Ideas program, which combines philanthropic contributions from individuals, foundations, and private-sector firms with earnings from RAND's endowment and operations to support research on issues that reach beyond the scope of traditional client sponsorship.

RAND Education is a leader in providing objective, high-quality research and analysis on educational challenges that is used to improve educational access, quality and outcomes in the United States and throughout the world.

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