India’s economy has resembled a sleeping giant for decades. As it wakes up, it challenges the world not in basic manufacturing, as has been the case for other developing countries, but in information technology, engineering, pharmace-uticals, and the service sector. India’s large higher education sector, however, remains in the doldrums and is likely to stay that way. This stagnation will create a real problem for India as shortages of top-quality personnel slow the progress of the service-sector economy.

American expatriates are now employed in India by hi-tech companies. In the coming year, Infosys and Tata Consultancy Services, the Indian hi-tech giants, will hire and train college graduates from abroad, including some from the United States and other countries. Why? Because Indian universities are not producing the quality graduates needed for the top-end of the new economy. India does produce many graduates — in 2004 universities granted almost 700,000 degrees in science and engineering alone. However, with few exceptions, the institutions themselves lack high-quality standards. Recent international rankings list only the Indian Institutes of Technology, and even these stand nowhere near the top of the charts. It is not quantity, but quality, that is lacking.

India does not spend enough on higher education — only 0.37 percent of GDP. In contrast, the United States spends 1.41 and the United Kingdom 1.07 percent of their much larger GDP. Only countries such as Japan and Korea, where more than 80 percent of students attend largely unsubsidised private universities, match India’s low government spending levels. China spends 0.50 percent of GDP, considerably more than India. Even more remarkably, the proportion of government funds spent on education has decreased over time in India.

India has the world’s third largest higher education system, with 10.5 million students studying in 17,625 colleges. Most of these colleges are affiliated to 231 universities. Undergraduate colleges contribute 89 percent of the total enrollments, but advanced higher education remains underdeveloped. Further, despite the impressive numbers, India educates under 10 percent of its young people — half the proportion that China educates and well below the 60 percent-plus common in industrialised nations.

Part of the problem is rooted in ideology. A commitment to egalitarianism has made it difficult to support high-quality research-oriented universities. Those who advocate such reforms are generally shouted down as elitists — severely undermining the tiny quality sector in higher education. A new policy, introduced by the government without consulting the academic community, hotly contested and overwhelmingly opposed by the higher education community, proposes to increase the proportion of reserved places for lower-caste economically disadvantaged groups in India’s small number of top institutions, which will make it impossible for the country to develop internationally competitive ‘world-class’ universities. When implemented, this mandate will award 49.5 percent of the seats in entering classes to disadvantaged groups. However laudable the goal of lessening social inequality, this step will destroy international competitiveness of top-level institutions.

As in many developing countries, higher education is highly politicised. Undergraduate colleges are often established by local politicians as a way of currying favour with constituents. Not only do these institutions admit only local students, but also appointments to staff positions — ranging from cleaners to professors — are often awarded to supporters.

The very large majority of universities and their affiliated colleges lag way behind international standards, provide mediocre education at best, and in some cases are plagued by low morale, disruptions due to student activism, labour unrest, or political interference. Pedagogy is based on rote learning and “teaching to the exam”. In general, academic libraries are woefully inadequate, lab facilities a joke, and while there has been an effort to utilise information technology, equipment is inadequate and often poorly maintained. Faculty members, although not badly paid, have little power or job security.

India has a tiny non-university vocational sector at the bottom of the system — there are few opportunities in post-secondary trade schools to obtain qualifications for technical jobs. The academic pyramid is highly distorted. The top is much too small and isolated. There is only a limited upper-middle level, and the great number of undifferentiated universities and colleges are of low quality — providing substandard qualifications to large numbers of graduates.

India is truly at a turning point. To fulfill its economic and technological potential in the 21st century, the nation must have an elite and internationally competitive higher education sector at the top of a large and differentiated higher education system, with a mixture of public and private support. The elite sector requires support and recognition. It cannot survive being used as a tool for partisan political policies.

(Philip G. Altbach is Monan professor of higher education and director of the Center for International Higher Education, Boston College)