Take a guess about the sector of the Indian economy impervious to reforms and chances are you will get it wrong. Forget the public sector undertakings and organized labour: They are nothing when it comes to the czars of our higher education system. The controversy over derecognition of 44 deemed universities is one perverse result of this situation.

Illustration: Jayachandran / Mint

A clue to this can be found in the number of students who have chosen to enrol in these precarious institutions. By one estimate, there are 200,000 students enrolled in deemed universities across 13 states. This number only tells one thing: a grave shortage in the supply of educational opportunities. Otherwise there is no reason why youngsters dreaming of a bright future would risk money, time and energy in getting admitted to fly-by-night institutions.

The obvious question here is: how did this supply bottleneck arise? How did these deemed universities get permission to set up shop? At one level, the higher education mafia, a combination of Leftist academics, their political allies and governments of the day blocked foreign direct investment (FDI) in higher education. When that route was closed, the remaining option was to allow local moneybags to enter a crucial infrastructure sector. Yes, education can be called infrastructure because in the end it is the key determinant in producing the knowledge required for economic growth.

These moneybags never posed a threat to our mafia: In quality terms, they could not challenge these brahmins who always retained the nuclear button. Deemed universities were never an option for bright students, who, for the lack of choice, had to go to government universities. If foreign universities were permitted, it would lead to a large number of students joining them and not University Grants Commission-controlled places. It is this fear of competition, reminiscent of protected industries 40 years ago, that has created this deplorable situation. A supply-side response with FDI in higher education is the right answer.

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