Autor: Devesh Kapur, University of Pennsylvania.

If physical capital—its growth and distribution—was central to debates on economic development in the twentieth century, human capital increasingly occupies center stage (Kapur and Crowley 2008). While much of the attention has been on primary education, tertiary education is increasingly receiving greater attention. However, the very promise of higher education for developing countries is also making this a politically contentious issue. Because universities infl uence the minds of young adults, they have always been sites of politics. Increasingly, however, a growing awareness of the distributional implications of higher education has led to issues of access and fi nancing becoming more salient (often at the expense of quality). Many of the underlying handicaps faced by students from lower socioeconomic groups appear to occur much earlier in the life cycle—at the primary and secondary school level—but policies to overcome these handicaps seem to be more politically expeditious in higher education. Unsurprisingly, the attention to higher education in developing countries has focused mainly on its economic effects, especially its links with labor markets. However, there is little understanding about the how the impact of higher education is mediated by the type of education and its benefi ciaries.

The paper fi rst outlines the principal characteristics of Indian higher education and its recent rapid growth, especially the number of students and institutions, the fi elds of study, and the sources of supply. The next section focuses on the key challenges facing Indian higher education resulting from a massive increase in the demand for higher education. What are the specific fields of higher education for this growing demand, and how is it being met? It then analyzes two key questions: why, despite India’s robust growth and a legacy of one of the better higher education systems in developing countries, has quality deteriorated so markedly? And, second, if quality is indeed poor, then why is this not manifestly handicapping India’s rapid growth? It concludes with some questions on possible nonlabor market effects of the current structure of Indian higher education.


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