The Privatisation of Higher Education in India: A Silent Coup
The privatisation of higher education in India is quietly shutting the poor out. A silent coup is deciding who gets to learn in this country.
Merit or Money? The Privatisation of Higher Education in India and the Death of Equal Opportunity
In The Tyranny of Merit, Harvard philosopher Michael Sandel observes that even the most egalitarian education system cannot neutralise the vast differences between a child born into privilege and a child born into deprivation. The former grows up surrounded by resources, networks, personalised attention, and cultural capital; the latter must fight simply to reach the starting line. "Even the best, most inclusive educational system would be hard pressed to equip students from poor backgrounds to compete on equal terms with children from families that bestow copious amounts of attention, resources, and connections," he writes.
Daniel Markovits, in The Meritocracy Trap, deepens the argument by showing how modern meritocracy, far from dismantling privilege, quietly entrenches it. "The new elite receives a meritocratic inheritance that transmits privilege, and excludes the middle class from opportunity, as effectively as the old elite's birthright used to do." These observations, drawn from Western contexts, apply to India — except that our inequalities are older, deeper and far more structured, rooted in centuries of caste, class, gender and religion-based hierarchies.
At a time when India boasts of becoming the world's third-largest economy, a technology hub, and a global education market, the privatisation of higher education in India is quietly restructuring the very foundation of its knowledge ecosystem in favour of a narrow elite.
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Wealth inequality and the cost of private coaching
The roots of elite capture lie in the economic and caste structure of the country, and they shape every downstream stage of the privatisation of higher education in India. Data from the World Inequality Database and the India Human Development Survey (IHDS) show that caste and religious groups in India have sharply different economic positions.
Wealth correlates almost perfectly with caste and religion, with upper-caste groups holding far more assets on average. According to the paper Wealth Inequality, Class and Caste in India, 1961–2012, Brahmins earn about 48% more than the national average household income and non-Brahmin forward castes 45% more, while Other Backward Classes (OBCs) earn 8% less, Scheduled Castes (SCs) 21% less, and Scheduled Tribes (STs) 34% less than the national average.
Among religious groups, Muslims earn about 7% below the national average — broadly comparable to OBC households — while non-Hindu, non-Muslim groups outside the SC/ST/OBC categories earn well above the national average.
Under Article 21A, inserted by the 86th Constitutional Amendment in 2002, the Constitution of India guarantees the right to free and compulsory education for children aged 6 to 14. The Right of Children to Free and Compulsory Education (RTE) Act, 2009, which came into force on 1 April 2010, gives effect to this right and lays down the responsibilities of the State and local authorities in providing free elementary education. However, this principle has been consistently undermined by successive governments through sustained withdrawal from public investment in school education. As a result, rising private school fees and declining investment in government schools have meant that children from historically marginalised communities start their educational trajectory in a structurally disadvantaged position.
India's Gross Enrolment Ratio (GER) shows this story clearly: per UDISE+ 2021–22, while enrolment exceeds 100 per cent in primary school, it drops to 94 per cent in upper primary, 80 per cent in secondary, 58 per cent in higher secondary, and a mere 28 per cent in higher education. The "pipeline" narrows not because children lose merit as they grow older, but because the system becomes more expensive and exclusionary.
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Evidence from the All India Survey on Higher Education 2021–22 shows that the national GER in higher education stands at 28.4%; for SCs it is 25.9% and for STs only 21.2%. While GER figures for OBCs remain underreported, available data indicate that their enrolment levels are also well below the national average, reflecting similar patterns of structural exclusion.
Layered atop this structural inequality is an exploding private education market that thrives on the desperation of aspirational families. The latest World Inequality Report highlights India as among the world's most unequal societies, a pattern that shows little sign of improvement. The report shows that in India the top 10% earn about 58% of the national income, while the bottom 50% receive only around 15%.
Inequality in wealth is even sharper, with the richest 10% owning roughly 65% of total wealth and the top 1% alone holding about 40%. This is the backdrop against which higher education is being commodified. As incomes stagnate, the cost of private schooling, coaching and college fees rises relentlessly, creating an ever-widening gap between those who can afford to compete and those who cannot.
Coaching has become almost compulsory for survival in the system. For countless students who cannot pay, the aspirational ladder ends before it even begins.
In cities like Kota, the cost of National Eligibility cum Entrance Test (NEET) or JEE coaching and living expenses ranges from ₹1.5 lakh to ₹3 lakh per year, far beyond what most rural or marginalised households can afford. The impact of private coaching is felt most strongly in medical education, after the Union government rolled out NEET across the country.
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According to Justice A.K. Rajan Committee report, in Tamil Nadu — which had once abolished entrance exams to protect socially marginalised students — NEET has spawned a ₹5,750-crore coaching industry, with over 400 coaching centres mushrooming since 2016.
As per Tamil Nadu's 2023 medical counselling data, around 69% of candidates eligible for the state's government-quota seats were NEET repeaters, almost always supported by expensive coaching classes. NEET was sold as a neutral, egalitarian, centrally controlled test that would eliminate capitation fees and standardise merit. Instead, it has simply replaced school education with a nationwide coaching economy and entrenched the privatisation of higher education in India at the entry point itself. The entrance exam has become less a measure of aptitude and more a measure of a family's capacity to spend lakhs on coaching, mock tests, residential programmes and "drop years".
Implementation of reservation and judicial views
The contradiction becomes even sharper when we observe the developments in super-speciality medical education. Beginning with the Constitution Bench ruling in Dr. Preeti Srivastava v. State of Madhya Pradesh (1999), the Supreme Court has consistently held that "merit, and merit alone" should be the basis for admission at the super-speciality level, and that reservation has no real place at this stage. As a result, some of the most exclusive and expensive medical seats in the country are entirely unreserved.
Simultaneously, the system has become so dysfunctional that even candidates with 0 percentile in NEET-SS have been admitted in recent years, with the National Board of Examinations in Medical Sciences (NBEMS) lowering the qualifying cut-off to zero in 2023–24 to fill vacant seats. The rhetoric of "merit" is thus selectively deployed. Merit is invoked to deny quotas for SC, ST and OBC candidates in super-speciality programmes, but quietly discarded to fill high-priced seats with low-scoring affluent candidates. This double standard exposes the central fault line of the privatisation of higher education in India: merit is a slogan; money is the gatekeeper.
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When the ability to pay becomes the primary qualification for medical education, the public loses twice — first through the exclusion of talented but poor students, and again in the future when doctors who are unlikely to serve in rural areas enter the system.
The issue is not limited to medical admissions. Inconsistencies in the implementation of OBC reservation, combined with conflicting judicial views, continue to shape admissions at the National Law Universities (NLUs), and this is particularly consequential given the central role NLUs play in training future lawyers and judges.
The 142nd Report of the Department-related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice (2024) has explicitly noted that NLUs are not properly implementing reservations for SC, ST and OBC students in UG and PG admissions, especially in All India Quota seats, and has recommended that the Bar Council of India oversee compliance. Despite these recommendations and repeated political and civil society interventions, uneven practices continue at NLU admissions. The All India OBC Students Association (AIOBCSA) has urged the Bar Council of India to ensure a consistent reservation policy in NLUs, particularly for All India Quota seats in UG and PG admissions, as well as for faculty recruitment.
Gender inequality
Despite many girls topping CBSE and state board exams, fewer girls clear centralised entrance tests held for STEM courses. The number of girls who take JEE Main and later qualify for JEE Advanced, for instance, is much lower than the number of boys.
According to the National Testing Agency (NTA), 22.5 lakh students registered for JEE Main 2023, and only about 30% were girls. The advent of national entrance exams has affected not just professional courses; their impact is now being felt in science and humanities admissions at Union government-controlled central universities as well. The introduction of the Common University Entrance Test (CUET) has already reduced the enrolment of women in central universities. Data from Delhi University shows that after CUET was introduced in 2022, the number of women admitted to undergraduate programmes dropped sharply from 54,818 in 2021 to just 34,120 in 2022 — and despite a modest recovery (36,039 in 2023 and 38,096 in 2024), figures remain well below pre-CUET levels — indicating that centralised entrance tests place women at a disadvantage.
Lack of government funding
The rise of the private coaching-industrial complex is only one half of the problem. The other half is the creeping privatisation of higher education in India, disguised as "reform" or "efficiency." The National Education Policy (NEP) 2020 was launched with the ambitious goal of increasing India's GER in higher education to 50% by 2035, a target that would require a near doubling of capacity from the existing 1,168 universities (per AISHE 2021–22). However, five years since its rollout, progress has been sluggish.
The number of Union or state government-funded universities has barely grown, and Union government funding for higher education has not seen any meaningful improvement. Instead of increased public investment, institutions are facing shrinking grants and growing reliance on loan-based funding mechanisms such as the Higher Education Financing Agency (HEFA).
HEFA, incorporated in May 2017 as a joint venture between the Ministry of Education and Canara Bank, was set up to fund campus infrastructure through loans rather than direct grants, and it has fundamentally altered how central institutes and universities in India are financed — often for the worse. Conceived as a way to mobilise market borrowings and CSR funds to create world-class facilities, HEFA has instead shifted a significant share of the burden of financing from the government to institutions themselves. With limited private participation, central universities and IITs have been forced to repay principal largely through internal revenues — even as the government services interest under most windows of the RISE scheme — triggering widespread fee hikes and cost-cutting measures.
Investigations show that institutions like IIT Delhi and others are diverting substantial portions of their income toward debt servicing, while their research and teaching budgets stagnate. This loan-based model, meant to accelerate infrastructure development, is now squeezing central universities and IITs, many of which lack strong revenue streams. Instead of reducing dependence on public funds, HEFA has effectively commercialised public education, pushing institutions to operate like debt-laden enterprises and eroding the very principle of higher education as a public good.
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Despite adverse feedback on HEFA from the heads, faculty, and students of central institutions, NITI Aayog has called for the creation of a HEFA-like financing agency to support state public universities. The proposal raises critical questions about whether the path to educational reform should lie in debt-based funding or in a renewed commitment to sustained public investment. As regular grants from the Ministry of Education and the UGC continue to shrink, financially weaker state universities, where the majority of India's students are enrolled, are finding themselves trapped in a funding crisis that threatens both their academic autonomy and the affordability of higher education. The Parliamentary Standing Committee on Education (2023) has also highlighted the stagnation of allocations to both the UGC and RUSA for state universities in recent years.
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Taking their cue from Union government policy, state governments too are increasingly embracing privatisation. Andhra Pradesh, for instance, is rapidly shifting publicly funded medical education into a privatised model. In September 2025, the new TDP-led NDA state government formally approved moving ten of the seventeen state-sanctioned medical colleges — built with a planned outlay of around ₹8,480 crore of public money — into a Public-Private Partnership (PPP) structure that hands operational control, fee-setting and long-term benefits to private entities.
Earlier, in 2023, the previous government had already split the 85% state quota under G.O. Ms. No. 107 and 108, converting a significant share of low-cost government seats into Self-Financing (Category-B) and NRI (Category-C) quota seats with annual fees rising to ₹12 lakh and ₹20 lakh respectively in newly sanctioned government colleges, while NRI fees in private colleges have climbed to nearly ₹39.6 lakh per year. The new administration has retained this fee structure.
All these trends point to a predictable logic: underfund public institutions, push them into debt, allow private players to fill the gap, convert affordable seats into high-fee seats, and normalise private coaching as a prerequisite. Over time, the system becomes hostile to the poor, the marginalised, and the rural. This elite capture is not just unfair; it is profoundly damaging to India's long-term development.
Increase in education loans
Rising tuition fees, especially in private colleges and professional courses, are pushing more Indian students to rely heavily on education loans. Education loans have expanded rapidly, growing from around ₹83,000 crore in 2022 to over ₹1.2 lakh crore in 2024, yet they now carry the highest NPA rate in the personal loan segment at 3.6% as per the RBI's Financial Stability Report (June 2024) — well above credit cards (1.8%), auto loans (1.3%) and housing loans (1.1%) — showing how repayment capacity has not kept pace with borrowing.
As fees soar and families take larger loans without guaranteed employment outcomes, the financial strain deepens, creating a debt trap for thousands. At the same time, the system itself shows a structural bias: government data from the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) reveals that around 70% of all guaranteed education loans go to general category students, who also receive higher average loan amounts, while OBC, SC and ST students together receive significantly fewer and smaller loans despite being economically more vulnerable. This imbalance suggests that rising education costs not only burden students with long-term debt but also reinforce social inequities, making access to higher education far more difficult for marginalised communities.
Throughout modern Indian history, higher education has been one of the few ladders of mobility available to the marginalised. Today, that ladder is being sawed off from the bottom. The silent coup in Indian higher education has been allowed to proceed for so long because it hides behind the language of reform, efficiency, global standards and meritocracy. But as Sandel warns, meritocracy becomes toxic when it blinds the successful to the platform that enabled their rise.
And as Markovits reminds us, elite reproduction is not natural — it is engineered. If higher education in India continues down the path of privatisation and exclusion, it will cease to be a public good and become a hereditary privilege. But if the country recommits to public investment, equitable access, reservation, scientific temper and strengthened state universities, it can still reverse course.
In contrast to these urgent needs, the Union government has introduced the Viksit Bharat Shiksha Adhishthan Bill, 2025 (VBSA Bill), tabled in the Lok Sabha on 15 December 2025 and subsequently referred to a Joint Parliamentary Committee for further scrutiny. The Bill proposes to repeal the UGC Act (1956), AICTE Act (1987) and NCTE Act (1993), and replace these three statutory regulators with a single apex body — the Viksit Bharat Shiksha Adhishthan — exempting only medical and legal education from its purview. By stripping the new regulator of grant-disbursal powers and shifting fund allocation to the Ministry of Education, the Bill expands bureaucratic and political control over public institutions, including state government institutions, and accelerates the privatisation of higher education in India. Its centrally dominated structure sidelines state governments, teachers, and marginalised communities, thereby weakening diversity, autonomy and the federal character of India's education system. Critics have also flagged the Bill's silence on enforcement of SC, ST and OBC reservation, and its potential to override state higher education councils.
The state's withdrawal, the explosion of private institutions, the normalisation of exorbitant fees, the spread of coaching factories and the conversion of professional education into a market commodity together amount to a silent coup. The takeover has been subtle, incremental, policy-driven and shockingly effective.
Democracy cannot survive when knowledge is monopolised by a small group. The question is whether India chooses to defend the republic of knowledge or surrender it to the republic of privilege.
Dr. Magilan Karthikeyan is currently working as an Assistant Professor in a Private University. His interests include science, politics, history and culture.
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