Private sector dominates higher education

India currently has 410 schools per 100,000 children (age groups 3-17). This translates to roughly 1 school per 250 children. Given that this covers class I till class XII, this seems a reasonable spread. There are of course state-level differences, but it isn’t the case that the richer states have more schools. Madhya Pradesh for instance has more schools (schools per 100k children) than Gujarat. Odisha has more schools than Tamil Nadu. Bihar though is a laggard here with just over 200 schools per 100k children – half the national average.

But when it comes to higher education, the scenario is very different. The richer states generally have a higher density of colleges (colleges per 100k population in the 18-23 age group) than the poorer states. And the inter-state gap is far wider than in the case of schools. The southern states such as Karnataka, Kerala and Telangana have 50% more colleges than all India average (relative to population) while states like Bihar and Jharkhand have just 1/4th the number of colleges as all India average. This raises an interesting question: Is it the lower density of colleges (supply of education) that is resulting in lower enrollment in higher education in the poorer states or is it the low demand for higher education that has resulted in lower supply (lower density of colleges)? Which way does the causality run?

The answer to this is probably the latter since education, and higher education specifically is dominated by the private sector. In higher education, two-thirds of the students are enrolled in private colleges. And in some states like Maharashtra, Uttar Pradesh, and Andhra Pradesh private sector colleges account for over 85% of enrollment. But in a state like Bihar, only 15% of the college students are enrolled in private colleges. There are not many private colleges in the state and private colleges get set up (largely) in response to demand rather than by state policy.

In primary and secondary schools also, the private sector plays a large role. At an all-India level 45% of the students in primary and secondary schools’ study in private schools (aided and unaided). Again, the richer states have a far higher share of enrollment in private schools than the poorer states. Thus 74% of students in Maharashtra are enrolled in private schools while less than 10% of students in West Bengal study in private schools.