Answer: There may be two types of providers of education: public and private. Private institutions may be partly funded by the government (aided) or entirely self-funded (unaided). According to the All-India Survey of Higher Education, there are 31,390 private colleges, 388 private universities, and 88 private deemed to be universities functioning in the country. Higher education in India faces the triple challenge of ‘expansion, inclusion, and excellence’. Private involvement is necessary to enhance investment and quality in higher education:

• Low GER: The private sector has contributed significantly to increasing the gross enrolment ratio (GER) from 10% in 2000 to 13.8% in 2010.
• Public Spending: The central government expenditure on higher education has been fairly constant around 1-1.5% of its total expenditure, in contrast with developed world spending around 3% or more. The private sector can fill in that gap.
• Modernity in course content: Private involvement can complement traditional colleges and universities offering highly subsidized education that are often not in a position to proactively upgrade infrastructure and update curricula.
• Choice: Private educational enterprises offer a wide choice that matches the educational needs and interests of a radially expanding and heterogeneous student population.
• Employability: Placement-oriented courses whether short-term or full-duration, is a niche opportunity successfully catered to by private educational institutions.
• Industry-academia linkage: Collaboration between industry and academia is key to catalyzing innovation and growth in technology

However, participation of the private sector in higher education even though necessary, creates certain issues:

• Affordability and Access: Private higher education institutions are often accused of charging capitation fees from students, in turn making them unaffordable. Fee structures of private institutions may be one reason for the inaccessibility of higher education.
• Commercialization of education: Over the years, the Supreme Court of India has interpreted the nature of educational institutions to be charitable and not-for-profit. However, the current regulatory regime has not been able to curb the commercialization and economic exploitation of parents by many for-profit private institutions.
• Inefficient regulation: Regulation and accreditation in India are centralized with poor outreach in the federal states. Also, corrupt practices within regulatory agencies like UGC and AICTE have often been reported in the various federal states. Such things have stymied the quality of higher educational institutions.
• Quality: Post-accreditation complacency is typical of private institutions that consider quality upgradation a one-time phenomenon.

India has taken steps like the RTE Act 2009, Institutes of Eminence Scheme, New Education Policy, RISE and EQUIP schemes and allowed 100 percent FDI through automatic route. However, a clear and decisive policy boosting private investment in higher education institutions; alongside an appropriate regulatory environment is imperative to improve the status of private education in the country.