Recent protests over examination irregularities and alleged paper leaks have once again brought attention to the extraordinary pressure surrounding competitive examinations in India. While the immediate issue here – the need for examinations to be fair, secure, and credible – has been discussed in detail, there is also a larger question. Why does so much depend on a single examination in the first place?
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Every year, more than 13 lakh students register for JEE Main examination. Fewer than 20,000 eventually enter the IITs. We usually see these numbers as evidence of how competitive our premier institutions are. They also tell us something else. India has far more talented young people than its capacity to enroll and provide affordable, quality education at the college level. Students whose rank is slightly above 20,000 have lost the IIT seat by a few marks, as little as 1 or 2 marks, perhaps. They are equally capable. What is being done to provide quality education to them?
For decades, India addressed the problem of quality higher education by building a small number of excellent public institutions such as the IITs and IISc, whose contribution to India’s scientific, technological and economic development has been enormous. These institutions admitted only top rankers of a standardized test at a substantially subsidised fee.
But India’s needs today are very different. We want to lead in artificial intelligence, semiconductors, advanced manufacturing, biotechnology, clean energy and other deep technologies. These ambitions cannot be met by producing a few thousand excellent graduates every year. We have to ask ourselves how do we develop top talent without over indexing on these institutions.
Quality education has a real cost
The answer is obvious – creating capacity for quality education using both public and private educational institutions. The follow through is not. The discussion often begins with fees. Private universities are criticised for charging too much, while public institutions are praised for being affordable. But this comparison misses something fundamental.
Good faculty, laboratories, computing infrastructure, research facilities, and student support systems all cost money. According to NIRF 2026 submissions for 2024–25, IIT-Delhi reported operational expenditure of about ₹1,080 crore and IIT-Bombay about ₹1,613 crore. These are research-intensive institutions so this expense is not merely for teaching undergraduates. It includes research expenses, laboratories, consultancy-linked activity, seminars, maintenance and other recurring costs. But that is an essential part of a quality higher education institution that must engage in knowledge creation along with knowledge dissemination.
These institutions recover only a fraction of the cost from student fees. Consider this, the annual cost of quality education in an IIT is between ₹8 lakh to ₹16 lakh per student, but the annual fee is only around ₹2 lakh per student. The difference between operational expenditure and revenue from tuition is funded by government subsidy and borne by the taxpayer.
This brings us to a broader question – how are good universities actually funded?
At leading universities globally, there are broadly three important sources of income: tuition, research and endowments. Johns Hopkins, for example, had federally funded R&D expenditure of about $3.6 billion in FY2024. At Princeton, student fees accounted for only 16% of income in 2024–25, while endowment payout and investment income contributed 55%.
This is important not merely as a financing model. A strong research enterprise allows a university to remain at the edge of knowledge, while endowments built over decades through philanthropy and alumni gifts provide resources for scholarships, faculty and long-term institutional development.
The situation in India is quite different. Endowment income is negligible for most institutions, while research funding remains concentrated in public institutions. For most non-public universities, therefore, tuition remains the principal source from which the cost of education must be recovered.
This creates a very difficult problem. Most Indian families cannot afford the full cost of a high-quality university education. But if an institution reduces fees without replacing that income from somewhere else, it must eventually reduce costs. That can mean compromises in faculty, laboratories, research, infrastructure, and ultimately quality.
So how do we make high-quality education affordable?
Supporting students and institutions
Today, public support largely follows the institution. A student admitted to an IIT or another substantially subsidised public institution receives a significant investment from the state. If another student of comparable ability studies at a different institution, that support disappears almost immediately.
Public institutions must continue to receive strong support. They are national assets and important centres of research and innovation. But there is a strong case for public support to also follow students. A capable student who meets defined criteria could receive transferable support to study at any accredited institution that meets rigorous standards of quality.
Loans and financial aid can help, but they cannot by themselves resolve the problem of affordability. The experience of other countries is worth considering.
Australia’s HECS-HELP system is based on the principle that education is an investment whose economic returns come later. Students repay through the tax system once their income crosses a threshold, rather than being required to service a conventional loan immediately after graduation. Repayment therefore rises with the graduate’s ability to pay.
Australia also provides a warning. Student debt has risen, and the system has required repeated adjustments. Deferring payment does not make the underlying cost of education disappear. Income-linked repayment can be part of the solution, but it cannot substitute for a broader system of financing higher education.
India will therefore have to work on several fronts. We need greater research funding, including incentives for research at high-quality private universities. We need to revisit the regulatory framework around university endowments so that philanthropy can create long-term institutional capital. And we need better mechanisms for supporting students who have the ability to benefit from a high-quality education but not the means to pay its full cost.
None of this requires us to weaken our public institutions or reduce the support they receive. It requires us to recognise that talent exists far beyond their gates as well.
The 20th century required India to build physical infrastructure at scale with roads, railways, ports, power, and telecommunications. The 21st century requires us to think with similar ambition about human capital.
The intense competition surrounding our entrance examinations is partly a consequence of scarcity. Making examinations fairer and more secure is essential, but it does not address that underlying scarcity. We also need many more high-quality institutions and many more ways for capable students to afford them.
In a country of 1.4 billion people, talent is definitely not scarce but high-quality opportunity is.
(Dr. Rudra Pratap is the founding Vice-Chancellor of Plaksha University. Views are personal)
Published – September 29, 2026 08:30 am IST