India’s adult literacy is 61 per cent compared with China’s 91 per cent. Expenditure on education as a percentage of total public expenditure is 10.7 per cent and 12.8 per cent, respectively. China has 708 researchers per million population compared with 19 in India. In 1990, publications by Indians in journals were 50 per cent higher but in 2008, Chinese publications outnumbered Indian ones by two to one. In 1985, the number of PhDs in science and engineering in India were 4,007 and 125 in China, but by 2004, China had 14,858 PhDs, while we had increased the number to only 6,318. In 2007, Indians filed 35,000 patents compared with 245,161 in China.

China is set to overtake Japan as the second largest research & development (R&D) spender after the US in the next two years. It allocated 1.34 per cent of its GDP in 2005 on R&D (which, incidentally, is well below 3.6 per cent in South Korea) while expenditure on R&D in India was barely 0.61 per cent in the same year. We have only 12,000 vocational training institutes to nearly 500,000 in China. More than 19 per cent of the youngsters in China opt for higher education, while only 11-12 per cent of Indian students end up in colleges and universities.

The comparison with China in educational attainments and performance is meant to once again lament over how China is far ahead of us. The comparison is made simply to drive home the need to understand that the education sector in India today needs the kind of focused and urgent policy attention that trade and industry did in the late eighties, which led to their reforms in 1991.

Education reforms and progress are the most important and critical policy issue in the country today. Otherwise, we may soon discover that our much-touted demographic dividend has remained an illusion and instead morphed into a disaster as large groups of unemployable youth, unable to join the workforce, end up swelling the ranks of extremists and insurgents. India will have to earn its demographic dividend and time is actually running out because the window is a relatively short one.

There is little to be achieved by tinkering at the edges, for example, by raising the bar for taking the IIT entrance examination or making the Xth standard exam voluntary. These are at best distractions. What is needed are bold and large-scale reforms that will shake up the sector and allow for new ideas, initiatives, and dynamic new organisations to take roots. We have to take the academic community along in implementing these reforms rather than have teachers at loggerheads with the government on issues of pay, autonomy or curriculum design.

The Human Resource Development (HRD) minister is well aware of the need to think boldly, as is reflected in his statements prior to and after taking charge. The forthcoming Education Bill provides the opportunity to implement the required reforms. These would include: doing away with dysfunctional organisations such as UGC, AICTE, MCI and the other 13 professional councils at the national, and at the state level, which, as recent events have shown, are riddled with malpractices and vested interests; establishing multiple independent accreditation system; allowing profit generation companies to enter this sector so that there is greater transparency in revenue generation; doing away with the plethora of controls, regulations and licences; expanding teachers training and vocational training capacities manifolds by both increasing public sector allocations and attracting private investment in these areas; creating an accessible and large commercial bank credit pool for education loans and massively expanding the number of scholarships to improve equity and access.

Fifty four per cent of India’s population is below the age of 25. We will add 150 million people to the workforce in the next 15 years and have huge backlog to clear, with graduate unemployment running at nearly 20 per cent. The gross enrolment ratio for higher education, at present at 12 per cent, has to be raised to more than 40 per cent if the young population is to be converted into productive human capital. And Indians spend nearly $5 billion to educate their children abroad!

This big domestic demand base can be used to convert India into a global education hub that attracts students from all over the world. This will contribute not only to our gross domestic product — in the US and the UK foreign students contribute $15 billion and $5 billion annually — but also build an India constituency. To achieve this, we need to look at higher education as a sector in which India has a big potential comparative advantage. But, for this to happen, the centre needs to think boldly, take action urgently and not get caught in a defensive, protectionist and controlling mindset.

This article first appeared here in the Financial Chronicle.