The Paradox of Plenty, How Telangana’s Surfeit of Colleges Undermines Higher Education Quality and Economics

The Paradox of Plenty, How Telangana’s Surfeit of Colleges Undermines Higher Education Quality and Economics

Telangana presents a fascinating and troubling paradox in the landscape of Indian higher education. As detailed in an analysis by Venkatanarayana Motkuri and E Revathi, the state boasts one of the highest Gross Enrolment Ratios (GER) in the country at 40% and the second-highest college density, with 52 colleges per lakh of eligible population. This appears, at first glance, to be a remarkable success story of educational expansion and access. However, beneath this impressive quantitative veneer lies a profound structural crisis: an oversupply of small, under-enrolled colleges that collectively deny the state the economies of scale essential for quality, sustainability, and effective regulation. This current affair is a critical case study of how unchecked, incentive-driven proliferation in the private education sector, coupled with demographic shifts and policy missteps, can lead to a system that is wide but shallow, accessible but inefficient, and numerically robust but qualitatively compromised.

The Anatomy of Expansion: How Quantity Overshadowed Scale

Telangana’s high college density is primarily a post-1991 phenomenon, catalyzed by economic liberalization and the state’s own policies. The Fee Reimbursement Scheme (FRS), a populist welfare measure, acted as a powerful financial stimulus. By guaranteeing tuition fee payments to a vast number of students, it created a predictable revenue stream for private entrepreneurs, triggering a gold rush in establishing colleges. The result was a dramatic, unplanned proliferation, particularly of private degree and engineering colleges.

This expansion, however, was not matched by a commensurate growth in the eligible student pool. The analysis reveals a staggering disconnect:

• Intake Capacity: Over 6.5 lakh seats across all post-secondary institutions.

• Eligible Student Pool: Only about 4 lakh higher secondary graduates annually, with not all opting for further studies.

• Actual Admissions: Significantly lower, leaving nearly half of all private degree college seats and a quarter of professional college seats unfilled.

This has created a landscape dominated by “small colleges.” A staggering two-thirds of colleges in Telangana have an enrolment of fewer than 500 students, with the state average being a meagre ~600 students per college. In the world of higher education, such small size is economically and academically debilitating.

The Cost of Smallness: Lost Economies of Scale and Eroding Quality

The core thesis of the analysis is that this fragmentation destroys the “economies of scale” crucial for a healthy education system. The consequences are multifaceted and severe:

1. Financial Non-Viability and Resource Dilution: Operating a college involves high fixed costs—infrastructure, libraries, laboratories, and administrative overhead. Spreading these costs over a small student body makes per-student costs exorbitant. To remain financially viable, especially private colleges with unfilled seats, are incentivized to cut corners. They under-invest in qualified faculty (opting for low-cost, often under-qualified adjuncts), neglect library and lab upgrades, and minimize operational expenses. This directly and inevitably dilutes educational quality. A college struggling to pay its bills cannot invest in pedagogical innovation or research.

2. Regulatory Overload and Ineffectiveness: State universities are tasked with the academic supervision and affiliation of hundreds of these small colleges. The sheer number creates a “heavy burden,” making effective oversight nearly impossible. Regulatory mechanisms—curriculum adherence, exam conduct, faculty qualification checks—become superficial, bureaucratic exercises rather than meaningful quality assurance. This regulatory stretch allows malpractices to flourish and standards to vary wildly.

3. Academic Isolation and Missing Multidisciplinarity: Most small colleges, especially professional ones, are single-discipline institutions (e.g., only engineering or only pharmacy). This siloed existence denies students the “cross-learning and peer learning” benefits of a multidisciplinary environment. A thriving academic culture requires a critical mass of students and faculty across disciplines to foster debates, interdisciplinary projects, and a vibrant campus life—all of which are absent in tiny, mono-cultural institutions.

4. Waste of Public Subsidy: The government’s Fee Reimbursement Scheme, while promoting access, essentially subsidizes this inefficient model. Public funds are funneled into institutions that are underutilized and potentially sub-standard, representing a significant misallocation of scarce educational resources. The subsidy perpetuates the existence of non-viable colleges rather than incentivizing consolidation and quality.

The Demographic Reality: A Shrinking Pool and the Migration Drain

Compounding the problem of oversupply is a tightening demographic reality. Telangana is undergoing a demographic transition, with the population in the college-going age group (18-23 years) beginning to decline. School participation at the higher secondary level is already near saturation, and pass percentages have a ceiling. Therefore, the pool of ~4 lakh eligible graduates is unlikely to grow and may soon start contracting.

Furthermore, the state suffers from a net negative student migration. While Telangana, particularly Hyderabad, attracts some students, a larger number of its own eligible students migrate to other states or abroad for higher education, drawn by brand value, perceived quality, or specific courses. This further depletes the domestic demand for the plethora of seats on offer.

The analysis poignantly notes that attracting enough out-of-state students to fill the gap is unlikely, making the oversupply a permanent, structural feature unless addressed.

The Policy Conundrum: NEP 2020’s Vision vs. Telangana’s Reality

The National Education Policy (NEP) 2020 envisions a transformation towards large, multidisciplinary universities and colleges that can achieve economies of scale, foster research, and offer holistic education. However, the authors present a sobering critique: in Telangana, “it is not feasible to transform all existing small institutions into large, multidisciplinary institutions because the number of eligible students is already saturated.”

This highlights a fundamental implementation challenge. You cannot simply legislate small colleges into large ones if there aren’t enough students to fill them. The NEP’s vision risks being aspirational without a pragmatic pathway for states like Telangana already burdened with a legacy of fragmentation.

The Path to Consolidation: Clustering as a Pragmatic Solution

Given the constraints, the authors propose a pragmatic, albeit challenging, solution: consolidation or clustering. Instead of attempting to expand individual small colleges, policy should incentivize or mandate the grouping of nearby colleges—potentially across disciplines—into shared academic and administrative clusters or consortia. This could involve:

• Shared Infrastructure: Common central libraries, advanced laboratories, sports facilities, and IT infrastructure.

• Faculty Resource Sharing: Creating pools of specialized faculty who can teach across institutions within the cluster, improving faculty utilization and allowing students access to a wider range of experts.

• Integrated Academic Programs: Allowing students to take credit-based courses across colleges in the cluster, effectively creating a de facto multidisciplinary ecosystem.

• Unified Administrative Backend: Streamlining governance, examination, and recruitment processes to reduce overhead costs.

Such a model would move the system towards virtual economies of scale without the physically impossible task of merging all small colleges into a few mega-institutions. It would also align with the NEP’s spirit of breaking down disciplinary silos.

Broader Implications: A Warning for Indian Higher Education

Telangana’s situation is not unique but is perhaps one of the most acute examples of a pan-Indian problem. States like Andhra Pradesh, Karnataka, and parts of North India have witnessed similar private-sector-led explosions in engineering and degree colleges, followed by a wave of closures and dysfunction. Telangana’s case offers critical lessons:

1. Policy Must Look Beyond Access: While expanding access is vital, policy instruments like blanket fee reimbursement must be designed with an eye on system sustainability and quality. Incentives should reward outcomes (graduation rates, employability, quality metrics) not just input (number of seats).

2. The Need for Supply-Side Regulation: There is a compelling case for stricter supply-side controls. New college approvals must be based on rigorous assessments of demographic demand, existing capacity in the region, and the promoter’s ability to ensure scale and quality, not just land and building availability.

3. Demographics are Destiny: State higher education plans must be rigorously grounded in demographic projections. Building a system for a population that will not materialize is a recipe for waste and decay.

4. The Imperative of Consolidation: The era of indiscriminate expansion is over. The next phase of Indian higher education must focus on consolidation, quality enhancement, and efficiency. This is politically difficult, as it involves confronting powerful private education lobbies and managing the fallout of likely closures, but it is economically and educationally essential.

Conclusion: From Density to Excellence

Telangana stands at a crossroads. It has successfully built a dense higher education network, but this very density has become its Achilles’ heel. The metric of success must now shift from college density to institutional strength, from enrolment numbers to learning outcomes, and from subsidized access to sustainable quality.

The state’s challenge is to engineer a difficult transition from a fragmented, inefficient model to a consolidated, efficient, and high-quality system. This will require courageous policy moves: rationalizing the Fee Reimbursement Scheme to incentivize quality and scale, actively facilitating and funding clustering initiatives, and possibly even managing the orderly exit of unviable institutions. The goal must be to create fewer, but larger, stronger, and truly excellent institutions that can serve Telangana’s youth and economy in the 21st century. The alternative is a continuing descent into a system of empty seats, under-resourced classrooms, and degrees of diminishing value—a grand facade of education that fails its fundamental purpose.

Q&A on Telangana’s Higher Education Crisis

Q1: What is the central paradox of Telangana’s higher education system as described in the analysis?
A1: The central paradox is that Telangana boasts one of the highest Gross Enrolment Ratios (GER of 40%) and college densities (52 per lakh population) in India, which suggests successful expansion of access. However, this quantitative success masks a qualitative crisis: the state has too many small, under-enrolled colleges. The average enrolment is only about 600 students, with two-thirds of colleges having fewer than 500 students. This fragmentation denies the system economies of scale, leading to financial non-viability, diluted quality, and inefficient regulation, undermining the very purpose of the educational expansion.

Q2: How did the Fee Reimbursement Scheme (FRS) contribute to the current structural problem?
A2: The Fee Reimbursement Scheme acted as a powerful but distortionary financial incentive. By guaranteeing tuition fees for a large number of students, it created a low-risk, assured revenue model for private education entrepreneurs. This triggered a rapid, unplanned proliferation of private colleges, particularly degree colleges, as promoters rushed to capture this government-subsidized demand. The scheme fueled expansion without corresponding mechanisms to ensure optimal college size, quality, or alignment with actual demographic demand, leading directly to the oversupply and small college size that plagues the system today.

Q3: What are the key negative consequences of having a majority of “small colleges” with low enrolment?
A3: The consequences are severe:

• Financial Non-Viability: High fixed costs spread over few students raise per-student costs, forcing colleges to cut corners on faculty, infrastructure, and resources.

• Erosion of Quality: Underinvestment becomes inevitable, directly compromising teaching and learning outcomes.

• Regulatory Failure: Universities are overwhelmed regulating hundreds of small, affiliated colleges, making effective oversight impossible.

• Academic Silos: Most small colleges are single-discipline, denying students multidisciplinary exposure and a vibrant campus culture.

• Waste of Subsidy: Public funds via FRS subsidize inefficient and potentially sub-standard institutions.

Q4: Why does the authors’ analysis suggest that the National Education Policy (NEP) 2020’s vision of large, multidisciplinary institutions is difficult to implement in Telangana?
A4: The NEP 2020 envisions transforming small institutions into large, multidisciplinary ones. However, the authors argue this is not feasible in Telangana because the eligible student pool is already saturated and even declining due to demographics. You cannot create large institutions if there aren’t enough students to fill them. The state’s intake capacity (6.5 lakh) already far exceeds its annual eligible graduate pool (~4 lakh). Therefore, a literal physical merger of all small colleges into a few large ones is demographically impossible, making the NEP’s vision challenging to execute without a different approach.

Q5: What is the proposed “clustering” solution, and how could it address the economies of scale problem?
A5: Clustering is a pragmatic alternative to full mergers. It involves grouping nearby small colleges—possibly from different disciplines—into an academic and administrative consortium. This cluster would facilitate:

• Shared Resources: Common libraries, labs, and facilities, reducing per-institution overhead.

• Faculty Sharing: A pool of specialized faculty teaching across colleges, improving utilization and expertise access.

• Cross-College Courses: Students earning credits from courses offered anywhere in the cluster, creating a virtual multidisciplinary environment.

• Unified Administration: Streamlined governance and processes.
  This model aims to achieve virtual economies of scale—gaining the efficiency and academic benefits of a large institution—without the demographically impossible task of physically consolidating all small colleges into one campus, thereby working within the constraints of Telangana’s saturated student market.