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Why higher education reforms are stalled
India has 52,000 colleges, 1,338 universities, 43 million students and certifies 1.5 million engineering graduates annually. The rankings whisper a different story: India is a factory of credentials not of breakthrough thinking and innovation
ROY aniruddha
Consider this paradox: India ranks 38th on the 2025 Global Innovation Index, below Vietnam and Thailand. China, meanwhile, has entered the Top 10 for the first time ever. Yet India has 52,000 colleges, 1,338 universities, 43 million enrolled students, and produces 1.5 million engineering graduates annually. The numbers scream abundance. The rankings whisper a different story: India’s academy is a factory of credentials, not a factory of breakthrough thinking and innovation.
This is a design problem rooted in governance failures that have persisted for decades. India’s higher education system wasn’t built to produce innovators; it was built to prompt compliance. And the bureaucratic machinery responsible for this stagnation remains largely intact, with reforms moving at a glacial pace despite widespread acknowledgement that change is urgent.
Walk into most Indian engineering colleges and you’ll find curricula that would have felt dated in 2005. Students solve textbook problems designed by government committees in Delhi, problems that bear no semblance to what they’ll encounter in real-world workplaces. They graduate having written zero lines of production code, designed zero actual structures, and solved zero market problems. They know about technology. They don’t know how to create it.
The culprits have grandiose names: University Grants Commission (UGC) and the All India Council for Technical Education (AICTE). Established in 1956 and 1945 respectively, these bodies were designed for an era when India needed centralized control to build an education system from scratch. That mission has long been accomplished. Yet these institutions remain trapped in their original mandates, operating as gatekeepers rather than facilitators.
A 2019 analysis by legal experts found that numerous HEIs (higher education institutions) fall under dual jurisdiction, with UGC and AICTE often making contradictory demands. When conflict arises, nobody knows who wins. This isn’t efficiency; it’s institutional paralysis disguised as regulation. In Germany, Fraunhofer Institutes operate flexibly, allowing universities to redesign curricula quarterly based on industry needs. In India, a curriculum change requires committee approvals that can take 18 months.
Recognition of the problem. In 2017, the government proposed replacing both bodies with a unified Higher Education Empowerment Regulation Agency (HEERA). In 2018, a Higher Education Commission of India (HECI) Bill was introduced. The National Education Policy 2020 explicitly addressed UGC-AICTE overlap as a core problem. Yet eight years later, both bodies function largely unchanged. The policy frameworks for reform have been articulated. Implementation has stalled. President Pranab Mukherjee warned in 2016: “If not reversed quickly, we will land ourselves in a scenario of having a large number of people with degrees but not enough manpower with proficiency.” A decade later, that scenario has arrived. The solutions exist. What’s missing is accelerated execution.
R&D funding maze. Here’s a number that should shock every policymaker: India spends 0.7 percent of GDP on R&D (public and private combined). The US spends 3.5 percent. China spends 2.68 percent. But there’s a deeper issue than budget: the government’s R&D apparatus is fractured across three separate departments that function as isolated fiefdoms.
The Department of Science and Technology (DST) oversees basic science; the Department of Scientific and Industrial Research (DSIR) manages CSIR, India’s largest publicly funded R&D organization with 37 laboratories; the Department of Biotechnology (DBT) focuses on life sciences. In 2024-25, these three departments received Rs 16,628 crore combined — but allocation structure reveals dysfunction. DST gets 48 percent, DSIR gets 38 percent, and DBT gets 14 percent. That’s not integrated strategy; it’s territorial carve-up. A biotech startup needing regulatory approvals must navigate DBT for genetic engineering approval, DCGI (under the Ministry of Health and Family Welfare) for clinical trials, and DSIR if CSIR institutions are involved. No single window. Three different bureaucracies, three different timelines, three different sets of requirements.
China’s approach is radically different. State planning agencies identified semiconductors, AI, and renewable energy as strategic priorities. Coordinated funding was channeled through multiple agencies with clear inter-agency communication. The result: distributed innovation hubs in Shenzhen, Hangzhou, and Chengdu, each developing specialized capabilities. India aspires to become a semiconductor hub but hasn’t created the funding coordination or inter-departmental alignment required.
Regulatory labyrinth. Here’s what nobody wants to discuss directly: India’s regulatory environment doesn’t just slow innovation — it kills it before it starts. And fragmentation is constitutional.
A biotech startup wanting to conduct clinical trials requires approval from the Drugs Controller General of India (DCGI) under the Ministry of Health. But if the drug involves genetic engineering, the Genetic Engineering Appraisal Committee (GEAC) under the Ministry of Environment must approve it. If it involves recombinant DNA, the Department of Biotechnology’s Recombinant DNA Advisory Committee is involved. If the trial tests a device rather than a drug, the Central Drugs Standard Control Organization (CDSCO) has different rules. If it’s an agritech trial involving drones, the Directorate General of Civil Aviation (DGCA) must approve. If it uses wireless spectrum, TRAI must concur. And if the startup accesses any government land, the Ministry of Defence gets involved.
One startup. Seven government agencies. No unified window. No coordinated timeline.
But change is possible and beginning. The RBI’s fintech sandbox, launched in 2019, proved that regulatory flexibility works. UPI succeeded precisely because government created specific regulatory space for it. GIFT City’s financial sandbox has achieved remarkable results — 68 percent of all Web3 and fintech unicorns launched in India in 2025 are headquartered in GIFT City, not Bangalore. This demonstrates that when regulatory bodies get flexibility to experiment, innovation accelerates. The challenge is that these sandbox successes remain exceptions rather than standard practice. They need to be systematized across biotech, autonomous systems and green energy sectors.
Bias toward three cities. India’s innovation is suffocating under concentration in Bangalore, Delhi, and Mumbai. This creates an illusion of an ecosystem while hollowing out rest of the country. The structural bias is real: venture capital, top talent, and regulatory familiarity are concentrated in three metros.
The Ministry of Science and Technology, working through DST and DSIR, has historically funded research institutions in metro areas. CSIR laboratories are concentrated in Delhi, Bangalore, and Hyderabad. The IITs are predominantly in cities with existing infrastructure. This isn’t because Tier-2 cities lack talent; it’s because government funding followed historical infrastructure. Centralization has become self-reinforcing.
Yet Tier-2 cities are already emerging as innovation hubs despite systemic neglect. Pune hosts 3,200 startups and seven unicorns, driven by strength in edtech and enterprise software. Ahmedabad has 2,100 startups specializing in agritech and fintech, backed by state funds and GIFT City’s ecosystem. Hyderabad has emerged as a pharma and biotech hub with 384 funded deals since 2014. These didn’t happen by accident; they happened because talent found these cities, capital followed talent, and companies found problems worth solving locally.
Talent pipeline. UGC controls degree standards. AICTE controls which technical programs are offered where. Between them, they’ve built a system where your college determines your ceiling more than your capability. In the US, a school dropout can start a company. In India, not having an IIT degree closes most doors.
The 1.5 million engineering graduates India produces annually are mostly underemployed or unemployable. This isn’t a skills shortage; it’s a quality crisis rooted in how UGC and AICTE define competence. They measure it through exam scores, not through ability to solve real problems. You can graduate from an IIT without having built anything, designed anything, or contributed to any market-relevant project.
The IITs themselves are constrained by UGC regulations. Professors are evaluated based on publications in academic journals, not on industry impact. A professor who spends half her time on industry research experiences lower evaluations than a professor who publishes obscurely but frequently. UGC reinforces this through accreditation and funding criteria. The result: faculty focusing on theory rather than practice.
But the market prefers innovators. Leading companies — TCS, Infosys, Wipro, and newer startups — are shifting to capability-based hiring. They hire for demonstrated ability rather than pedigree. Tech companies are hiring bootcamp graduates into meaningful roles. The market is already accepting alternative credentials; formal recognition will likely follow. Some IITs are experimenting with industry partnerships where professors spend time in companies while maintaining academic positions. These are not widespread yet, but they signal that capability-based evaluation is possible even within the existing system. Alternative credentials like bootcamps exist, but UGC and AICTE don’t formally recognize them. This regulatory gatekeeping protects the existing system at the expense of merit-based hiring.
Brain drain paradox. India mourns the exodus of talent to the US, Canada, and the UK as if it’s a betrayal. It’s not. It’s a rational choice made by individuals responding to perverse government incentives.
Indian Ph Ds in nanotechnology earn 5x more, working in world-class labs in the US, and contribute to cutting-edge research. Of course they leave. What’s tragic is that India’s government institutions have made conditions so uncompetitive that remaining feels irrational. Salaries in India’s research institutions are laughably low compared to private industry. Lab infrastructure is outdated. Career advancement requires navigating committee approvals rather than demonstrating capability. The Department of Science and Technology and DSIR have budgets, but much of it flows to bureaucratic overhead rather than researcher salaries or lab equipment.
Path forward: accelerating reforms that already exist. India’s higher education and innovation challenges aren’t mysterious. They are rooted in specific government bodies — UGC, AICTE, DCGI, DBT, DST, and DSIR — operating without coordination, without outcomes-based accountability, and without incentives to change. The National Education Policy 2020, the National Research Foundation, regulatory sandboxes, and distributed innovation hubs represent genuine reform attempts. But implementation has been inconsistent and underfunded. The question isn’t whether these reforms are needed; it’s whether India will commit to accelerating them.
Uncomfortable truth. The uncomfortable truth is that India’s higher education and innovation system won’t change until the bodies responsible for its dysfunction face consequences for implementation delays. UGC has commissioned reviews concluding it needs reshaping. AICTE has acknowledged its overlap with UGC. The Ministry of Science and Technology has proposed reforms. Yet substantive change remains marginal because nobody is held accountable for implementation. Budget reviews happen, proposals are made, reports are filed — and the system persists largely untouched.
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