Mumbai’s venerable Elphinstone College sits stolidly in a city transformed by India’s economic boom. Though Mumbai’s legendary poverty remains painfully apparent, it is home to the thriving Indian stock market, the Bollywood film industry, and a burgeoning tech sector. Even the city’s name (formerly Bombay) is different. Yet when I returned to Elphinstone recently after a 40-year absence I found the college barely changed, its extraordinary 19th-century ­Indo-­Islamic-­Gothic main buildings lightly renovated, its classrooms and library much as I had left them long ago. The condition of Elphinstone, one of India’s most prestigious colleges, is a telling sign of the state of higher education in the world’s largest democracy. Under­investment has led to ­stagnation.

Stagnation is no longer a word that people reflexively apply to India. Starting in the early 1990s, the nation rocketed to prominence as the world’s second-fastest-growing large economy. Moreover, it is growing not mainly by the standard means of ­low-­wage manufacturing, like China, but through the provision of ­knowledge-­intensive services and software, with globally recognized homegrown corporations such as Infosys and Tata Consultancy Services in the lead. In the coming year, however, these two ­high-­tech giants will hire thousands of college graduates from ­abroad.

The problem is not so much the quantity of Indian university graduates as their quality. India has the world’s ­third-­largest system of higher education, with 10.5 million students studying at 17,625 institutions. Last year, these institutions turned out nearly 700,000 graduates in science and engineering disciplines alone. However, in a recent opinion survey, human resources managers at multinational companies in India said they would consider hiring only 10 to 25 percent of Indian ­graduates.

Virtually all of the world’s academic systems are shaped like a pyramid, with a small, elite sector at the top, a large, relatively unselective middle, and a bottom usually composed of ­vocationally ­oriented postsecondary institutions. Patterns of funding, government support, and management necessarily vary for each sector, with costs per student in the elite sector much higher. India long ago chose a pyramid with a very broad bottom and a miniscule top, and it shows few signs of changing. Its policy has been to spend little on higher education and spread its money widely, devoting only 0.37 percent of its gross domestic product (GDP) to postsecondary education. Only countries such as Japan and South Korea, where the vast majority of students attend largely unsubsidized private universities, approach India’s low government spending levels. China spends 0.50 percent of GDP on colleges and universities, while the United States spends 1.41 percent and the United Kingdom 1.07 percent. Even more remarkably, the share of Indian GDP devoted to higher education has hardly budged in years.

As a result of this approach, the entire Indian system strains even to achieve mediocrity. More fatefully, its top tier is stuck in a state of arrested development. The absence of a significant group of world-class universities is perhaps the most serious impediment to India’s ambition to build a sophisticated ­knowledge-­based ­economy.

At the pinnacle of the nation’s higher education establishment stand the seven Indian Institutes of Technology (IITs), which have won fame around the world for their prowess in engineering, along with five institutes of management, the All India Institute of Medical Sciences, and a handful of schools such as the Tata Institute of Fundamental Research, focused on the physical sciences, and the Tata Institute of Social Sciences. But all of these institutes are fairly specialized, lacking a university’s full panoply of research and teaching programs. And they are small. The seven IITs have a total of 30,000 students, about as many as a single state university campus in the United ­States.

Despite their justified renown, the IITs do not appear near the top of international rankings of universities. (In The Times Higher Education Supplement list shown on page 43, they rank 50th.) Yet their graduates can compete with the best anywhere in the world. Alas, that is precisely what many choose to do, going abroad to take jobs or pursue advanced degrees and not returning. The United States alone is home to an estimated 40,000 IIT alumni, many of them highly successful. (Large numbers of engineering graduates in every country, including the United States, take more lucrative jobs in business management rather than stay in engineering.)

Apart from the specialized institutes, there are some outstanding master’s- and doctoral-level academic departments in India’s universities, and a few schools have fairly high ­standards—­such as the Jawaharlal Nehru University in New Delhi, one of the few institutions sponsored directly by the central government. (Most public universities are funded by the state governments.) A small but significant cadre of undergraduate colleges throughout the country has developed high standards and attracts excellent students. But with few exceptions these places lack ­state-­of-­the-­art equipment, falling far below international standards.

The swollen middle tier of Indian higher education is full of universities and colleges that provide a mediocre education at best. “Poor facilities, abysmal teaching, no accountability . . . a caricatural education,” is the summary offered by Indian-American academics Devesh Kapur and Sunil Khilnani. Faculty members, though not badly paid, have little power and limited job security, and rarely have a role in determining their own curricula. Pedagogy is based on rote learning and “teaching to the exam.” Only about ­one-­third of the nation’s 472,000 academics hold Ph.D.’s. It is taken for granted that many professors will not show up for class; some supplement their incomes by insisting that students take their private “coaching classes.”

As in many other developing countries, moreover, higher education is extremely politicized. Local politicians use colleges for patronage, awarding student slots as well as staff ­positions—­from janitor to ­professor—­to supporters. Considerations of caste, region, and other factors are common in academic appointments and other hires. The institutions are riddled with petty politics and low-level ­corruption.

A significant part of the higher education system’s woes stem from a byzantine structure that stifles diversification and innovation. Under the Indian constitution, education is mainly the responsibility of India’s 31 states, which provide most of the (scant) funding—though the central government exercises significant regulatory power and funds parts of the system directly, including the institutes of technology. Most of India’s colleges are legally private ­institutions, ­established by religious groups, ethnic or linguistic communities, charitable trusts, and the like. Only 30 percent of them receive government financial ­support; ­most of the rest are “unaided” and must rely on tuition and other funding sources. Almost all of the colleges are affiliated with a university and subject to regulations governing such matters as faculty salaries and entrance requirements, which has the effect of stifling any healthy competition. In recent years, however, a few of the best colleges have achieved independent legal status, and seven completely independent private universities have been ­launched.

India is not blind to the dire condition of its higher education. For more than 50 years, official commissions have been offering wise reform proposals. The first IIT was born in 1951 in a moment of enlightenment. But very little has changed. The challenges have seemed overwhelming, money has been scarce, and political will appears ­absent.

A discouraging reminder of the obstacles to improvement came this past spring. Even as the ­blue-­ribbon National Knowledge Commission was at work on new reform  proposals, Prime Minister Manmohan Singh unilaterally announced a dramatic change in the country’s “reservation” policies: At the IITs and other top institutions, which were already required to set aside 22 percent of the seats in each entering class for the former untouchable caste and other disadvantaged groups, the quota would be increased to 50 percent. In the explosive reaction that followed, two members of the commission resigned, decrying what one called the “insidious poison” of politicization. It was all the more discouraging that Singh himself is a former academic and ­world-­class economist who must have known very well that this step, however laudable the professed goal of reducing social inequality, would destroy international competitiveness at India’s top institutions and deal a powerful blow to the fragile meritocratic ethos in Indian higher education. Singh apparently felt compelled to bow to the ­left-­wing members of his coalition government. Critics were quick to point out the cynicism of meddling with  a handful of highly visible institutions while doing nothing to remedy decades of inadequate funding of education at every level that have left nearly half the Indian population ­illiterate.

India is a country of enormous potential, with a huge pool of talented young people who are eager for education and the opportunity to participate in the knowledge economy. Yet to fulfill its potential, India must develop an elite, internationally competitive higher education sector even as it greatly improves the general quality of education, from the universities all the way down through the primary schools. There are few signs that India’s leadership is prepared to take the necessary steps, and recent events indicate that lately it has even been moving backward. A visitor to Elphinstone College a decade from now likely will find it, along with the rest of India’s colleges and universities, in much the same sad state of gentle dilapidation and neglect it is in ­today.