An Empirical Analysis of Relationship between Higher Education and Economic Growth in India

International Journal of Research and Innovation in Social Science (IJRISS) | Volume II, Issue VI, June 2018 | ISSN 2454-6186

An Empirical Analysis of Relationship between Higher Education and Economic Growth in India

M. Indira¹, Indru Kumar B M²

¹Professor, Department of Studies in Economics and Co-operation, Manasagangothri, University of Mysore, Mysuru, Karnataka, India
²Research scholar, DoS in Economics and Co-operation, Manasagangothri, University of Mysore, Mysuru, Karnataka, India

Abstract: – “Education is the most powerful weapon which you can use to change the world” – Nelson Mandela

Higher Education plays a vital role in achieving sustainable and inclusive growth of any country. It is an important input in the process of economic growth through its contribution to human capital. Indian Constitution made free and compulsory education to children between the ages of 6 and 14 as a fundamental right. The vision of higher education in India is to realize the country’s human resources potential to its fullest extent with equity and inclusion. The higher education sector, in recent decades has witnessed a remarkable growth in its institutional capacity, enrolment, teacher-student ratio, funding, etc. The rapid expansion of the higher education system at the same time has brought several issues related to equity, efficiency, excellence and access to higher education. Government of India aimed at increasing Gross Enrolment Ratio (GER) in higher education to 21% during the Twelfth five year plan (2012-17).
Since the introduction of new economic policy in 1991 government of India has been encouraging private participation in higher education. According to the AISHE (2014-15) report, there are 757 universities, 38056 colleges and 11922 stand alone institutions and among them 267 universities are privately managed. There are 43 central universities, 14 open universities, 69 institutes of national importance, and 316 public universities. Out of the total higher education institutions 76% colleges are privately managed and among this 61% are private-unaided and 15% are private aided. Over last two decades, a growing Indian economy has led to increased demand for educated and skilled labour. To match the manpower needs of an accelerating economy, private institutions are encouraged to complement government education institutions.
In this scenario, an attempt is made in the present paper to analyze the relationship between the growth of higher education sector and economic development in India by using Granger’s Causality Technique. This analysis is based on the secondary data collected from various published sources.

Keywords: Higher Education, Economic Development, Gross Enrollment Ratio, Expenditure

JEL Code: I23, O11

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