India’s higher education system is one of the largest in the world, with over 1,000 universities and over 40,000 colleges providing education to millions of students. Yet, scale has not translated into global competitiveness, with only a handful of Indian institutions ranked among the world’s top universities. Persistent challenges include limited high-quality research outputs, rigid governance structures, weak academic-industry relationships and gaps in research infrastructure. Central and state universities remain heavily dependent on limited government funding, while private institutions vary widely in quality. The result is a system that excels at producing large quantities of graduates but struggles to emerge as a global research and education centre. Redressing this imbalance requires rethinking institutional design and financing models. A useful template lies in the transformation of India’s airport sector through a public-private partnership (PPP) model.
The transformation of India’s airport sector through the PPP model over the past three decades has fundamentally reshaped airport infrastructure by introducing efficiency, investment and global standards. Private participation has improved passenger experience, operational efficiency and capacity expansion while mobilizing significant private investment that would otherwise have put pressure on public finances. Importantly, this change has taken place within the ambit of a well-defined regulatory framework, with the Airports Economic Regulatory Authority of India (AERA) playing a supervisory role in setting tariffs and user charges. This has ensured that private operators cannot impose arbitrary costs on passengers, while also providing sufficient leeway for private operators to get adequate returns on their investments. This balance between market efficiency and public accountability provides a powerful template for other sectors, including higher education.
The first lesson to be learned from airport PPPs is their ability to mobilize large-scale private investment without sacrificing public oversight. In India’s PPP airport model, the government generally retains a strategic stake, ensuring that public interest objectives, such as accessibility and affordability, are protected even as private players bring capital, expertise, execution speed and global talent.
Second, the PPP model enables revenue diversification, an area where Indian universities lag far behind their global counterparts. Under PPP, airports have successfully leveraged non-aeronautical revenues such as retail, real estate, advertising and hospitality to cross-subsidize operations and investments. Similarly, leading global universities generate substantial income from endowments, patents, industry partnerships and alumni contributions. In contrast, most Indian institutions depend heavily on tuition fees and government funding. A PPP-driven university ecosystem can change this financial model by monetizing intellectual property, launching startups, and creating innovation districts.
Third, PPP airports are able to attract global airlines to operate from their airports by offering competitive pricing, add-on services such as MRO operations. Along with adopting digitalization and automation to increase efficiency, this has improved the passenger experience. Drawing a parallel to higher education, the most significant benefit of PPP universities will be their ability to compete for global talent. Unlike traditional public institutions hampered by rigid pay scales and bureaucratic recruitment processes, PPP institutions supported by strong financial capacity can offer globally competitive salaries, research grants and performance-linked incentives. This enables them to attract top-tier faculty, researchers and academic leaders from around the world. The result is not only improved teaching quality, but also a significant strengthening of research output and global academic visibility. In fact, financial strength translates directly into intellectual capital. Incorporating private sector dynamics within academically mature institutions ensures sustained academic progress on multiple fronts.
Finally, as airports operate as complex ecosystems involving airlines, logistics providers, retailers and technology firms, PPP operators are more amenable to collaboration and foster collaboration. Implementing this model in universities will strengthen the academia-industry gap, which is arguably one of the weakest links in India’s R&D ecosystem, and encourage deeper industry engagement. This will also improve curriculum design, research funding and skill development. This is essential not only for employment but also to create a workforce capable of innovation-led growth.
Many of India’s famous universities, which were once globally recognized, have gradually lost their stature. For example, the mathematics department of Andhra University in Visakhapatnam once had T Vijayaraghavan (student of GH Hardy), V Rama Swamy (student of Littlewood) and S Choula (a distinguished number theorist), but such caliber is now rare in central and state universities. On the other hand, institutions like BITS and ISB have already demonstrated that private participation in India’s higher education can lead to successful long-term outcomes. But, establishing a high-quality private university from the ground up is a capital-intensive and time-consuming process, requiring large upfront investments in infrastructure, faculty recruitment and brand building, often taking decades to achieve credibility and scale.
Therefore, the PPP model provides a more viable alternative by giving private status to existing public universities, enhancing them with private capital and managerial efficiency while freeing up public finances. This will significantly reduce the duration of pregnancy while increasing the quality. A phased approach, where a public institution is eligible to convert to PPP only after achieving a certain stature, academic maturity, governance stability and credibility, will preserve the public ethos while being able to achieve the efficiency of the later phase.
However, the adoption of PPPs in higher education is not without challenges. Lessons from the airport sector highlight the importance of strong regulatory oversight, transparent bidding processes and well-designed, forward-looking concession agreements. Therefore, a sector-specific regulatory oversight body, similar to the role of AERA in airports, is required to monitor the operations and performance of these universities. Additionally, the government should retain some key positions on the boards of governors of universities to prevent excessive fee increases, while ensuring that affordability along with quality remains a core principle. Nevertheless, the proposed model of converting mature public institutions into a PPP structure ensures that public investment creates core strengths, which are then enhanced through private participation.
The success of the PPP model in India’s airport sector offers an attractive blueprint for change in higher education. By adopting a phased and well-regulated PPP approach for academically mature universities, India can unlock investment, improve quality and strengthen research capacity. Importantly, this model avoids the long lead time and high costs associated with the creation of private universities by upgrading existing public institutions. If implemented effectively, PPPs can help transform India from a system focused on scale to one defined by quality and innovation.
Given its demographic advantage and growing economy, India is well positioned to adopt such models, provided it adopts a strategic, phased and well-regulated PPP framework. Leading universities around the world leverage private funding while maintaining a strong public mission through research partnerships and innovation ecosystems. In a knowledge-driven global economy, strengthening higher education is critical for long-term competitiveness, making a calibrated PPP approach imperative for India’s future.
(Views expressed are personal)
This article is written by Jeetamitra Desai, Professor and Member of the Board of Governors, IIM Bangalore.
