INDIA: US$1 billion loan for education

The World Bank has approved two education projects worth US$1billion to improve the quality of engineering education across the country and to boost the number of children enrolling in and completing elementary school.

India has made significant progress in meeting its education goals especially at the primary level, the bank says. But similar progress has not been achieved in higher education where enrolment rates are only 11% and this has led to a severe skills shortage, especially in the IT, infrastructure, power and water sectors.

The bank's $300 million loan for the Second Technical/Engineering Education Quality Improvement Project will support 200 competitively selected engineering education institutions.

The goal is to produce higher quality and more employable engineers. It will also boost postgraduate education, research, development and innovation at the institutions.

The project is a partnership with India's Ministry of Human Resource Development and this is the second phase of an envisioned 15-year programme that began with the first phase from 2002 to 2009.

"The government of India is renewing its efforts to strengthen higher and technical education," said Roberto Zagha, World Bank Country Director for India. "This focus on higher education, and in particular the technical stream, is vital to address the current skill shortages in the economy.

"This project will help India meet its growing demand for highly qualified engineers - a demand which has been growing parallel to its rapid economic expansion."

The project builds on significant results achieved in the first phase of the project which supported 127 institutions and thousands of academics in well-performing institutions. It has had a considerable impact on quality of education by implementing institutional and policy reforms.

The second phase will respond to two new sector issues: prepare more postgraduate students to reduce the shortage of qualified academics and produce more R&D in collaboration with industry.

"A key challenge is an over-regulated but under-governed higher education system," said Andreas Blom, a senior education economist with the bank and the project team leader.

"Less than 4% of institutions are academically autonomous and only 5% are accredited. The government and the bank have found that that increased autonomy allows the institutions and their faculty to teach students the skills that corporate India demands, in particular problem-solving skills, creativity and flexibility. This in turn enhances the quality of education."