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. Under-investment 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 …