How to Establish Private University in India

Apart from Central, state, and deemed universities, private universities too are gaining a lot of prominence in India. Several parties seem to be interested in starting their own private universities. However, the question remains - How to establish a private university in India...Well, let's check out all about private universities and the step-by-step procedure for starting a new private university in India.

So, what is a Private University?

"A private university" is a university that is duly established through a State / Central Act either by a Society registered under the Societies Registration Act 1860, or a Public Trust or a Company registered under Section 25 of the Companies Act, 1956.

How to Establish a Private University in India?

Step 1 - Develop a Business Plan

Start with the basics. Write and develop a plan specifying all the basic necessities to open a university – market research, how university works, the budget required, concerned laws, licenses required, the land needed along with a proper analysis. 

Step 2 - Register yourself as a Society/Trust/Company

As an individual you cannot open a private university. So, first and foremost you will have to seek support from friends/associates to form a committee and then the committee will have to register itself either as – (1) a society under the Societies Registration Act, 1860 (Central Act No. 21 of 1860) or  (2) as a public trust registered under the State Public Trusts Act, or the Indian Trusts Act, 1882 (Central Act No. 2 of 1882) or under the relevant laws in any other State or Union Territory or (3) A Company registered under Sec 25 Companies Act, 1956. 

Step 3 - Funding – Approach Banks/Financial Institutions that Provide Loans

The total investment required to establish a private university would be anything between 20-30 crores. So, you will need secure funding. As an edupreneur, you will have to approach banks, financial institutions, angel investors, VCs to collect the lump sum amount.

Step 4 - Submit an Application/Proposal to the University Grants Commission or UGC 

As a society/trust/company you shall submit an application to the University Grants Commission (UGC) along with a detailed business proposal to UGC with a demand draft of Rs. 1 lakh in favour of the Director, Higher education. 

Along with UGC, you will also have to submit the application form for approval from these statutory bodies as well – Medical Council of India (MCI), Bar Council of India (BCI), National Council for Teachers Education (NCTE), All India Council for Technical Education (AICTE), Indian Nursing Council and Distance Education Council (DEC) etc.

The Proposal that you will make should have the following details –

(a) the details of the society/trust/company and copies of its registration certificate

(b) the name, site and head office of the proposed University; 

(c) the proposed University’s objectives; 

(d) explanation regarding the need of establishing the proposed University;

(e) particulars - whether the University would be single domain or multidomain. In case of multiple domain, you will have to give the details of the specific proposed domain(s) such as law, engineering, management etc.

(f) the type and nature of programs to be undertaken by means of Conventional / Open / Distance / Online / Vocational and/or any other mode by the proposed University 

(g) whether or not the proposed University plans to undertake programs related to local needs, and benefits to farmers and/or women. If so, include the instruction, nature of teaching, and training along with the mention of the research activities that would be undertaken by the University. 

(h) the total fee structure along with a detailed fee policy for concessions, rebates in fees, and scholarships to socially, and economically backward families including ST/SC, handicapped and underprivileged students. 

(i) the proposed structure for selecting students for admission to the programs

(j) the expertise and experience of the society/trust/company in the concerned disciplines

(k) availability of training facilities and academic research to teaching as well as non-teaching staff at the disposal of society/trust/company, if any; 

(l) proof of land ownership or plans for procurement of land and infrastructure for the proposed University in a phased manner along with funds available / plans for fund generation for the same;

(m) details of plans for the development of campus - construction of buildings, infrastructure facilities, procurement of technical equipment, and development of structural amenities, etc. along with the phased programs for infra and campus development within the first five years of its existence should be submitted. 

(n) details of playgrounds, and facilities for games/sports as well as extra-curricular activities like NCC - National Cadet Corps, NSS - National Service Scheme, Scouts and Guides, etc; 

(o) the phased expenditures of capital for the next 5 years along with its sources of finance; 

(p) course wise, estimated recurring expenditure or activity wise, estimated expenditure per student; 

(q) the outline for funds generation internally through fees from students, and externally, from revenues anticipated from industry collaborated projects, consultancy services and other activities 

(r) if University plans expansion; details of proposed colleges, off-shore campus, off-campus centers and study centres to be submitted as per the regulations and pre-requisites of UGC and other concerned statutory bodies; 

(s) the arrangements for academic auditing; 

(t) information about financial resources of the society/trust/company, its promoters, along with details of plans for funds to be arranged from banks, financial institutions or angel investors, agreeing to offer the funds; 

Step 5 - Is where the UGC will Examine Your University Proposal

1. The application that you submit to UGC will be examined by an inspection committee

2. The inspection Committee shall consider the University project report on the following grounds: -

1. financial capability and resources of the society/trust/company or its promoters and its capability to construct the proposed University and build its structure; 

2. background and reputation of the society/trust/company/promoters along with its experience and expertise in the field of education;

3. potentiality of developing courses that not only have new features but also include emerging branches of learning;

(3) While considering the university project report proposal, the committee may call for information from the society/trust/company as it thinks appropriate for the purpose.

(4) On and upon consideration of the university proposal, the Committee shall submit its report to the state Government within a time of 2 months from the date of its very first meeting. 

(5) During the scrutiny of the proposal if any deficiencies are observed it shall be communicated to the society/trust/company for its removal. Also, specific recommendations too can be communicated for compliance. 

(6) The society/trust/company will then implement these suggestions/changes and again submit the report within reasonable time. 

Step 6 – You Will Get the Approval Letter Along with a List of Procurement

Now the receipt of the report of the UGC inspection committee goes to the state government and if the State Government is content, it may issue a letter of intent to establish the University within one month of the submission of the report and ask the society/trust/company to: – 

(a) establish an Endowment Fund for the University. The amount of endowment fund would be 5 crores rupees for single-domain and 8 crores for multi-domain. This fund will be pledged to the Government (which can be increased by notification issued by State Government from time to time).

(b) acquire land for main campus, not less than 10 acres for single domain and not less than 25 acres of land for multi-domain. The society/trust/company will be given an essentiality certificate to procure required land/property and other facilities for the establishment of University campus. 

(c) construct - administrative building of at least 1000 sq m, academic building (including labs, library etc) of at least 10000 sq m and adequate residential accommodations for hostels, teacher accommodation which shall be increased to house at least 25% of student strength in each course within the first three years. 

(d) purchase journals and books as per the norms of regulating bodies or of at least Rs.10 lakhs, whichever is higher, and give undertaking to invest within first 3 years of existence.

(e) purchase computers, equipment, furniture and other immobile assets and infrastructure facilities as per the norms of regulating bodies or worth 20 lakh rupees and give undertaking to acquire within the first 5 years of existence.

(f) undertaking to appoint atleast three Assistant Professors, two Associate Professors and one Professor having prescribed education qualifications and essential supporting staff in each of the department; 

(g) undertaking to start co-curricular activities like debates, seminars, quiz programs and extracurricular activities like sports, games, NCC, NSS etc. for the advantage of students as per the norms laid down by the regulating bodies; 

(h) undertaking for PF (provident fund) and welfare programs for the employees of the University; 

(i) provide information and full conditions as prescribed by UGC, AICTE or any other statutory education body established by Union or State Government; 

(j) give undertaking not to dissolve the University with 15 years of its establishment. If done, all the assets of the University shall vest with the Government; 

(k) give undertaking that all the assets of the University will vest with the Government if the University is dissolved on account of the contravention of provisions of the Act, Rules, Statutes, Ordinances, Regulations, Directives of the Government and other statutory bodies;

Step 6 – You Will Have to Submit a Compliance Report (Within a Period of Two Years)

(1) The sponsoring body (society/trust/company) within a period of two years will have to submit a compliance report, an unambiguous affidavit, and all the necessary documents mentioned in the letter of intent to the state government. 

(2) The compliance report will then be verified by the state government committee 

(3) The sponsoring body (society/trust/company) will have the facility to include any additional details during these 2 years and the amended part of the proposal will be reviewed again. Once reviewed, approval will be given if the committee finds it fit. 

(4) During the scrutiny of the proposal if any deficiencies are observed it shall be communicated to the society/trust/company for its removal. Also, specific recommendations too can be communicated for compliance. 

(5) The sponsoring body (society/trust/company) will submit report to the Committee regarding the removal of deficiencies and compliance of the recommendations communicated as above. 

(6) Subject to clause (1), the Committee shall submit its report within one month to the State Government from the date of its constitution postulating whether the sponsoring body (society/trust/company) has fulfilled the necessities and conditions laid down in the LOI. 

(7) If the sponsoring body (society/trust/company) fails to obey with the provisions of LOI (letter of intent) within a maximum period of 2 years from the date of issue of LOI, the proposal submitted shall stand rejected and the LOI issued shall be deemed to have been withdrawn.

(8) Still, the State Government may extend the term of LOI for a further period of one year if such a request is made by the Sponsoring Body (society/trust/company) and the State Government is satisfied by the reasons of Sponsoring Body for the extension of the LOI.

Step 7 – Enlisting of the Proposed University in the UGC List

(1) Once the state government receives a satisfactory commendation of the Inspection Committee, it will table a separate Act before the State Legislature for the University’s approval. Post this, the State Legislature will pass a distinct Act for the creation and incorporation of the Private University - permitting the Government to issue a Gazette Notification. 

(2) This notification will be sent to UGC and MHRD. The Sponsoring Body (society/trust/company) will also have to make an application to UGC to enlist their newly incorporated University in the UGC List of Authorized Universities.

(3) This newly formed Private University must meet the regulations, notifications, norms and guidelines as laid down by UGC from time to time.

(4) The University shall maintain standards as prescribed for college-level institutions by the Statutory/Regulatory body concerned, such as AICTE, MCI, NCTE, BCI, DCI, MC and shall obtain their approval for running various programs. 

(5) The Private University will be required to get itself assessed by NAAC within three years of its establishment and will also have to fulfill all other criteria/requirements laid down by several statutory bodies as applicable.

This is how to establish a private university in India by following the above-mentioned steps.

Source and References:

UGC – The University Grants Commission Act, 1956

UGC (ESTABLISHMENT OF AND MAINTENANCE OF STANDARDS IN PRIVATE UNIVERSITIES) REGULATIONS, 2003