Kerala is one of India's smaller states, lying on the southernmost western side of the subcontinent. Its 579km of Malabar coastline, network of rivers, lakes and canals, and verdant tropical fauna and flora make it a popular tourist destination and worthy of its self-proclaimed title of "God's own country".

Historically an important spice centre trading with Greeks, Romans and Arabs, Kerala's charms are not restricted to its natural delights. It boasts India's highest life expectancy and lowest infant mortality rate and has the country's highest Human Development Index score, with literacy rates well above 90 per cent.

The state's distinctive social and political circumstances also offer some interesting lessons concerning higher education and its role in development.

With a population of 31 million, Kerala has an unusual religious mix by Indian standards - a fifth Christian, a quarter Muslim and more than half Hindu. And although not wealthy - it ranked ninth in gross domestic product among India's 28 states in 2008-09 - it is, by many measures, the most advanced state in India in terms of education.

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Ninety-eight per cent of its population have a primary school within 2km of their home, and primary and secondary education is free. Eighteen per cent of school-leavers go on to further education, double India's average and almost on a par with rapidly developing China, and women constitute more than 60 per cent of the higher education enrolment - the highest in India.

Politically, Kerala is also distinctive. It was one of the first states in the world to elect communists to power, and its current government is a coalition dominated by the Communist Party of India (Marxist). The communists, who have been in power off and on since the state was formed in 1956, have played a key role in shaping its society. Early on, they were able to push through meaningful land reform and their policies have emphasised social services, education and income redistribution.

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An active media with dozens of newspapers keep debate lively and help to promote transparency and a high degree (by Indian standards) of probity in government. Union membership is widespread - including among university and college teachers, students and campus workers. One vice-chancellor said that a large part of her job was to keep track of and consult with unions.

The vast chasm between rich and poor, so evident in India and much of the developing world, seems less obvious in Kerala, where corruption is less endemic and society is more stable.

While the state missed out on India's "industrial revolution", with entrepreneurs perhaps wary of well-entrenched unions, this has meant that Kerala has been spared the pollution that normally follows in the wake of industry, all to the benefit of tourism.

There is not much of an economic base - predominantly agriculture and fishing - to balance the large service sector, and the state is reliant on remittances sent home by workers in the Gulf states, particularly the United Arab Emirates and Saudi Arabia. These remittances account for nearly a quarter of the state's gross domestic product.

To redress the economic imbalance, policymakers are looking to higher education to increase Kerala's attractiveness to India's burgeoning information-technology sector.

The state was quick off the ground in 1990 when India's first technology park was established in its capital, Thiruvananthapuram, but since then Bangalore has leaped ahead to become the country's Silicon Valley, and Kerala has been struggling to catch up.

Kerala's approach to higher education is distinctive in the Indian context. Most of its higher education institutions were at one time supervised and funded by the state government, but resource and budget constraints during the past decade have sparked significant changes.

The University of Kerala is the state's leading institution, but, in keeping with its egalitarian philosophy, the state government has spread support fairly equally through its universities. As a result, relatively few have risen to national or international prominence.

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One exception is the Cochin University of Science and Technology. At one point, the central Ministry of Human Resource Development recognised the university's excellence and supported upgrading it to become one of the Indian Institutes of Technology - a group of 16 engineering and technology institutes declared to be Institutes of National Importance by India's Parliament. However, the plan eventually was shelved because of opposition from within the state.

Other prominent institutions include the Indian Institute of Space Science and Technology, established recently by the central government in the Kerala capital. The Sree Chitra Tirunal Institute for Medical Sciences and Technology, offering postdoctoral and postgraduate medical courses, and the Indian Institute of Science Education and Research, both in Thiruvananthapuram, are also nationally renowned institutions.

Kerala would be well served if these high-quality institutions were closely linked or merged to produce a world-class scientific institution in the state.

India's central government, meanwhile, has made a commitment to sponsor at least one central university in each of its states. It is proposing to build an institution in a rather isolated location in northern Kerala, a move that has baffled higher education experts in the state because it seems unlikely that an institution so far from academic or urban centres will succeed.

India has a well-established "affiliating" system that ties undergraduate colleges to central universities, which impose and monitor a variety of regulations and are responsible for examinations.

The University of Kerala, established in 1937, has 198 affiliated colleges with a total enrolment of about 100,000 students.

The colleges are widely dispersed and the majority are private, managed by a variety of religious, social and other non-profit organisations. Some are partially funded by state government, and these tend to have better facilities.

But recent years have seen the appearance of a number of private colleges eschewing government funding and offering more vocationally oriented courses.

This trend has left university authorities with the headache of having to provide affiliation for colleges that may be of questionable quality.

Nearly half the affiliated colleges in Kerala are controlled by private management, mainly sponsored by Christian or Muslim minority communities. Facilities in most of these are well below international standards, often with outdated laboratories, rudimentary IT facilities and inadequate libraries.

While several arts and science undergraduate colleges - such as University College in the state capital or Maharaja's College in Kochi - are able to attract bright students, facilities are far from world class.

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Most high-flying students opt for professional courses in engineering, medicine and business. Currently there are 96 engineering colleges in Kerala. Almost 90 per cent of them started operating in the past decade, and only 11 are government sponsored.

To raise the quality of higher education being offered in the state, Kerala has recently initiated some of the reforms recommended by national authorities. Significant changes aimed at improving learning involved introducing a semester system, reorganising curricula and revamping course teaching and assessment. Undergraduate examinations were overhauled to provide better assessment through more frequent testing and evaluations tied more closely to course content.

In parallel with these changes, Kerala set up a Higher Education Council to advise the state government, conduct research into higher education issues and serve as a forum for discussion. It does not have the power to implement reforms but can make recommendations to government and universities.

The rapid and largely unregulated expansion of new private colleges and specialist post-secondary institutions has been a mixed blessing for Kerala. Although they satisfy demand for greater access, many are of dubious quality, operate on the edges of quality control and are largely run with profit in mind. They serve high-demand areas such as management, IT and related technical fields. A few are medical colleges. Despite a good deal of grumbling, little action has been taken to control these institutions.

In common with all regions of India, the many colleges affiliated to universities need to be appropriately supervised but at the same time permitted leeway to start innovative programmes and achieve a degree of autonomy.

Perhaps an effective accrediting system, supervised by the Higher Education Council or some other governmental body, could enforce a basic standard of quality, removing some of the burden from the universities.

At the same time, a creeping inequality has arisen in the system because of the variable quality of primary and secondary schooling.

Admission to the medical and engineering colleges in Kerala is based largely on an entrance examination.

Students from schools affiliated to the Central Board of Secondary Education or the Council for the Indian School Certificate Examinations - which are predominantly those in the unaided, for-profit sector - have a better chance of achieving high scores in this examination.

These schools account for only 20 per cent of pupils. Of those who excel in the entrance examination for professional courses, most come from the middle and upper strata of society, children of parents with the means to send them to entrance-coaching centres.

At the same time, choice has become an important feature of Kerala's higher education system. Students and parents are acutely conscious of the seemingly inseparable link between academic choice and career. The emergence of this aspirational middle class has resulted in a growing number of students from the state going abroad to study.

Kerala has quietly provided acceptable-quality higher education, by Indian standards, to a remarkably large proportion of its population. While it has implemented several meaningful reforms in recent years, higher education remains an issue of concern for the state government and the public. A few policy initiatives may be useful to further improve the system.

The state's higher education institutions are largely similar in quality, focus and funding. With the few exceptions noted here, none stands out either within the state or nationally.

A mass higher education system needs to be differentiated: it requires a variety of funding patterns supporting institutions with different strengths focused on different missions.

Kerala needs at least one world-class university - an institution that can attract the best students in the state, be recognised as one of the top universities in India, and build an international profile.

Achieving this will not be easy, given Kerala's strong tradition of egalitarianism, but it is necessary. The University of Kerala, perhaps merged with high-profile scientific institutions based in the capital, would be the natural choice, along with the Cochin University of Science and Technology, to become the state's key focus.

This does not mean that the other universities would be neglected. Some would focus on teaching and serving their specific regions, while a few, perhaps those specialising in science and technology, would retain some research mission.

Kerala's universities have the potential to jump-start the state's move into the knowledge era. They can provide the training needed for a new generation of professionals ready to work in IT and other knowledge industries.

However, Kerala is making a late start. Bangalore, for example, is far ahead, but Kerala has the advantages of a well-educated workforce with a tradition of hard work and an ability to collaborate. Improving the quality of engineering education would be an important step.

IT companies estimate that only a fifth of engineering graduates in India can be put to work immediately; the rest need additional training. If Kerala can educate engineers who do not need expensive further education, it will improve its ability to lure high-technology firms to the state. These graduates will also be competitive on the international job market.

Expansion of Kerala's higher education system will continue, although the pressures may be somewhat less than in other parts of India because of Kerala's impressive access rates.

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Careful attention needs to be given to the organisation of the system. Additional funds are required to transform at least one university into a research-intensive institution, while at the same time supporting a better-defined, differentiated higher education system.