Comparative Analysis of Indian Public and Private Universities Using Income and Expenditure-Based Financial Ratios

Abstract

Financial management plays a vital role in ensuring the sustainability and growth of higher education institutions. In India, public and private universities operate under different funding mechanisms, raising questions about how these differences affect their financial practices. This study conducts a comparative analysis of the financial management practices of two public universities-Jawaharlal Nehru University and the University of Hyderabad-and two private universities-Kalinga Institute of Industrial Technology and Thapar Institute of Engineering and Technology-over the period 2016 to 2020. Five key financial ratios were examined: dependency ratio, fee income ratio, expenditure ratio, operating surplus ratio, and revenue diversification index. Mean values for each ratio were calculated over the five-year period. To assess differences between institutional types, an independent samples t-test was conducted. The statistical analysis revealed no significant differences between public and private universities across the selected financial ratios. This suggests a convergence in financial behavior, despite differing sources of funding. The findings indicate that public and private universities in India are adopting similar financial management strategies, reflecting evolving norms of financial governance and adaptability. These insights contribute to a deeper understanding of financial sustainability in Indian higher education and offer policy implications for funding models, institutional planning, and financial resilience.