With only 9 percent of India’s youth in the 18-24 age group able to access tertiary education, and widespread protest in India Inc about the employability of India’s 2.5-3 million graduates per year, the best available option is to roll out the red carpet for foreign education providers. Dilip Thakore reports
Even as somewhat belatedly the subject of developing contemporary India’s abundant human capital is beginning to creep higher up on the agenda of the Congress-led 17-party UPA (United Progressive Alliance) government, a not-so-silent war is being fought within the
Congress party and between liberal and left ideologues within the Indian establishment over the issue of permitting foreign direct investment (FDI) in higher education. A draft Foreign Educational Institutions (Regulation of Entry, Operation, Maintenance of Quality and Prevention of Commercialisation) Bill 2007 which could have thrown light on this contentious issue and scheduled to be presented in the prematurely concluded monsoon session of Parliament was scuttled at the last moment.
The protagonists in this subterranean war, the outcome of which could change the destinies of over 90 million Indian youth aged between 18-24 who are currently denied tertiary education, are middle class establishment liberals who admit the glaring deficiencies of the higher education system on the one hand, and status quo leftists and left-influenced intelligentsia who dominate Indian academia on the other. While the growing number of liberals within the establishment are anxious to quickly augment capacity and raise teaching-learning standards in Indian academia to global norms, terrified by the prospect of western, especially American universities setting up teaching shops in India, the communist parties (whose support in Parliament is critical to the survival of the UPA government) have teamed up with leftists in the Congress party – notably Union human resource development minister Arjun Singh – to frustrate FDI in higher education.
Inevitably the liberals within the Congress party are led by prime minister Manmohan Singh, the great reformer who as Union finance minister in 1991 introduced the liberalisation and deregulation legislation which unshackled industry from the socialist licence-permit-quota regime to spectacularly rocket the Indian economy into a 9 percent plus per year growth orbit. An Oxford-educated economist who has worked with the World Bank, the Asian Development Bank and was governor of the Reserve Bank of India, the prime minister is painfully aware that an economy growing at 9 percent plus needs to produce more than the 750,000 employable and/or quickly trainable graduates it does currently. And that the quickest available option for a government running a massive fiscal deficit to augment higher education capacity is by way of encouraging FDI in this sector.
Fortunately Manmohan Singh’s efforts to open up the higher education sector for foreign and indigenous private investment following the example of other Asian countries such as Malaysia, the Philippines and China, is supported by Congress party president Sonia Gandhi, Montek Singh Ahluwalia, deputy chairman of the Planning Commission and Union commerce minister Kamal Nath.
Nath who heads India’s delegation to the World Trade Organisation (WTO), which is negotiating tricky issues such as reduction of massive subsidies which developed nations pay to their farmers so as to improve the access of Indian farm produce to western markets, is particularly keen on liberalising FDI in higher education under GATS (General Agreement on Trade in Services), which also falls within the purview of WTO. Under his guidance the trade policy division of the commerce ministry has produced a detailed 24-page consultation paper titled Higher Education in India and GATS: An Opportunity which argues that “GATS could provide an opportunity to put together a mechanism whereby private and foreign investment in higher education can be encouraged subject to high quality standards and efficient regulation” to transform India into a global education provider.
The logic of inviting FDI and/or integrating hitherto isolationist Indian academia is beginning to appeal to progressives in the tertiary education sector. “It makes huge economic sense to roll out the red carpet for foreign education providers willing to invest in India. We are the largest market worldwide for higher education because 90 percent of youth in the 18-24 age group cannot avail tertiary education due to grossly inadequate capacity in this sector. Therefore to improve access we need to whole-heartedly welcome foreign universities willing to establish campuses in India. The entire process governing their entry should be made as simple as possible under a single window clearance procedure,” opines Dr. R. Narasimhan, the highly qualified (Madras University, IIT-Roorkee, IIT-Madras and Tata Institute of Fundamental Research, Mumbai) director of the SMOT Business School, Chennai (estb.2006).
Dr. Ashima Goyal, an alumna of Delhi School of Economics and Bombay University and currently professor of economics at the Indira Gandhi Institute of Development Research, Mumbai concurs. “There are several good arguments for offering foreign universities liberal entry into India. Perhaps the most compelling reason is that it will enable us to retain many of our bright students who go abroad for higher education, within the country. Moreover their entry into India will help us develop our own higher education institutions, so that in time we could become exporters of education rather than of students. It would also open up opportunities in teaching, making it a more sought after and better paying profession than it is currently,” says Goyal.
However the prospect of western, especially American universities which dominate the global higher education scene and host more foreign students (565,000 including 80,000 from India) than any other country, making a beeline for India, spooks the ideologues and politburos of India’s communist parties (CPI and CPM) who not only have a powerful presence in the Lok Sabha (66 seats), but also within Indian academia. During the past half century with the tacit support of hitherto dominant left-leaning fellow travellers within the Congress party, Marxists and left economists and intellectuals have infiltrated India’s universities and institutions of higher education and research in large numbers.
And given their tradition of thinking with their hearts rather than their heads, left intellectuals within academia enthusiastically endorsed the statist, socialist economic development model which mired the high potential Indian economy in the so-called Hindu rate of growth (3.5 percent per year) for over three decades, depriving millions of citizens even near decent standards of living. Enamoured of the centrally planned Soviet model of development, they also played a dominant role in dumbing down India’s higher education system, which is now giving India Inc, struggling to find trained professionals to manage industrial growth of 12 percent per year, a major headache.
Undaunted, left politicians and the intelligentsia continue to believe that India’s obsolete tertiary education system designed by them can with minor modifications, produce the high quality graduates the fast-growth Indian economy needs. Therefore unsurpr-isingly AIFUCTO (All India Federation of University and College Teachers Organisations) is in the vanguard of those vehemently opposed to the entry of foreign – especially American – education institutions into India on any terms.
Fortuitously, liberal intelligentsia anxiety about augmenting capacity and raising standards in higher education in India has coincided with a supply and outreach push in western, especially American universities and institutions of higher education. Confronted with rising costs of education provision and demographics which foretell plateauing demand for tertiary education, western universities are increasingly relying on larger annual enrollments from abroad, especially from populous countries such as China and India, to shore up their sagging bottom lines. But with the costs of tuition and residence in western campuses having risen to all-time highs, the annual inflow of overseas students is showing signs of tapering off. Therefore for western universities the next big opportunity is to establish campuses in the supplier countries so that they can cater to the huge number of students who aspire to but can’t afford, the high price of western education.
Offshore campuses have been established by several western universities in Malaysia, Singapore, Thailand and Hong Kong to provide tuition, assessment and degrees. Thus far they have received enthusiastic response from parent and student communities who are well aware of the high premia foreign training and academic certification command in their domestic job markets. Although academics and the intelligentsia complain that only second rank universities and/or institutes are entering Asia through twinning arrangements, they tend to fudge the issue that the syllabuses and curriculums they prescribe are qualitatively superior to all except perhaps a small handful of indigenous colleges and universities.
Thus confronted with the prospect of declining admissions domestically because of graying populations, and from overseas because of the rising costs of providing higher education, vice-chancellors and administrators of western – especially cash-rich American – universities are eager to invest and establish campuses in China and India, not only to boost revenue but also to augment their research capabilities. “Certainly American universities are very interested in the Indian higher education market. Many of their delegations have visited India in the recent past seeking collaboration with Indian universities and education institutions,” confirms Dr. Philip G. Altbach director of the Center for International Higher Education, Boston College, perhaps the world’s foremost authority on international higher education trends.
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Limited engagements The reality that contemporary India hosts the world’s largest population of youth – over 500 million Indians are below 25 years of age – has aroused the interest of university and higher education leaders around the world. This is particularly true of American universities which with their contemporary syllabuses, curriculums and deep research capability, dominate global higher education. “The growing American interest in Indian education reflects a confluence of trends,” comments Somini Sengupta writing in the New York Times (March 26). “It comes as American universities are trying to expand their global reach in general and discovering India’s economic rise in particular. It also reflects the need for India to close its gaping demand for higher education,” says the NYT report which followed the visit of a delegation of American university presidents led by Karen P. Hughes, described as “the Bush administration’s envoy for public diplomacy”. According to the report, the US government “wants an easing of rules under a draft law on foreign investment in Indian education”. Although recently the Union human resource development ministry administered by dyed-in-the-wool socialist minister Arjun Singh reluctantly admitted that under the GATS (General Agreement on Trade in Services) 100 percent FDI (foreign direct investment) in higher education is permissible, no American university, several of whom have established satellite campuses in China, Singapore and Qatar, has done so in India. Spooked by the socialist rhetoric of the HRD ministry, confusing laws and Supreme Court judgements which in consonance with an obsolete Soviet worldview abhor the “commercialisation of education” even as they have upheld the right of private citizens “to establish and administer educational institutions of their choice” as provided by the Constitution, American universities have restricted themselves to inexpensive academic agreements with a few selected institutions in India. Among the more notable of them:
Indian School of Business-Kellogg and Wharton. The most ambitious and perhaps sole higher education initiative of India Inc, the state-of-the-art Hyderabad-based ISB, promoted with an investment of Rs.250 crore has several academic curriculums and faculty exchange agreements with some of America’s top B-schools including North-Western University’s Kellogg School of Business and Stanford University’s Wharton School.
Columbia Business School-IIM, Ahmedabad. A student exchange programme was signed in January this year. Moreover the faculties of the two B-schools will develop case histories and materials to acquaint American students with Indian business law and practices.
California State-Lucknow University. The two universities have recently signed an agreement under which California State will help Lucknow U to introduce four-year American style degree programmes.
Carnegie Mellon-Sri S.S Nadar School of Advanced Software Engineering. Under an agreement signed in 2004, Carnegie Mellon offers its M.Sc engineering degree to students of this Chennai-based high-end private college promoted by Shiv Nadar, the promoter chairman of computer software and hardware major HCL Technologies. Under the academic collaboration agreement, students study in SSNSASE for 18 months and six months-one year at Carnegie Mellon. It is pertinent to also note that given the myriad rules and regulations governing admission processes, tuition fees chargeable and affirmative action in favour of socially and economically backward groups, several FEPs which ventured into the dangerous waters of Indian academia have floundered. Among them: a disastrous liaison between the high profile London School of Economics and the South India Education Society, Mumbai, and the Bangalore-based Manipal Education Group’s academic collaboration with the Ohio School of Business. |
Under GATS and the WTO treaty, New Delhi is under pressure to open up the education sector to foreign investment. Liberal opinion in India has also grasped the significance of inadequate capacity in tertiary education and the huge expenditure estimated at $4 billion which 160,000 Indian students incur abroad annually. In the circumstances, the Union HRD ministry presided over by septuagenarian minister Arjun Singh – a committed old world socialist – has been forced to draft the Foreign Educational Institutions (Regulation of Entry and Operation, Maintenance of Quality and Prevention of Commercial-isation) Bill, 2007. But typically as denoted in its draconian title, the Bill intends to make entry and operations of foreign educators as difficult as possible.
Indeed a press note issued by Arjun Singh on March 21 cites the worst practices of the small number of FEIs (foreign education institutions) which sell spurious and/or substandard degrees and diplomas by “resorting to various malpractices to allure and attract students from smaller cities and towns”, as the rationale of the FEI Bill. “The regulation on entry and operation of FEIs is in the public interest to maintain the standards of higher education within the country as well as protect the interests of the students community. An ideal regulatory framework could be one in which reputed institutions are able to enter and operate in terms of India’s national policy, while at the same time substandard or ‘fly by night’ operators are checked and controlled,” says the minister.
It’s a reflection of the extent to which politicians live in a make-believe world that the HRD minister believes that India’s moribund higher education system has standards to maintain and protect. Nevertheless the intent of the Bill is quite clearly to ensure that adventurous FEIs which enter India are as rigidly regulated and controlled as Central government universities and colleges. This intent is indicated by the resolve expressed in the minister’s press note of March 21 to allow FEIs to “enter and operate in terms of India’s national policy” – as defined by the ministry.
Therefore for example under s. 3 of the draft Bill, FEIs are required to be notified as deemed universities (under the University Grants Commission Act, 1956) by the Central government before they can collect fees or award degrees/diplomas. Moreover implicitly admitting that a large number (reportedly 131) of FEIs are already in India, the Bill also explicitly brings them under its purview. In addition under s. 4 of the draft Bill FEIs are not only required to submit documentation attesting their legitimacy and financial viability in their home countries, but also to maintain a corpus fund of Rs.10 crore “or any sums which may be notified from time to time by the Central government”, in India.
Although stringent, these caveats and stipulations are unlikely to deter FEIs suffering the challenge of declining enrollments in developed countries and anxious to enter India which boasts the world’s largest population of 18-24 year-olds estimated at over 100 million, of whom only a tenth are admitted into institutions of higher learning. Yet because of the requirement that they “enter and operate in terms of India’s national policy”, which is vaguely defined, to date not even one foreign university or education provider has established a satellite campus in India, although a few have inked low-cost collaboration agreements with higher education institutions here. They are obviously aware that the intent of the draft FEI Bill 2007 is to place them on the same footing as private colleges and deemed universities in India, with New Delhi retaining the right to determine, supervise and regulate their admission policies, tuition fees and subject them to its affirmative action policy of reserving 49.5 percent of annual admissions for scheduled castes, tribes and OBCs (other backward castes). In short the draft FEI Bill and the minister’s explanatory press note makes it quite clear that foreign education providers will be denied the academic and operational autonomy which are an uncontested given in their home countries.
But while ex facie the draft FEI Bill talks tough vis-Ã -vis FDI in Indian higher education, it’s not as though Arjun Singh and leftists who have quite evidently prepared the draft Bill, haven’t had to make concessions. Liberal academics in favour of the best FEIs establishing a presence in Indian tertiary education, welcome some provisions of the draft Bill which will encourage FEIs to test Indian academic waters. While s. 3(1) of the draft bill strictly prohibits FEIs from levying or collecting any fee for any course of study without prior clearance by the Central government, s. 3(2) makes a significant exception. It specifically exempts academic collaboration and “twinning arrangements” (under which students study for half or part of a study programme in India and the remainder abroad to receive a FEI degree or certification) from any regulation.
“Nothing contained in this act shall apply to a course leading to the award of a degree or diploma through the conventional method of teaching in collaboration, partnership or in a twinning arrangement by a Central university, a state university, institution of national importance, or any other institution of higher education recognised in accordance with law, with a foreign educational institution,” says this proviso.
Anand Sudarshan president of the Manipal and Bangalore-based Manipal Education Group – India’s largest private sector provider of professional (engineering and medical) education which comprises 55 education institutions with an aggregate enrollment of 88,000 students – regards inclusion of the s.3(2) proviso in the draft Bill as “a very promising development”. “It is conventional practice for FEIs entering India to first test the waters through a collaboration agreement or twinning arrangement with an established education provider here. This helps them get a feel and understanding of the complex higher education scenario in India before attempting to establish a deemed university. To this extent the draft Bill provides a road map to FEIs by encouraging collaboration and twinning agreements which will also help Indian institutions to raise their teaching-learning standards,” says Sudarshan.
Yet while the tone and tenor of the draft Bill implicit in its title, is to deter FEIs from entering higher education in India, it would be foolish to deny that some of the misgivings entertained by government and academia about foreign education providers are not justifiable. There is no shortage of case histories which establish that a substantial number of foreign institutions of dubious origin and intent have taken Indian students enamoured of foreign qualifications for a ride, by selling them substandard education and spurious qualifications. And in the absence of any laws and regulations governing collaborations between Indian and FEIs, even genuine twinning programmes tend to be provided by second string foreign universities and institutions. That’s why the draft Bill stipulates elaborate regulations to establish the credentials of FEIs applying for deemed university status. They are obliged to submit certification from their embassies or high commissions testifying that they are established, bona fide FEIs in their own countries and commit to a deposit of Rs.10 crore (s.4).
Self-evidently, these safeguards included in the draft Bill to ensure that foreign education providers entering India raise rather than depress academic standards and don’t rip off gullible Indian students, are in the public interest, and are as likely to be acceptable to indigenous liberals as to the great majority of bona fide FEIs intent upon establishing their footprint in India. Yet if none of the famous universities of the United States, Britain or Australia have as yet ventured to offer even twinning programmes (which don’t require capital outlay) in India, it’s because of confusion about the status of private education providers, including deemed universities. In particular, there’s considerable confusion about their freedom to “establish and administer educational institutions of their choice” – a fundamental right of linguistic and religious minorities recently extended to all citizens by the Supreme Court in its historic judgements in T.M.A Pai Foundation vs State of Karnataka & Ors (2002 8 SCC 431) and P.A. Inamdar vs. State of Maharashtra (Appeal Civil 5041 of 2005).
But taking advantage of an unfortunate “clarification” judgement of a smaller bench of the apex court in Islamic Academy vs State of Karnataka (2003 6 SCC 697) which mandated the establishment of admission and fees committees in the states to supervise admissions and provide guidelines relating to reasonable tuition fees, the Union and state governments continue to micro-manage financially independent, privately promoted institutions of professional and higher education, including deemed universities. Moreover, although the country’s 105 deemed universities are not obliged to follow the Central and state governments’ affirmative action policies currently, Union HRD minister Arjun Singh – a champion of caste-based quotas – has reportedly drawn up a draft Bill which will oblige all institutions of higher education, including deemed universities, to reserve 49.5 percent of capacity for SCs, STs and OBCs.
Quite clearly there is too much policy and regulatory confusion about the status and role of private education providers in general to inspire FEIs to make significant investments in Indian academia. Although the very best and most renowned universities in the US and Britain have indicated clear interest, establishing satellite campuses of their superior standards is a capital-intensive proposition, apart from which they have reputations to lose. “India needs to establish a very clear, transparent and strong regulatory arrangement relating to foreign higher education providers to induce them to enter the country,” opines Dr. Philip Altabach director of the Center for International Higher Education, Boston College (quoted earlier).
Shanmugam Patro, an alumnus of Bhanja Vihar University, Berhampur and currently a Delhi-based legal practitioner who has specialised in studying and interpreting India’s complex education laws, rules and regulations, agrees. “Whatever the compulsions preventing government from introducing transparent legislation governing the entry of foreign education providers into India, it’s very clear that there is rampant confusion on the issue. It took the HRD ministry a very long time to admit that 100 percent FDI in education is permissible under existing legislation. Moreover in the absence of clear directives, regulators of higher education – UGC, NAAC, AICTE etc – have compounded the confusion by interpreting their roles without under-standing jurisprudence. Meanwhile until clear, transparent legislation is enacted, the HRD ministry should provide guidelines including its interpretation of Supreme Court rulings, to encourage reputable foreign universities to enter Indian higher education,” says Patro.
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Commerce ministry Q&A Whether India should allow foreign education providers in a phased manner, after domestic reforms are in place or not at all? Yes foreign education providers (FEPs) should be allowed immediately. In fact, more than 131 foreign education providers (NIEPA, 2006) that are already operating in India should be recognised immediately based on their bona fide credentials. We are unable to implement domestic reforms in time and the law regarding private universities is pending from 1995 before Parliament. Hence, there is no need to wait for domestic reforms to happen. What should be the way in which foreign educational institutions can deliver services in India: through joint ventures or wholly owned subsidiaries? As 100 percent FDI is already allowed in the education sector, FEPs should be allowed through JVs and wholly owned subsidiaries. These should be allowed on both commercial and non-commercial basis. What would be the role of UGC/ AICTE and that of the regulatory body in the home country of the FEP? There should be a single window entry for FEPs. Regulatory body/ accreditation authority in the home country of FEPs to ensure standards/ quality of education and to ensure equivalence of the degrees given in India with the degrees given in its home country by FEP. UGC/ AICTE being expert bodies based on a completely different set of principles only to cater to the needs of domestic educational institutions should not play any role whatsoever vis-Ã -vis foreign education providers. In this respect, the role of Association of Indian Universities needs to be appreciated and strengthened. Whether negotiations under GATS could be used as an opportunity in India to attract investment in higher education and also explore export markets? Of course, yes. India has received requests (for opening up of services) from several countries (Australia, Brazil, Japan, New Zealand, Norway, USA Singapore) in education services in the new round of service trade negotiat-ions launched in January 2000 (GATS 2000 round), which mostly focused on higher education, adult education, and other education services. USA also specified training services and educational testing services and Brazil has also requested the opening up of primary and secondary education services, while there were no requests from the European Community. How much flexibility can be given to FEPs in the areas of setting fee, admission, hiring of teachers, course and syllabi? ‘Setting fee’ and ‘hiring of teachers’ should completely be left for market forces to decide. However, the social responsibility of foreign institutions cannot be excluded. For an inclusive education, more scholarships can be offered by these institutions. ‘Admission’ to be linked with infrastructure and mode of education used by the FEP must be determined by the accrediting authority of the home country of the FEP. The hiring of teachers will be in accordance with international standards. ‘Course and Syllabi’ must, as a rule, be left to the accrediting authority of the FEP in its home country and the university offering the degree. |
While admitting that the current regulatory regime which controls admission, tuition fees and affirmative action is confusing and confining for foreign education providers, Dr. R. Natarajan, former director of IIT-Madras and former chairman of the All India Council for Technical Education (AICTE), discerns some favourable developments on this front. “To expect foreign universities to sharply augment capacity in tertiary education might be a bit far-fetched as typically they tend to establish postgraduate institutions engaged in high-end research. Nevertheless I am in favour of foreign education providers being granted liberal entry norms because they will bring diversity and international perspectives into higher education. Undoubtedly the current regulatory regime is not very encouraging. But fortunately a high level committee chaired by eminent scientist Dr. C.N. Rao to look into this issue has recommended that FEIs should be classified into three categories and accorded differential treatment. The first category will comprise reputable universities like Harvard, Stanford, Oxford etc who will be invited on their own terms. In the case of middling institutions of the second category, terms of entry will be negotiated on a case by case basis. Low end institut-ions in the third category will be required to fully comply with all the regulations applicable to deemed universities. These are practical suggestions which should be accepted and speedily implemented,” says Natarajan.
With only 9 percent of India’s youth in the 18-24 age group being able to access institutions of higher education against 15 percent in China, 50 percent plus in Europe and 80 percent in the US, and widespread protest in India Inc about the employability of the great majority of India’s 2.5-3 million graduates per year, quite clearly the country’s tertiary education sector needs a radical makeover. And the best option available to attain both these objectives expeditiously is to roll out the red carpet for the brightest and best foreign education providers ready and willing to offer their superior campuses, contemporary curriculums and smart pedagogies to India’s eager-to-learn student community. But for this win-win outcome some heavy ideological baggage in government as well as Indian academia has to be jettisoned.
Meanwhile even as scrutiny and debate of the FEI Bill, 2007 has been deferred to the winter session of Parliament, the clock is ticking for wage inflation hit India Inc which is suffering the most crippling skills shortage in its history.
With Autar Nehru (Delhi); Gaver Chatterjee (Mumbai) & Hemalatha Raghupathi (Chennai)
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