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The foreign university debate

Where angels fear to tread




The government is rushing to allow foreign universities to set up campuses here without really debating the move or even framing guidelines the right way, says Kaushiki Sanyal.

It's rather strange that while the debate over allowing foreign universities to set up campuses in India remains as yet unresolved, the University Grants Commission (UGC), our apex education regulator, is about to notify rules regarding their entry in the country. The government, it seems, is in a bit of a hurry. Presently, Indian institutions can grant degrees and diplomas in collaboration with foreign institutions;but, foreign universities cannot set up branch campuses here without an Indian partner.
There are broadly three perspectives in the debate over the entry of foreign institutions. One, the opponents of the move argue that it would lead to commercialisation of higher education, and restrict access to quality education only to the rich. In response, the move's proponents argue that it would increase choices for students, enhance competition in the sector - with potential for qualitative improvement in the Indian institutions - and provide technical skills for the job market. They suggest that the government can provide easy loans and scholarships to economically disadvantaged students to ensure that they do not lose out. Three, some experts have taken a middle view. They favour allowing foreign institutions so long as there are appropriate regulations in place to ensure that only good quality institutions are allowed entry.

The proposed UGC regulations have also taken the middle path, it appears, by restricting entry to only institutions that are placed in the top 400 as per 'world university rankings' put out by groups such as the Times Higher Education or Quacquarelli Symonds. In addition, only institutions which are accredited and have a track record of a minimum of 20 years in the parent country would be considered. While the purpose for such high entry barriers is to ensure that only quality institutions are allowed to enter, it is an open question whether top institutions would choose to come to India. Till date, hardly any high quality institution has entered India although the regulations notified by the All India Council of Technical Education (AICTE) that allow foreign technical institutions to offer degree or diploma courses either directly or through collaboration with an Indian partner.

It is noteworthy that countries such as South Korea, Singapore, and UAE offer incentives that reduce the costs and the risks associated with establishing a campus in a different country. However, the proposed regulations take it for granted that institutions are willing to come to India and appear to focus on increasing the constraints to entry. These include requiring the foreign institution to operate as a non-profit legal entity;insisting that they maintain a corpus of at least Rs 25 crore for each campus they propose to establish and disallowing any repatriation of surplus income. In fact, it allows foreign institutions to utilise only up to 75 per cent of the surplus income for developing the campus.

Foreign educational institutions would also have to mandatorily publish a prospectus with details of course, fees and other charges and money to be refunded. The institutions would be penalised with a minimum fine of Rs 50 lakh which may be extended to Rs 1 crore if they do not conform to the norms of UGC. However, it is not clear what procedure would be followed to penalise such institutions or whether UGC would have the power to close down these institutions.

According to the National Knowledge Commission and the Yash Pal Committee, the regulations should focus on 'incentivising quality institutions' to enter India while disincentivising sub-standard institutions from entering the country. But why would quality institutions be interested in entering the Indian market if they have to operate under such constraints? It is also not clear if these institutions would have the autonomy to setup their own courses and charge their own fees. Sadly, this is not the government's first misguided attempt to facilitate entry of foreign universities. In May 2010, it introduced the Foreign Educational Institutions (Regulation of Entry and Operations) Bill, which is still pending in the Lok Sabha. This Bill had been examined by the Parliamentary Standing Committee on HRD, which recommended that there be adequate safeguards for stakeholders. It suggested that an independent regulator should monitor fee, curriculum and salary;approvals should be given on a short-term basis first before being extended and the government should devise incentives for foreign institutions to utilise their surplus funds in India.

These current UGC notifications, which do not need legislative approval, are an attempt to bypass the legislative logjam. Besides, there is also a basic lack of clarity in purpose. Does the government want to woo good quality foreign universities or does it only seek to regulate the ones who are interested in coming to India? We can't assume that the two go together. And these regulations fail to serve either purpose fully since they do not provide incentives for quality institutions to enter India but create high entry barriers for other institutions.

Foreign universities are certainly not the panacea for all the ills of the higher education system in India. They would at best bring in some much needed competition into the sector filled with mediocre institutions. Before framing any policy for foreign institutions, our policy-makers need to have a clear understanding on the fundamental question of whether foreign universities need us or do we need them more.


The writer is with the Bharti Institute of Public Policy, Indian School of Business

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