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It is said that without education, a man is no better than an animal. It is only through systematic education, human beings have made remarkable progress in science and civilization through many a centuries. After independence, Indian higher education sector was predominantly under the control of the government. It was only the ministry of human resources development at the center and education ministries at the state level which established many universities, IIT, IIMs and centers of research. The role of private sector in promoting higher education and research was negligible. The reason was that education was regarded, not-for-profit initiative. Therefore, private individuals had established some educational institutions only as part of philanthropic activity. Since government was responsible for the entire gamut of higher education, it was natural that fees collected from the students was only a miniscule, compared to the expenditure government had to incur on their education. After passing out of the premier medical, technical and management institutions, students looked for greener pastures in foreign countries due to higher standard of living available there.
Educational infrastructure and capacity built by the government after independence has proved insufficient for growing number of youth aspiring for higher education. Hence many students take a flight to US, UK, Australia, Newzeland and Europe every year for their educational pursuits. According to Assocham, half a million Indian students spend around $13 billion a year on higher education abroad. According to a report in The Hindu, only 10% of the students are pursuing higher education in India, and this has to be increased to 20% by 2020 if India is to provide healthy competition to developed countries. Thus, private sector has very good scope in the field of higher education.
Entry of Private Sector
From the beginning, private individuals and societies have been allowed in a limited way to set up degree and medical colleges and also technical institutions by affiliating with a university having its jurisdiction. For technical and medical education, AICTE and Medical Council of India (MCI) are respective regulatory bodies. In present times, state governments have been very liberal in granting permission to societies to set up engineering, medical and management institutions. However, the drawback of this arrangement is that due to lethargy of government universities and centralization of decision making authority, curriculum revision and monitoring faculty and infrastructure for quality purposes has taken a back seat. In most cases, the managements of affiliated institutions have no much responsibility once they secure university affiliation and approval from regulatory authorities. They are contented with the collecting fees and adding courses and students, thus expanding their revenues. Even though India produces technical graduates in lakhs, they score very less in terms of employability. According to NASSCOM only 25% of the total engineering graduates have requisite skills needed for the IT industry.
Taking into account the capacity crunch in government institutions and to improve the quality of higher education, many state governments and also University Grants Commission (UGC) have accorded private and deemed university status to many educational institutions after
they satisfied all the norms and regulations. Previously private institutions such as Birla Institute of Technology and Science, Pilani were compared with IITs for quality standards but generally public disapproved private institutions because of the high fees they charge, compared to government institutions. However, one should realize that private institutions do not receive any grants from the government for the development of their infrastructure. Also middle class population in India is growing economically and would be more than willing to pay for value education.
The newly recognized private and deemed universities have been taking enough measures to introduce innovative courses and have designed their curriculums according to the needs of the market. They also have tie-ups with foreign educational institutions so that faculty and students can have better exposure to the cutting-edge research and developments in their fields. According to a report in Times of India, compared to India’s 27000 foreign students, Australia has four lakh foreign students. Thus private institutions would also be able to attract students from abroad if they are allowed to expand their activities in a regulated manner.
Conclusion
It is necessary that government provide a level playing field for both government and private institutions in the field of education. Government institutions must not be promoted at the expense of private institutions only as a vote catching gimmick. Private universities should be provided all the facilities on par with industry without compromising their autonomy so that India becomes an educational hub in the world. This would also encourage reputed foreign universities to set up their centers in India. It is necessary that government establish regulatory agencies on the lines of Insurance Regulatory and Development Authority (IRDA) in the field of higher education so that people do not have any misconceptions with regard to these institutions.
Sources(i) www.timesofindia.com (ii) www.assocham.org(iii) www.thehindu.com(iv) http://www.ias.ac.in/currsci/oct252008/1003.pdf(v) http://www.nasscomfoundation.org/Published: 2009-09-07 Author: MANOJ JOSHI
About the author or the publisherPROFESSIONAL EXPERIENCE Six years experience in Instructional Design, Courseware Development (Computer Science and Physics subjects) and Content Writing as Faculty Member in ICFAI University, Hyderabad (June, 2003 to Present).
PUBLICATIONS• Syndicated Loans, The Global Scenario.Manoj Kumar Joshi.“Professional Banker”April, 2009.• Financial Inclusion: Need for No-Frills Account. Manoj Kumar Joshi. “Professional Banker”April, 2008
Education in IndiaEducation in India: Past, Present and the Future. Ideas, Policies and Initiatives
July 27, 2008
Section 25 companies to be allowed to invest in higher education in IndiaAccording to a Business Standard report,
Private and foreign corporate investment may soon get to flow into Indian higher
education with the government considering a move to reform policy that hinders
such financing.
Currently, it is not possible for non-profit companies under Article 25 of the
Companies Registration Act — like industry associations — to set up an institution
and get university status and recognition from the University Grants Commission.
Educational institutions in India can be set up only by trusts, societies and
charitable companies, but the profits cannot be taken out of the institution and have
to be reinvested. Not only does this restriction hamper expansion, it also
encourages promoters to resort to creative accounting to take out profits from the
institutions.
Now, under encouragement from an influential political ally from Maharashtra, the
United Progressive Alliance government is expected to clarify this clause, sources
told Business Standard.
But this report doesn't indicate that for-profit higher education will be allowed - it
only seems to indicate that in addition to non-profit trusts or societies, non-profit
Section 25 companies will also be allowed to set up higher education institutions,
which is not as big a step as what is being considered in the primary education
space. A recent report had suggested that for-profit investment in primary education is
under consideration.
So, what is a Section 25 company? The Indian Companies Act (1956), provides a
definition of a section 25 company.
Section 25 POWER TO DISPENSE WITH "LIMITED" IN NAME OF
CHARITABLE OR OTHER COMPANY.
(1) Where it is proved to the satisfaction of the Central Government that an
association
(a) is about to be formed as a limited company for promoting commerce, art,
science, religion, charity or any other useful object, and
(b) intends to apply its profits, if any, or other income in promoting its objects, and
to prohibit the payment of any dividend to its members, the Central Government
may, by licence direct, that the association may be registered as a company with
limited liability, without the addition to its name of the word "Limited" or the
words "Private Limited".
(2) The association may thereupon be registered accordingly; and on registration
shall enjoy all the privileges, and (subject to the provisions of this section) be
subject to all the obligations, of limited companies.
(3) Where it is proved to the satisfaction of the Central Government - (a) that the
objects of a company registered under this Act as a limited company are restricted
to those specified in clause (a) of sub-section (1), and (b) that by its constitution
the company is required to apply its profits, if any, or other income in promoting
its objects and is prohibited from paying any dividend to its members, the Central
Government may, by licence, authorise the company by a special resolution to
change its name, including or consisting of the omission of the word "Limited" or
the words "Private Limited"; and section 23 shall apply to a change of name under
this sub-section as it applies to a change of name under section 21.
(4) A firm may be a member of any association or company licensed under this
section, but on the dissolution of the firm, its membership of the association or
company shall cease.
(5) A licence may be granted by the Central Government under this section on
such conditions and subject to such regulations as it thinks fit, and those conditions
and regulations shall be binding on the body to which the licence is granted, and
where the grant is under sub-section (1), shall, if the Central Government so
directs, be inserted in the memorandum, or in the articles, or partly in the one and
partly in the other.
(6) It shall not be necessary for a body to which a licence is so granted to use the
word "Limited" or the words "Private Limited" as any part of its name and, unless
its articles otherwise provide, such body shall, if the Central Government by
general or special order so directs and to the extent specified in the directions, be
exempt from such of the provisions of this Act as may be specified therein.
(7) The licence may at any time be revoked by the Central Government, and upon
revocation,
Not that big a difference from the way non-profit trusts or societies operate in India.
The Business Standard report also goes on to suggest that with the shackles of the
Left Parties removed after the recent confidence vote, there will now be movement
on the pending Foreign Education Providers (Regulation) Bill to allow foreign
universities to operate in India.
There is also renewed hope for a Bill allowing foreign universities and institutions
into India to be tabled in Parliament, judging by Human Resources Development
Minister Arjun Singh’s remarks at a conference of state education ministers two
days ago.
The Left parties were the principal opponents of the Foreign Education Providers
(Regulation) Bill, which was cleared by the Cabinet in 2007 but never introduced
in the Lok Sabha although it was listed in the agenda papers.
“We have tried to accommodate some of the concerns. We will try to introduce the
Bill in the Lok Sabha session beginning August,” Singh said. The Bill seeks to
regulate foreign institutions setting up campuses in India. A contentious issue is
whether caste-based reservations would apply to these institutions.
Both Oxford and Stanford Universities have evinced interest in setting up
campuses in India but have been hesitant about moving forward until they are clear
about the degree of regulation, funding and other issues.
Experts say the moves would provide clarity on funding of higher education
institutions by overseas entities. "This will probably provide funding clarity for
foreign institutions like charitable organisations or NRIs wanting to set up facilities
in India.
Posted by Satya at 12:57 PM in Business of Education, Foreign Universities in India, Higher Education, Private Initiatives | Permalink | Comments (19) | TrackBack (0)
May 10, 2008
International higher education headed for a sub-prime style crash?So says Philip Altbach, in an article in The Times Higher Education.
Just as many universities want to be global players, so in the housing sector, buyers
and financial industries wanted to participate in a growing and lucrative market.
House prices were rising fast, and few questions were asked about products, sellers
or buyers. The market was allowed to function without constraint. "Irrational
exuberance" set in, with the market becoming saturated - a "bubble" mentality. The
bubble has now burst and many countries face very serious economic and social
consequences.
International higher education stands in the middle of that cycle - somewhere
between exuberance and a bubble - so now is the time to examine which actions
are sustainable, which policies will serve the interests of students and the academy,
and which actions constitute mistaken policy or greed.
International education has become big business, with perhaps 3 million students
studying outside their own countries, and billions of pounds, euros and dollars
being generated from tuition, living expenses, branch campuses, franchises and
much else. No one knows how many branch campuses exist, but estimates are in
the hundreds, almost all in developing or middle-income countries. The market is
large, growing and basically unregulated. It is indeed the Wild West or, more
accurately, the Wild East.
One might take the view that "the market will sort itself out". Here again, a
comparison can be made with sub-prime mortgages. In that sector, today's crisis
was reached by allowing unscrupulous players to operate, and by encouraging
respectable banks to buy up risky debt with little regulation. There is a similar
mentality in international higher education. In this largely unregulated market,
some sellers are prestigious universities hoping to build links overseas, recruit top
students to their home campuses and strengthen their brand abroad. But many more
are sub-prime institutions: sleazy recruiters, degree packagers, low-end private
institutions seeking to stave off bankruptcy through the export market and even a
few respectable universities forced by government funding cutbacks to raise cash
elsewhere.
Buyers such as students but also institutions in developing countries, are similarly
unregulated, sometimes ill-informed and often naive. Most tragically, students buy
services without much information or understanding. Uninformed or simply
avaricious institutions in developing countries may form partnerships with low-
quality colleges and universities in, for example, the US, Australia and the UK, and
receive substandard teaching or degree courses. Regulation may be absent or
inappropriate, making quality assurance impossible. There are not enough top-
quality universities in countries such as China and India to absorb all the potential
overseas partners. Further, most institutions worldwide lack the infrastructures to
engage successfully in sophisticated international initiatives.
I couldn't agree more with his suggestion and his proposed solution to avoid the
impending crash.
Clear regulation is needed, probably by government authority, to ensure that
national interests are served and that students do not receive a shoddy service from
unscrupulous providers. This will also help universities think about their
motivations for entering the market.
We badly need an effective educational regulator in India like SEBI, the RBI or
TRAI, which regulate the capital markets, the banking sector and the telecom
sector respectively. Will the Independent Regulatory Authority for Higher
Education (IRAHE) see the light of day and more importantly have the teeth and
comptence to regulate well, if it does indeed come about?
Posted by Satya at 11:25 PM in Business of Education, Foreign Universities in India, Higher Education, Policies & Regulations | Permalink | Comments (1) | TrackBack (0)
May 06, 2006
Babson College, USA to help Pearl Global set up Pearl School for Business Studies in DelhiPearl Global, which set up the Pearl Academy of Fashion, has tied up with Babson
College, USA to set up a school of business and entrepreneurship in Delhi.
The press release (May 05, 2006) has more details.
Babson's provost explains the rationale behind Babson's interest in this partnership
with Pearl in a podcast and says there is no strategic intent at this time and that they
are only doing it "to help entrepreneurship for the love of the game," as part of
their attempt to help small schools with no reputation in starting up
entrepreneurship programmes.
Babson has similar relationships in Thailand with Bangkok University, which is
looking to start a school of entrepeneruship. Babson is also working with two
groups in Japan and exploring possibilities with an Australian university to locate a
school of entrepeneurship in Singapore and are also talking to a school in Equador
in South America. Babson is looking to develop a consulting relationship, extend
the brand and learn more about those countries and bring that back to the Babson
curriculum.
Since this is not a full-fledged investment in setting up the institute in India, this
presumably won't fall under the category of foreign universities in India.
Posted by Satya at 07:40 AM in Foreign Universities in India | Permalink | Comments (4) | TrackBack (0)
February 05, 2006
India may remove education from WTO offerIndian Express (Feb 04, 2006) reports on a move by the Ministry of HRD to reverse
India's decision on allowing foreign universities free entry into India by asking
the Ministry of Commerce to remove education from India's offer to WTO.
Reversing its earlier decision, India plans to withdraw from its list of offers to the
World Trade Organisation a provision that would have allowed foreign universities
free entry into the country. The Union Commerce Ministry is to take the revised
proposal to the Cabinet Committee on WTO to rescind the list approved of last
July. It was after the July approval that the Indian delegation informally extended a
commitment to the WTO whereby foreign educators would gain entry to India with
the sole condition being that their fees would be fixed by the government or its
agency, so that their entry did not lead to profiteering. However, no formal offer
had been made and the talks are still to be concluded , said sources.
The ministry (of HRD) said that there was no need to make a hurried offer when
others were dragging their feet. The only nations pushing for liberalisation in this
area were education exporters like the US, the UK, Australia and Canada—none of
which expect any outsiders to make incursions into their turf. The ministry (of
HRD) also suggested that the country adopt a "cautious approach" considering that
other countries in the Third World and among Muslim nations as well had told the
WTO that they would not open their education sector as doing so would affect
local political and cultural sensitivities.
The withdrawal of the offer would now mean a limited entry for the foreign
educational institutions, with the government enacting a bill to regulate their
entry, operations, as well as their fees.
Posted by Satya at 06:40 AM in Foreign Universities in India, Trade in Education | Permalink | Comments (1) | TrackBack (0)
September 26, 2005
CNR Rao Committee submits its report on entry of foreign universities into IndiaThe CNR Rao Committee set up to advise the Government on the entry of foreign
universities into India submitted its report a couple of months ago. I have not been
able to find a copy of the report online as yet. But the papers have published the
main highlights of the report as well as some reactions.
Urmi Goswami writing in The Economic Times (July 27, 2005) says,
For foreign universities, the days of easy entry into India may soon be over. The
government is expected to be considering a proposal to set up a two-phase
approval system for foreign universities. It will require foreign universities to get
approval prior to setting up Indian operations.
In the first phase, foreign universities will be given a limited period trial, a sort of
probation period. On the basis of performance in the trial period, these universities
will be allowed to set up long-term operations. The proposed system will apply to
all modes of operation — franchisee agreements, twinning programmes, study
centres, programme collaborations, and offshore or branch campuses.
The proposal also calls for strong disincentives, such as forfeiture of substantial
security deposits. This has been suggested to ensure that foreign players and their
partners do not discontinue their operations after a few years, leaving students in
the lurch.
A short-term approval will be extended to those varsities that are accredited in their
country of origin. The institution will be expected to submit the latest audit report
of the accreditation agency. To avoid a licence permit raj-type scenario, it has been
suggested the system be made transparent and quick.
The recommendation has been put forth by the CNR Rao Committee, set up by the
ministry of HRD in January. It indicated that the government was moving towards
a regulatory regime that would permit foreign varsities to set up shop in India in
light of GATS. Following the committee’s recommendations, the ministry had
indicated that it would prepare a draft proposal before moving towards Central
legislation.
Other members of the CNR Rao committee included professors
HP Dixit, Vice Chancellor, Indira Gandhi Open University,
Bakul Dholakia, Director, IIM Ahmedabad,
Ashok Misra, Director IIT Bombay,
Moolchand Sharma, Director of National School of Law University,
Bhopal,
CP Chandrashekhar, Jawaharlal Nehru University and
Dr Atindra Sen, Registrar of the University of Delhi.
Nandini Iyer writing in The Hindustan Times (Aug 7, 2005) suggests that the
Government might accept the report in full and also lists some of the foreign
universities that have shown interest in setting up shop in India.
The CNR Rao committee on entry of foreign universities has several rules in mind
for any comers. No poaching faculty from Indian colleges. No sending profits
back home to parent institutions abroad. No franchising or offshore study
campuses.
The committee also suggests that preferably only foreign universities from
countries that offer Indian universities a business opportunity abroad should be
allowed in.
The report suggests that the government lets in FEPs only after creating "a suitable
regulatory and monitoring mechanism at the national level". The draft bill wants
FEPs registered as deemed universities under the University Grants Commission
(UGC), which reports to the Union HRD Ministry.
Government sources say it is likely that the recommendations of the Rao
Committee will be accepted in full. It is expected to provide a "substantial
security deposit against fly-by-night operators".
Approval to FEPs will be for a limited trial period, and will be extended depending
upon performance. The committee suggests that such institutions should not be
allowed to repatriate surpluses. It also wants the government to discourage
franchising and off shore study centers, and opt for only twinning programmes
with existing Indian universities.
In the past year, Yale, Stanford and Georgia Institute of Technology have evinced
interest in coming to India. That interest may wane now. Yale wanted partnerships
in select areas without grassroots involvement. Stanford was looking for a
greenfield campus and also willing to look at an off-shore campus. Georgia Tech
was looking for a green field campus.
Swaraj Thapa, writing in The Financial Express (Aug 24, 2005) reports that the Prime
Minister is likely to refer the report to a panel of ministers who will decide on
accepting the report.
A high-powered ministerial panel is on the cards to decide on the entry of foreign
universities into India in the light of stringent recommendations made by an expert
committee headed by noted scientist CNR Rao. According to government
sources, Prime Minister Manmohan Singh was likely to refer the matter to a
group of ministers once the proposal was placed before the Cabinet by the
HRD ministry. India has to open the education sector as part of its international
commitment on the General agreement on Trade in Services (GATS).
The sources said universities like Yale and Stanford have shown interest in
establishing greenfield campuses in India. The government’s task, however, has
been complicated with the Rao committee specifying tough norms for foreign
universities wanting to open shop here.
Among the recommendations made by the panel include disallowing a significant
part of the profits to be taken out of the country by foreign education providers as
well as proposing a substantial security deposit as a safety measure against fly by
night operators. The committee has also suggested that those universities offering
some form of joint ventures including business opportunities should be entertained.
The government is also against franchising and offshore study centres, a lesson
learnt from the controversy in Chattisgarh.
Nirvikar Singh, professor at the University of California, Santa Cruz writing in The
Financial Express (Sep 08 2005) expresses disappointment at the recommendations
of the CNR Rao Committee in its report.
There is no shortage of managerial talent in India—much of it is being exported.
The big constraint is human capital. Currently, government jobs in India (except
for the elite services and the armed forces) rarely provide opportunities for
developing productive human capital. Software and BPO have shown what can be
done by industry-led training.
However, there is a tremendous supply bottleneck in India’s higher education.
The government’s traditional response seems to be based on the assumption that
private sector incompetence or malfeasance mirrors its own. Thus, for example,
private and foreign investment in higher education, which would generate jobs by
both, expanding education and by raising the productivity of entrants to the
workforce, are government-constrained in ways that make no sense. In this
respect, the recent CNR Rao committee report on foreign entry in higher
education is a grave disappointment.
So, critics who note the shortcomings of economic reform on job generation
are half right. But the answer is not in backtracking or hand-wringing, but
more reform, in labour laws and in education. A complementary process is
needed for job growth in agriculture and rural India (see the comprehensive 2002
ILO study of K Sundaram and Suresh Tendulkar). But creating more organised
private sector jobs, good ones that are productive and human-capital enhancing, is
both imperative and feasible through intelligent reform.
Posted by Satya at 09:36 PM in Foreign Universities in India | Permalink | Comments (3) | TrackBack (1)
June 12, 2005
AICTE announces new regulations for foreign universities in IndiaAICTE has published a notification (dated May 16, 2005) on its web site annoucing
revised regulations for the entry and operation of foreign universities/institutions
imparting technical education in India. But the notification ends with a statement
saying "The Regulations shall be subject to suitable review in the light of the
recommendations of the C.N.R. Rao Committee set up by the Ministry of Human
Resource Development on this subject."
The C.N.R. Rao Committee which was set up by the Central Government in January
2005 was supposed submit its recommendations on the entry of foreign
univerisities in India by April 15, 2005. A report in The Hindu (June 06, 2005)
states that "the Centre was expecting by this month the report of a committee headed by noted
scientist C.N.R. Rao on the setting up of foreign universities in the country."
The AICTE web site provides a list of approved foreign institutions that can operate in
India and currently there are only two such institutions listed on the AICTE web
site.
Here's a summary of AICTE's notification on the procedures and conditions for the
entry of foreign universities in India.
Any application to AICTE by a Foreign University / Institution seeking to operate
in India either directly or through collaborative arrangement with an Indian
University / Institution must be accompanied by a No-Objection Certificate issued
by the concerned Embassy in India. The Missions of the concerned Countries shall
be required to certify genuineness of the educational institutions of their respective
countries willing to offer study programmes in India.
Only such institutions shall be eligible to enter into collaboration/
partnership/twinning arrangements etc. with Foreign Universities/Institutions as
are already in existence and are duly approved by the AICTE. De-novo
institutions shall not be eligible. No franchisee system shall be allowed under
these Regulations.
The fee to be charged and the intake in each course to be offered by a Foreign
University/ Institution leading to a degree or diploma shall be as prescribed by
the AICTE, giving due hearing to the concerned Foreign University/Institution.
Educational innovations including experimentation with different modes of
delivery by a Foreign University / Institution shall only be allowed provided such a
system is well established either in their parent Country or in India.
The Foreign Universities / Institutions already operating in India in various forms
shall have to seek fresh approval from AICTE within six months from the date of
issuance of this notification or before commencement of ensuing academic session,
whichever is earlier and shall be governed by the Regulations and Guidelines of
AICTE.
1. If a Foreign University / Institution fails to comply with any of the conditions
2. The AICTE shall also inform the concerned agencies including Ministry of
External Affairs, Ministry of Home Affairs, RBI of such decisions and advise these
agencies to take any or all of the following measures:
a. Refusal / withdrawal for grant of visa to employees/teachers of the said Foreign
University / Institution.
b. Stop repatriation of funds from India to home Country.
c. Informing the public about the withdrawal of the Registration of such Foreign
University /Institution and the consequences thereof .
Does 2. (b) above imply that foreign universities can repatriate funds out of India if
they are complying with all other norms specified by the AICTE? Would this
repatriation of funds be termed as repatriation of profits?
Annual Reports : The Foreign University / Institution shall submit an annual report
giving details of the number of students admitted, programmes conducted, total fee
collected, amount transferred to parent Country, investment made, number of
students awarded degree, diploma and any such information that AICTE may ask
for.
I hope this Annual Report will be published on the AICTE web site and made
available to the public at large. That will go a long way towards fostering
accountability and responsibility on the part of the foreign universities and
institutions. This same condition must be imposed on all Indian univerisites and
institutions as well, whether public or private.
This AICTE notification only covers foreign universities and institutions offering
technical and presumably management education in India. I have not found any
regulations or policy statements on the letting foreign universities and institutions
offering non-technical education including medicine, law, arts, sciences, social
sciences etc.
Posted by Satya at 11:47 PM in Foreign Universities in India | Permalink | Comments (97) | TrackBack (0)
GATS and Higher Education in India - an overviewRupa Chanda of IIM Bangalore has been studying the implications of GATS for
higher education in India. She made a comprehensive presentation on GATS, Higher
Education Services and India (ppt) at a Higher Education Summit, organized by
FICCI in New Delhi on December 2, 2004.. Here're some bits from her
presentation - her entire presentation is worth reading.
GATS defines services trade as occurring via four modes of supply all of which are
relevant to education
Mode 1: cross border delivery: delivery of education services via
internet (distance education, tele-education, education testing
services)
Mode 2: consumption abroad: movement of students from one
country to another for higher education (foreign students in US
universities)
Mode 3: commercial presence: establishment of local branch
campuses or subsidiaries by foreign universities in other countries,
course offerings by domestic private colleges leading to degrees at
foreign universities, twinning arrangements, franchising
Mode 4: movement of natural persons: temporary movement of
teachers, lecturers, and education personnel to provide education
services overseas
The main subsectors under the GATS in the area of education are
1. Primary education
2. Secondary education
3. Higher education
4. Post secondary technical and vocational, university degree or
equivalent
5. Adult education
6. Other education services
India has received requests (for opening up of services) from several countries
(Australia, Brazil, Japan, New Zealand, Norway, Singapore, USA) in education
services in the new round of service trade negotiations launched in January 2000
(GATS 2000 round), which mostly focus on higher education, adult education, and
other education services. USA also specified training services and educational
testing services and Brazil has also requested in primary and secondary education
services, while there were no requests from the European Community. All requests
to India are for full market access and national treatment commitments in modes 1,
2 and 3. India has not made any offer in education services in the GATS 2000
round due to sensitive public good nature.
It is understandable for the U.S. to want opening up of training and educational
testing services, but quite interesting to note that Brazil has requested opening
up of primary and secondary education services. I wonder what prompted
Brazil to do so.
Rupa Chanda provides a list of India's interests in import and export of educational
services.
India's import interests in education services
Mode 2: Indian students studying in foreign universities (US, UK,
Australia)
o Over 40,000 studying in US courses (This is more like 75,000
added per year)
o Several thousand in Europe
Mode 3: foreign institutions entering India through twinning and
franchise arrangements
o Indian students getting foreign degrees, doing professional
courses at local branch campuses of foreign institutions in
India
UK-based Wigan and Leigh College
Indian School of Business tieup with Kellogg, Wharton,
and London Business School
Western International University,Arizona
NIIT tieup with ITT Educational Services, USA
Tata Infotech tieup with Hertfordshire University, UK
Mode 1: Prospects for distance education and degrees from foreign
academic institutions
Mode 4: Foreign faculty and scholars teaching in India
India's export interests in education services
Mode 1: Prospects for tele-education in management and executive
training.
o Experience with distance learning, use of new technologies
(IGNOU)
o Education process outsourcing with remote tutoring from India
(along the lines of efforts by Career Launcher, Educomp Datamatics
etc.)
Mode 2: Students from developing countries studying in Indian
engineering and medical colleges.
o Around 5,500 students from neighbouring developing
countries (2001)
o Exchange programmes and twinning arrangements
Mode 3: Setting up of overseas campuses, franchising by Indian
institutions
o MAHE, BITS, Central Institute of English and Foreign
Languages
o Over 100 CBSE schools abroad, catering to diaspora
Mode 4: Indian teachers, lecturers teaching abroad in Middle East,
Africa, researchers/scholars on visiting arrangements abroad
o Some 10,000 secondary school teachers overseas
o Recruitment of Indian teachers in Maths, Science, English
Potential as a regional hub for exporting higher education services
Writing in The Financial Express (December 14, 2004), Rupa Chanda says
There’s a widespread perception that from January 1, 2005, India is obliged under
the WTO to open up its higher education sector to foreign providers and to end
public subsidies, with adverse consequences for the quality and affordability of
higher education.
But how genuine and well-founded are these concerns? What does GATS oblige
India to do in the education sector? What is the experience thus far with foreign
education providers in India? If the likely impact is negative, where is the source of
the problem?
First and foremost, GATS does not require India to do anything at present in
education services.
It’s worth noting that India did not schedule education services either in the
Uruguay Round or in its revised commitments under the ongoing Doha Round.
Hence, India has no multilateral obligation under the WTO to open up higher
education services to foreign participation. Whatever liberalisation has
occurred in this area, such as allowing 100% FDI on automatic route and
permitting foreign participation through twinning, collaboration, franchising, and
subsidiaries, has been autonomously driven. Of course, it’s likely that in future
GATS negotiations, India will come under increasing pressure from certain
countries to multilaterally bind the liberalisation undertaken thus far in this
sector. But it’s unlikely that India will acquiesce to such demands.
The issue then is largely a domestic one. The impact of opening up higher
education services is shaped not by the WTO but by domestic factors, including
the domestic regulatory framework and the state of the domestic education system
in terms of quantity, quality, costs, infrastructure and finances. In this context,
evidence suggests that some of the concerns about opening up education services
may not be so misplaced.
While there are reputed foreign educational institutions operating, there are
numerous less reputed, second or third tier ones as well who charge high fees for
programmes of dubious quality. Given India’s capacity constraints in higher
education, substandard foreign institutions are able to survive in India. But the
problem is not liberalisation per se, but the lack of a supportive domestic
regulatory framework, which can ensure that liberalisation is beneficial. This is not
to suggest that one should add more layers of regulation in higher education.
Already there’s a plethora of regulatory bodies duplicating each other’s functions.
What’s required is more effective registration and certification systems, which
prevent unapproved institutions from partnering, which protect and inform
consumers, enable good quality foreign institutions to enter the Indian market, and
which create a level playing field between domestic and foreign institutions so that
the former can compete effectively in a liberalised environment. Once such a
regulatory framework is in place, India needn’t fear scheduling education services
under GATS. It could even inscribe additional conditions on the nature of foreign
participation in higher education, something permitted under GATS commitment
structure.
She concludes by looking at the opportunity that opens up for India in higher
education as a result of the GATS.
Finally, a point often lost on critics is that India also has gone on the offensive in
education services. A growing number of Indian educational institutions are
beginning to export to other markets. So, globalisation of education services should
also be seen as an opportunity, and the GATS as a framework to exploit this
opportunity. In short, a pro-active rather than defensive approach is required to
benefit from the liberalisation of higher education services, both unilaterally and
multilaterally, on the import as well as export fronts.
Prof. Manoj Pant of JNU, writing in The Financial Express (May 28, 2005), provides
more background on the options open to India in formulating its strategy for
opening up of educational services under the GATS and echoes Rupa Chanda's
thoughts on the need to protect and inform consumers' (students) about the quality
of the various foreign service providers and enable them to verify their claims.
Having missed the March deadline for submissions under GATS, countries will
have to make their submissions now by the end of May. One area in which India,
too, will make submissions is educational services which includes higher
education. While it is still not clear (at the time of writing) what the India offer is
likely to be, it is important to understand how the post- WTO scenario
preparedness differs in the case of services compared with submissions under Gatt.
I will look at this issue specifically from the point of view of trade in educational
services.
The main contention is likely to be the opening up of higher education under
GATS. While India could offer only distance education and some professional
educational services under the positive list approach, it is important to understand
what the subsequent preparedness involves.
A perusal of newspapers may give the impression that higher education is already
open to foreign service providers. This is not true. However, the reality is even
more alarming. For, any provider of educational services who does not want
UGC/AICTE recognition is free to enter any educational service without any
regulation. What is more alarming is the lack of any forum where consumers
can verify the claims of the multitude of service providers who promise all
sorts of benefits to students. Many even offer unverifiable links to foreign
institutions. Hence, the first task of the government must be to set up a regulator in
the field of educational services. Only then can appropriate legislation be framed to
protect consumers.
The second issue in the case of services is regarding foreign service providers.
Unlike trade in commodities, the question of FDI in services is built into
specification of the mode of delivery of services. In the case of educational
services, the issue is whether, and with what restrictions, India would allow the
FDI mode of entry of foreign providers (Mode 3).
The primary problem today is the inability of the university system to provide
higher education to all who aspire for it. There is no political commitment of
public funds and the quality of education in some universities is below par, to
say the least. This is the slack that the unregulated private sector is taking up
today at considerable cost to students. Should private foreign funds be
allowed to compete in higher education? Should we allow this competition?
It is my own suspicion that, if higher education is opened up even in a limited way,
the principal opposition to FDI is likely to come from the private sector. Finally,
India’s submissions on educational service must also be seen in the context of
bargaining strategies at the WTO—to win some you might need to lose some. This
is particularly important in the context of known developing country positions on
Mode 4 (movement of natural persons and the GATS visa) and India’s own efforts
to keep markets open for its IT services.
One of the most aggressive demanders of opening up of trade in educational
services, the US, is also the one trying to firm up its domestic legislation to restrict
outsourcing of services by its domestic companies. While Indian negotiators have
probably taken most of these issues into consideration in finalising their
submissions on trade in services, one wonders if there is any move to undertake
changes in domestic legislation necessary to meet the challenges of a post-WTO
world. One hopes that the lessons of the Uruguay Round have finally been learnt.
As described in an earlier posts, the Government must mandate that every
educational institution operating in India, whether Indian or foriegn, public or
private, to
publish an annual report with details of the infrastructure available, the staff,
the fees charged, the number of students, the results of the examinations, the
amount of funds available to the institution and the sources of funding,
affiliation to any foreign bodies with details of those bodies etc.
be rated by independent rating agencies like CRISIL, ICRA or CARE and
publicly announce their rating
This will enable consumers (students) to be fully informed about the educational
institutions and help them make their choices.
P.S. G. Srinivasan, writing in The Hindu (May 30, 2005), reviews India's options
in the GATS negotiations in the run-up to revised submissions before the deadline
of May 31, 2005, and a Commerce Ministry press release dated May 30, 2005 states
India will be making its Revised Offers shortly in sectors which include those in
which commitments were made in the Uruguay Round or in which Initial Offers
were made in the ongoing Doha Round of WTO negotiations. The sectors thus
covered include business services, construction and related engineering services,
health related and social services, tourism and travel related services, maritime
services and transport services.
There is surprisingly no mention of education services. Presumably the deadline
for revised submissions on education services is still farther away.
Posted by Satya at 05:31 PM in Foreign Universities in India, Higher Education, Trade in Education | Permalink | Comments (36) | TrackBack (0)
May 07, 2005
Stanford University keen to set shop in IndiaThe Statesman (April 03, 2005) reports,
Stanford University, one of the most prestigious American universities, is
considering opening a campus in India. But the current rules, which allow private
universities with foreign ownership, never mind their pedigree — do not allow
Stanford to do so. Foreign money can be spent on a university but a university
abroad cannot open a branch here.
A top government official said Stanford University officials were in India recently
to consider the possibility of opening a campus here. There were a number of high-
level meetings and also a dinner for the president, Dr John L Hennessy, hosted by
MP Mr Jyotiraditya Scindia, a Stanford alumnus.
If Stanford did come here, it would not be another of the bucket-shop private
universities that charge a hefty amount for a so-called foreign degree, though from
India. Instead, the university, the official said, would be considering moving
certain courses out of Stanford to India if they were relevant here. For instance,
Indian or South Asian history could be taught here as also, a course on the
economics of developing countries. “It makes a lot of sense to teach these courses
here. Those who will study here will be those who will be admitted there (there
may be no direct admissions here) and sent here. India is one of the possibilities.
They are thinking of a campus in China or Singapore as well,” the official said.
Stanford already has a campus in England, near Oxford.
Posted by Satya at 11:56 PM in Foreign Universities in India | Permalink | Comments (2) | TrackBack (0)
April 14, 2005
How is China dealing with the entry of foreign universities into the country?World Education News & Reviews (July/August 2004) reports
The recent accession of China to the World Trade Organization and the
increasingly favorable official view taken of in-country activity by foreign
education institutions (new regulations came into force in September 2003),
suggest a genuine opening up of the market.
From the Chinese perspective, the major benefits of foreign involvement are
capacity, status, and innovation. China is rapidly becoming the most significant
source of students studying abroad (sending over 63,000 students to the United
States alone in 2002). However, like some other major source countries such as
Malaysia and Singapore, China may come to view foreign-sourced, in-country
provision as more cost-effective (in terms of reducing travel costs and stemming
brain drain).
The third and most recent piece of legislation on transnational provision was
released in March 2003 and offers clarification on the prior 1995 regulations. (Both
the 1995 and 2003 regulations are available in English on the Ministry of
Education website). Major features include the stipulation that
foreign institutions must partner with Chinese institutions;
partnerships must not seek profit as their objective;
no less than half the members of the governing body of the institution
must be Chinese citizens and the post of president or the equivalent
must be a Chinese citizen residing in China;
the basic language of instruction should be Chinese; and
tuition fees may not be raised without approval.
The sustained proscription of foreign education institutions making a profit in
China is in contrast to the 2002 law on domestic private higher education, which
permits a "reasonable return."
It would appear that no Chinese private higher education institution has yet won
approval to offer programs leading to foreign degrees, so the combination of a for-
profit domestic provider and a foreign provider has yet to materialize, at least at
degree level. Indeed, I am not aware of any foreign for-profit higher education
institution currently operating independently in China at the bachelor’s degree
level or above. Known examples of other foreign for-profit education activity
include IT education firms such as India’s NITT and brokers such as CIBT.
Canadian CIBT acts as a local partner for some U.S. for-profit institutions, such as
Western International University (owned by the Apollo Group) and ITT
Educational Services
The full text of the Regulations of the People's Republic of China on Chinese-Foreign
Cooperation in Running Schools (promulgated by the State Council in March 2003) is
available on the Chinese Ministry of Education web site. Apparently the State
Council also promulgated in June 2004 a set of Implementation Measures for the
Regulations on Chinese-Foreign Cooperation in Running Schools (2004), but I
have not been able to find these online as yet.
Posted by Satya at 11:49 AM in Foreign Universities in India | Permalink | Comments (4) | TrackBack (0)
Government sets up committee to recommend policy on entry of foreign universities into IndiaEducation Ministers of 25 States deliberated for two days (January 10-11, 2005) in
Bangalore and one of the issues discussed was the entry of foreign universities into
India.
According to a report in The Hindu (January 12, 2005)
In a clear indication of the Government moving towards permitting foreign
universities to set up their establishments in India, the Union Minister for Human
Resource Development, Mr Arjun Singh, on Tuesday announced the setting up of a
high level committee under the Chairmanship of the eminent scientist, Dr C. N. R.
Rao. The Committee consisting of six members, including Dr Rao, has been asked
to submit its recommendations by April 15. The decision comes in the wake of
India having to take a decision on General Agreement on Trade in Services
(GATS) sooner.
Apart from Dr Rao, the member committee will consist of Mr Bakul Dholakia,
Director, IIM Ahmedabad, Mr H. P. Dikshit, Vice-Chancellor, Indira Gandhi
National Open University, Mr C. P. Chandrasekhr of Jawaharlal, Nehru University,
Delhi, Mr Ashok Misra, Director of IIT, Mumbai and Mr Mulchand Sharma,
Director, National School of Law University, Bhopal.
The Government will await the committee's recommendation and discuss the draft
proposal before moving towards a Central legislation. Addressing a press meet
here at the end of the two-day Conference of State Ministers of Higher and
Technical Education, Mr Singh said that based on the consensus arrived at during
the conference, a draft Central legislation would be framed by Parliament to
regulate the admission procedures to the professional courses in the States. Though
he did not specify any time frame, Mr Singh however ruled out an Ordinance to
tackle the contentious issue during the next academic session in May.
"I would prefer not to go through the Ordinance route. Parliament has to be kept
informed about the issue," he said, adding that he hoped a draft Bill could be
prepared before the academic session after consultation with all the States.
However, on the setting up of private universities, no consensus was reached and
while some States welcome it, others felt "we have already gone overboard."
Later, the education ministers of BJP-ruled States told reporters that though they
welcomed the proposal to permit foreign universities, they had spelt out their
conditions for supporting it. Mr Ghanshyam Tiwari, Rajasthan, who briefed
reporters on behalf of the BJP-ruled States — Rajasthan, Madhya Pradesh, Gujarat
and Goa — said that the Government should allow foreign universities only on a
50:50 partnership with local institutions. Besides, the foreign investors should be
permitted to retain only 20 per cent of the profits, while the remaining portion
should be reinvested within the country. No repatriation of the capital should be
allowed. Mr Tiwari added that such universities should be bound by the Indian
regulatory bodies in education like the University Grants Commission and the All
India Council of Technical Education.
The CNR Rao committee should be announcing its recommendations tomorrow.
The CPI (M) which is one of the influential constituents of the United Progressive
Alliance, the current ruling coalition has expressed its views against privatisation of
education and the entry of foreign universities into India and argues for more
Government funding of education through budgetary support.
But the Government simply does not have the money to cope with the looming
funding crisis in higher education or achieving their target of annual spending of 6% of
GDP on education.
