Cover Story

Time to welcome foreign universities

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.

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-à-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.

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.