A degree of doubt

Students of Nalsar University of Law, Hyderabad, on their graduation day. Critics of the Bill say that the notion of equal rights to education has lost out to the trend of catering to the moneyed section of society.-MAHESH KUMAR A/AP

A Bill on the entry of foreign educational institutions faces stiff opposition as it promises little to stem the commercialisation of education.

A CENTRAL government move with the ostensible purpose of transforming higher education by encouraging more investment from foreign education providers has come under fire for giving them a free hand in the country under the guise of regulation. The stated objective of the Foreign Educational Institutions Bill, 2007, which was prepared by the Human Resource Development Ministry in March, is to regulate the entry and operation of foreign educational institutions (FEIs) in India in order to protect students, ensure quality education and stem the commercialisation of education. However, its actual contents appear to contradict its objectives: it encourages fee-hiking, offers loopholes where institutional partnerships are involved, leaves open the possibility of substandard education, and gives the government arbitrary powers to exempt certain foreign universities from any provision of the legislation. Furthermore, the financial basis upon which the FEIs are to operate remains unclear, and the cash-strapped government offers to subsidise some of them partially.

The Bill, which was scheduled for discussion in the Rajya Sabha in the first week of May, was withdrawn by the government following opposition from the Communist Party of India (Marxist) and objections that it had not been circulated to members for discussion. The party stated its outright rejection of a Bill that sanctioned foreign direct investment (FDI) in education, especially given that the United Progressive Alliance (UPA) government was yet to realise its commitment of allocating 6 per cent of the gross domestic product (GDP) to education.

Apprehensive that the Bill might yet again be introduced without any discussion in the forthcoming session, CPI(M) member of the Rajya Sabha Brinda Karat and former Delhi University Teachers Association president Vijender Sharma met Human Resource Development Minister Arjun Singh on July 12. They argued that if such legislation was required, it should bring private educational institutions under government control and regulate their fees, admission, curriculum, and so on.

The objectives of the Bill appear lofty. In its statement of objects and reasons, the Bill states that there is as yet no centralised policy, nor regulatory regime for foreign educational institutions in the country. The hands-off approach of the government has not helped in any meaningful assessment of their operations and, more importantly, it has given rise to chances of fraud and cheating of gullible students and its crass commercialisation. In the absence of an appropriate regulatory framework, or even a registering arrangement, no authentic statistics are available in respect of the number of foreign educational institutions in India.

No one disputes this argument. But there are contradictions between the stated objectives and the actual contents of the Bill. For instance, Section 3(1) of the Bill proposes conferring the status of deemed-to-be university on FEIs. Conferring such status, the Bills opponents argue, goes against the goal of controlling the commercialisation of education. They cite the examples of many private universities in the country, which hiked their rates after receiving deemed status. Not only should the deemed status of the existing universities be examined thoroughly but a regulatory framework to ensure that they do not misuse this status has to be brought into effect, said Vijender Sharma.

The All India Council for Technical Education (AICTE), the statutory body responsible for planning and developing technical education, issued a public notice earlier this year stating that many technical institutions, including deemed universities, were admitting students and collecting full fees long before the start of the academic session. In another public notice issued around the same time, the body listed 169 technical institutions conducting technical courses without AICTE approval and 104 other institutions collaborating with foreign universities without AICTE approval.

In the Bill, an FEI is defined as an institution established or incorporated outside the territory of India which has been offering educational services or proposes to offer courses leading to award of degrees or diplomas through conventional methods in the territory of India independently or in collaboration, partnership or in a twinning arrangement with any educational institution situated in India. The conventionally accepted definition of twinning is that a student studies partly in the host country and partly in the country of origin of the FEI. However, Section 2(o) defines the twinning programme as one whereby students can complete their study partly in India and partly in any other educational institution situated outside India. The implication of the definition of twinning in the Bill is that an FEI can send Indian students to any country and not necessarily to the country of its origin. This opens the door to dubious fly-by-night operators, rather than closing it on them.

The Bill exempts from its regulations any FEI that has a collaboration, partnership or a twinning arrangement with any institution of higher education, recognised in accordance with law. These could include State universities, Central universities and institutions of national importance. Why this exemption? According to Vijender Sharma there are a large number of private educational institutions involved in commercial activities that are still recognised by either the AICTE or the Medical Council of India (MCI), which regulates medical education in the country. Exemption would not stem the commercialisation of education but enable FEIs to collaborate with private domestic partners that are recognised and could be profit-making or, worse, unscrupulous. Instead, said Sharma, it was high time all unregulated private educational institutions were put under the scanner.

The Bill demands no minimum prescribed standards of quality for FEIs and will, therefore, fail to ensure that quality education is provided. Section 5 (1) of the Bill merely enjoins a foreign education provider to ensure that its programmes, faculty and curriculum in India are of comparable quality to those offered to students enrolled in its country of origin. Any FEI, therefore, however low its educational standards in its country of origin, would be able to operate in India. Furthermore, the government would have no right to intervene to bring substandard FEIs on a par with the educational, curricular and faculty standards prevalent in good Indian educational institutions.

Significantly, the Bill enables the government to exempt any foreign institution from its provisions altogether by acting on the advice of an advisory board. The board, which would comprise three national research professors and ex-officio members and chairpersons of bodies such as the University Grants Commission (UGC), the AICTE and the MCI, would have arbitrary and non-transparent decision-making capacities.

Finally, the financial basis upon which FEIs are to operate remains unclear. FEIs will be required to invest not less than 51 per cent of the total capital required to establish themselves and their profits must be reinvested in their growth and in development in India. However, critics argue that it is not clear how the surplus revenue generated by the remaining 49 per cent would be put to use and whether it would be repatriated to their country of origin.

There are also issues over the corpus fund of Rs.10 crore that the FEIs are supposed to set aside in the event that they close down or default. In the Private Universities Bill that was introduced in the Rajya Sabha 12 years ago, which has not yet seen the light of day, a similar corpus fund of Rs.10 crore was prescribed. Given that it is likely that FEI revenues far exceed those in the domestic private education sector today, let alone 12 years ago, the FEI corpus fund should be much higher, critics of the Bill argue.

Most shocking, the government is prepared to subsidise these institutions through development grants from the UGC. While the financial constraints of State universities can be understood, it seems illogical to extend the same benefit to FEIs, in whose case the profit motive lurks behind the projected philanthropy. It makes even less sense given that many of those who argue in favour of FEIs do so on the basis of the fact that the government is cash-strapped. Furthermore, the conditions for FEIs to receive grants is left unclear. The financial memorandum of the Bill states: There would be occasions where a Foreign Education Provider may have to be provided with a development grant. In such an event, the expenditure shall be met from the Consolidated Fund of India. What exactly these occasions may be is nowhere spelt out.

The apologists of FDI in education have long argued that as investment in public-funded institutions has stagnated and as financial constraints to open new colleges and universities remain, it is prudent to invite foreign players into the education sector. Yet another argument is that opening up the country to foreign universities would stem the tide of Indian students going abroad.

However, those who oppose FDI in education argue that FDI should not be a substitute for the active role of a welfare state with a proper social agenda. Just 7 per cent of Indians in the 18-24 age group enter higher education. The rest fall by the wayside, not because of any lack of institutions to hold them but largely because they do not complete secondary education.

The national dropout rate in secondary education is 61.92 per cent, with a higher drop out rate for girls. According to the draft report of the working group on secondary education (11th Five-Year Plan), secondary education suffered from lack of access, low participation (traced to a combination of socio-economic factors) and equity and quality issues.

Access to schools was, therefore, identified as the first and most important factor. There are, on average, only four secondary schools for every hundred square kilometres in the country. In several backward States, including Chattisgarh and Jharkhand, the figure is even smaller. For every hundred thousand people, there are only 14 schools in the country; the figures are even lower in the big and populous States. The expenditure on secondary education was 0.88 per cent of GDP, much less than the 1.5 per cent recommended by the Central Advisory Board on Education. It is clear that the priorities of the government should lie in increasing the number of schools and in improving the quality of secondary education before it supports FEIs.

The National Knowledge Commission, set up in October 2005, observed in its Report to the Nation that the entire regulatory structure governing higher education needed an overhaul; that it was essential to stimulate private investment in higher education as a means of extending educational opportunities; and that it was necessary to formulate appropriate policies for the entry of foreign institutions into India and the promotion of Indian institutions abroad while ensuring a level playing field for foreign and domestic institutions. In order to attain the gross enrolment ratio of 15 per cent of the population by 2015, the commission estimated that at least 1,500 universities were needed as against 350 at present. It also recommended an independent regulatory authority for higher education and suggested rationalising fees, arguing that on average, fees from students constituted less than 10 per cent of the total revenue in universities and that this should be at least 20 per cent. Ironically, much of the report was devoted to the poor state of higher education, but there was hardly any mention of the education shops that had cropped up in the private education sector or the need to regulate them. Instead, it stressed that a conscious effort should be made to attract foreign students to Indian universities to enrich the academic milieu, improve quality of education and bring in revenue.

The UPA government has not succeeded in making education a fundamental right as envisioned in Article 21A of the Constitution. The Bill on FEIs goes one step further away from this goal: the notion of equal rights to education has been lost in favour of catering to that small but moneyed section, here and abroad, who would in any case be the main beneficiaries of higher education.