Foreign degrees, right here?

Updated on: Sunday, August 08, 2010

Dreaming of acquiring a foreign degree right here in India, and not spending thousands of dollars travelling overseas? You might have your way soon.

Kapil Sibal, Union Minister of Human Resource Development, has recently introduced the Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010, in Parliament in order to allow foreign universities to operate in the country. He said: “I do not expect Harvard and Stanford universities to set up shop here (but others will).” The fact remains that about 1,80,000 Indian students go abroad every year to study and spend billions of dollars, and this results in heavy foreign exchange outflow from the country. How to stem the outflow, and ensure that the populace is educated and skilled?

“Education has been a great equalizer in Europe,” said Sukhadeo Thorat, chairman, University Grants Commission, at a recent seminar in New Delhi. Perhaps, the Union HRD Minister is expecting to kill two birds with one stone — educate the populace and, prevent outflow of students and capital.

Only about seven per cent of all Indians enter the higher education sector. Currently, India has about 350 universities. The National Knowledge Commission, constituted in 2005, has recommended that about 1,500 universities “should be opened nationwide” so that India is able to attain a gross enrolment ratio (GER) of at least 15 per cent by 2015.

Crucially, where will the money come from? One of the steps envisaged by the government has been to open up the higher education sector to foreign varsities.

The Foreign Educational Institutions Bill is expected to open up the education sector further, and help the government achieve its target in terms of GER. There are, however, a few riders. One is that the foreign varsities are not expected to remit back to the host country the earnings that have been made in the education field here. The Bill says, “The foreign educational institutions have to maintain a corpus fund of a minimum of Rs. 50 crore. Maximum of 75 per cent of any income generated from the fund shall be utilized for developing its institution in India, and rest should be put back in the fund.” The Bill is very categorical on this issue. “This implies that they cannot repatriate any surplus,” says M.R. Madhavan of PRS Legislative Research, Centre for Policy Research, New Delhi. The foreign education institution that wishes to come into India is expected to have been in the field of providing education services for a minimum of 20 years.

Crucially, the foreign varsities cannot impose their own independent curriculum. The Bill says, “The programme of study offered by the foreign education provider has to conform to standards laid down by the statutory authority (such as the UGC, AICTE, BCI and MCI).” So, are we telling them to come in, or discouraging them? The signals are mixed. However, there is no cap on fees, or number of students.

Considering the requirement of skills in India, those universities that want to focus on offering specialised skills are likely to be the first ones to come in. The application by the foreign education institution that seeks to enter India has to be endorsed by the High Commission of that country in India. That is expected to filter out the fly-by-night operators. Still we need to be on our toes, considering in India “anything foreign”, has a certain brand value. India may have been the colony that got away from the British crown, but colonial mindsets have yet to change in many ways, even six decades after Independence.

The Indian domestic market and the country's appetite for education is huge, considering vast sections of the population have been denied their basic right to education for long. According to a new Assocham study, “Fifty five per cent of Indian middle-class households have started saving for higher education of their children” as it is no longer considered as an expense but an investment. This will work as a catalyst to push higher education market size grow over $ 30 billion in next five years, adds the report.

This shows that there is plenty to be earned in the Indian domestic market itself for the foreign varsity players. The current estimate of India's education market size is less than $25 billion of which higher education market size is considered close to $15 billion, according to the report.

This explains why even some home-grown healthcare companies are trying to get into the education sector. According to an Ernst & Young (2009) report, the Planning Commission has identified a resource gap of Rs 2.2 lakh crore to achieve its target of setting up additional varsities and colleges. This would mean that the funds from foreign varsities would be welcome, as it would help tide over the financial crunch.

We will have to just wait and see as to who is attracted to this “land of opportunities”, and whether despite the tight regulations, the foreign varsities find India lucrative enough to pitch their “educational tents”, here. The fact remains that the purchasing power in India is limited to 300 million people and skilling the rest of the populace through education remains a dire need.

The Indian government has certainly woken up to the problem, and looking at foreign shores to help out the domestic higher education sector is one way of solving the problem. The GER in higher education sector in developed economies is 40 per cent, and we need to catch up, if we wish to maintain a high growth curve. Perhaps, what the Indian government also needs to do is improve its PR skills to get the high-end foreign varsities that have a long-standing tradition in education to invest here. That will certainly benefit students who wish to acquire an educational qualification that has a global outlook, and are currently spending thousands of dollars and take the flight overseas to acquire that qualification.

Foreign degrees, right here?

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