By Rohit Sharma

After its first introduction in August 1995 and several years of debate, the Union Cabinet finally passed the bill that allows foreign universities to set up campuses in India and offer degrees independently. The Foreign Educational Institutions (Entry and Operation) Regulation Bill 2010 will permit foreign players to invest 51 per cent of the total capital expenditure needed to establish the institute in India. This means that, now, some of the world’s best institutes like Harvard, Oxford and Cambridge will be able to set up campuses in India and offer the same standards like their home campuses.

Although the government allowed 100 per cent foreign direct investment (FDI) in the education sector since 2000, the legal structure did not allow foreign universities to grant degrees in India until today. The Education Bill aims to control the entry, operation and maintenance of quality assurance and prevention of commercialization by foreign educational institutions.

According to Assocham, over US$13 billion is spent every year by about 450,000 Indian students on higher education abroad as they get rejected by domestic institutions. Every year, over 150,000 students go overseas for university education, which costs India a foreign exchange outflow of US$10 billion -- an amount sufficient to build more IIMs and IITs, it said. The Foreign Education Bill will put the brakes on Indian students racing to foreign countries for higher studies; also, encourage competition in the market for Indian institutes besides raising the number of seats for higher education. It will also save students from the fly-by-nights operators as only accredited universities will be allowed to set up campuses in India. The foreign universities will be granted a deemed university status under Section 3 of the University Grants Commission Act (UGC).

With such grand offerings, stringent conditions and acceptable enthusiasm of the Ministry of Education, it seems that certain points have been clearly ignored. The bill is silent on the issue of reservations for SC/ST and OBC which can cause hurdles for foreign universities; Indian universities grant 27 per cent reservation to the backward class. A student does not only opt for a foreign university on the basis of its credibility but also for a superior academic infrastructure, greater freedom of choice and motivational teaching. The surety of providing the same level of education in India is bleak. Also, the bill does not restrict students from going abroad. Thus, it will be difficult to calculate how much foreign exchange will be saved. Meanwhile, the courses will be chosen by the universities, but UGC will be keeping an eye on the content. The Students' Islamic Organisation of India is apprehensive of the invasion of Western culture, ethics and values along with the Western universities.

The principal opposition parties have raised serious objections to this new law. Slamming the Education Bill as “commercially driven”, parties like the BJP and the Left have raised concerns over the equivalence of degrees, fee structures and impartiality in terms of access to all students. The passing of the bill is being seen as a hasty decision, with the opposition demanding further discussions on it.

Indian universities like the IITs, IIM s and Jawahar Lal Nehru University have welcomed the move but have also hoped that the same provisions are also extended to Indian institutes for a better and healthy competition. Foreign universities have also raised the toast to the bill, but it is yet to be seen if they will take the bait immediately or wait for further developments

Indiabiznews, March 20, 2010