Making India An Education Hub: What the Government Needs to Do

Hiuen Tsang, the 7th century Chinese traveller had responded to the fellow Buddhist scholars in Nalanda who beseeched him to stay long by saying, "Who would be so unfortunate as not to spread the message of enlightenment elsewhere in the world." India, over centuries had kept its doors open to imbibe and disseminate knowledge. There were times when this openness was subverted for narrower ends. Policies cannot be driven by fear or insecurity but a quest to seek the best, innovate and improve our economic conditions. Improving educational outcomes is rightly back in focus.

An important issue in regard to higher education is the access to foreign educational institutions. There is an increasing recognition that India must not lose out on its comparative factor advantages to become a Global hub for higher education.   

A recent study (UNESCO Institute for Statistics, May 2014) suggests that almost two lakh Indian students are currently studying abroad; Australia and the US being the preferred destinations. Surprisingly, Europe is not such a favoured destination any more. This is in sharp contrast to the meagre 28,000 foreign students studying in India. It is thus, no surprise Indian students spend roughly Rs. 45,000 crore on foreign education each year. This is thrice the amount allocated by the Union Budget (2014-15) for higher education.

The attraction of foreign universities for Indian students emanate from multiple factors. First and foremost, the brand value; a persistent belief that employment prospects and value added employment increases significantly with foreign degrees. Second, supply constraints inhibit the number of students who can secure admission to high-quality colleges in India. Given the competitive nature of the selection process, the cut-off points for securing admission in higher education institutes is now a daunting challenge. Last but not the least, is the poor ranking of Indian universities.

When we compare global rankings, Indian universities fair rather poorly. Out of the top 500, it has just 1 in the Academic Ranking of World Universities (ARWU), 6 in QS World Universities Rankings (QS-WUR) and 4 in the Times Higher Education World University Rankings (THE-WUR), and none featuring in the top 200. That Brazil, Russia and China, the other BRICS nations, have at least one of its universities in the list makes India's absence even starker.

So why have international high quality institutions not flourished in India? This is notwithstanding the student-teacher ratio in several IITs and IIMs being close to acceptable international norms. Is it the absence of autonomy? Or is it inflexibility in hiring and the emolument structure being not aligned with their domain knowledge and an unfavourable regulatory framework? Ironically, our comparative factor advantages with a young demography and supply side responses should make India a preferred as a global educational destination.

This mismatch between factor endowments and existing reality must spur policy makers for priority action. The UPA government had initiated The Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010. Its key features include regulating the entry and operation of such institutions. Foreign educational providers have to maintain a corpus fund of at least Rs 50 crore, and up to 75% of any income generated from this fund is to be utilized for developing its institution in India, the rest being ploughed back in the surplus. This bill failed to generate adequate consensus for it to be passed into law.

Multiple bills in the education sector introduced by the erstwhile UPA government met with the same fate. As a Member of the Parliamentary Standing Committee on Human Resource Development, the one persistent failure, I observed, was the absence of adequate dialogue with stakeholders, unacceptable Central bias, inadequate participation by domain experts and an excessive bureaucratization in the regulatory framework.

In respect of the Foreign Universities Bill, what are the key unresolved issues? Should policymakers consider a revised bill to facilitate entry of foreign universities? After all, it is argued that if Singapore has benefited from franchisee agreements with Wharton and INSEAD, what is the flip side by our providing a similar regulatory framework? The issues however are more complex.

First, even if foreign universities have an Indian presence, it would at best make a marginal dent in the outflow of Indian students seeking educational opportunities abroad. Students seek foreign universities both for quality but more importantly the brand value. The brand value of Ivy League institutions or the traditional ones of Oxford, Cambridge and London School of Economics is believed to dramatically improve employment prospects. It also gives students added pride. Can these brand values be replicated in India? The modest fee structure of these franchisee institutions would enable students from less affluent backgrounds to seek improved opportunities. There is no substitute however for creating a brand value for several Indian institutions which have received well-deserved global recognition. Encouraging our few globally recognized institutions to improve quality and benchmark higher brand value must receive active support and encouragement.

Second, what kind of regulatory structures could enable these foreign institutions to optimize outcomes? If the norms are to be differentiated than those governing Indian institutions, the nature of such preferred discriminatory arrangements would need to be transparently evolved.

Third, during the course of the hearings of the Parliamentary Standing Committee on HRD. I was surprised when the student unions expressed apprehensions about lack of high quality faculty. The danger of leading foreign institutions garnering our best faculty can be debilitating for existing institutions. While competition is generally healthy, the prevalence of unbridled market forces can have serious unintended consequences. Incentivising and enhancing the talent pool of higher faculty should, many believe, precede the opening of the Indian market to foreign institutions. There is also the broader issue of balancing the need to preserve our heritage, culture and educational ethos with pedagogy aligned to serve contemporary and evolving employment opportunities, both domestic and foreign.

The present stalemate needs decisive action. A three-step approach needs to be followed. A revised Foreign Universities Education Bill needs to be drafted. It must be subjected to intensive consultation with all stakeholders. Consultations need to be undertaken with foreign institutions since it should be our objective to attract the best among them while discouraging fly-by-night operators. The revised road map should be presented to Parliament for early enactment. This road-map must be articulated with imagination, innovation, out-of-the-box solutions, and in bi-partisan spirit.

India has the potential to become a vibrant educational hub. Repositioning India as a country of academic excellence must have a high priority with the Modi government.

(NK Singh is a member of the BJP, former MP (Rajya Sabha), has held key bureaucratic assignments and has been a member of the Planning Commission.)

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