An eve-of-election statement of intent taken through the ordinance route by the Union HRD ministry inviting globally top-ranked foreign universities to establish captive campuses in India, has drawn lukewarm response from foreign higher education institutions wary of entering India’s over-regulated higher education system. Dilip Thakore reports

Despite alarming new millennium reports about the poor quality of graduates being churned out by India’s 33,000 colleges and 659 universities — a NASSCOM-McKinsey World Institute study of 2005 reported that 75 percent of engineering college graduates and 85 percent of arts, science and commerce graduates of India’s institutes of higher education are not fit for employment in multinational companies — it’s taken the Congress-led United Progressive Alliance which was unexpectedly voted to office in New Delhi in 2004 and again in 2009, almost a decade to address this problem.

That’s because during this 10-party coalition’s first term in office, the vital human resource development (HRD) portfolio was allocated to master political strategist and aspirant prime minister the late, unlamented Arjun Singh whose sole contribution to education development was to impose an additional 27 percent  (additional to 22.5 percent for scheduled castes and tribes) affirmative action (reserved quota) upon 42 Central government universities including the IIMs and IITs, for OBCs (other backward classes/tribes). The consensus of academic opinion is that Singh’s initiative which was unanimously endorsed by Parliament, diluted standards of education in the country’s top-ranked institutions of higher education.

In 2009 when the UPA alliance was returned to power in New Delhi, the unpopular, octogenarian Arjun Singh was pushed out of the Union cabinet and replaced by Kapil Sibal, a Harvard Law School-educated, top-bracket Supreme Court counsel included within the tight circle of legal eagles who reportedly earn a mind-boggling Rs.50 crore per year. First off the blocks in the UPA-II government, the aggressive new HRD minister undertook a slew of initiatives to revamp primary education (Right to Free and Compulsory Educ-ation (aka RTE) Bill) guaranteeing all children in the age group 6-14 free and compulsory elementary education, and the Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010, to augment capacity and raise standards in higher education.

But despite Sibal’s pre-eminent status as a top-ranked Supreme Court counsel, both Bills were so hastily and poorly drafted that they were severely criticised by all including Congress members of the parliamentary standing committee of the HRD ministry. And although the RTE Bill was passed by Parliament and became law on April 1, 2010, the FEI Bill was returned to the ministry for redrafting. Meanwhile in 2012, Sibal whose appointment as HRD minister had been widely welcomed in 2009, was transferred to the scams-tainted Union ministry of communications and information technology, leaving the HRD ministry in a right royal mess with several half-baked, ineffective legislative and administrative initiatives.

Sibal’s successor in Shastri Bhavan, Delhi which houses the Union HRD ministry is the low-profile Dr. Pallam Raju, an engineering alum of Andhra University and an MBA from Temple University, Philadelphia, who has reportedly been an MP from Andhra Pradesh since 1984. Having inherited a ministry in a mess, Raju — supported by a “dream team” of ministers comprising the suave and articulate Shashi Tharoor former under-secretary general of the United Nations and author of several tomes (The Great Indian Novel, Pax Indica, The Five Dollar Smile), and Jitendra Prasada, a scion of one of the many political dynasties which make up the grand Congress coalition — has been busy trying to clean up while dodging the media and EducationWorld in particular.

Nevertheless informed monitors of the national education scene concede that quietly and methodically, the dream team is doing a good job of cleaning up Sibal’s mess, particularly in higher education where they have encouraged collaboration between foreign, especially American universities by facilitating the introduction of MOOCs (massive open online courses) initiated by several top-tier American universities including MIT, Boston, and Harvard. Another initiative of great pith and moment enabled by Raju and his dream team has been to resurrect the languishing Foreign Educational Institutions Regulation Bill, 2010 and enact it by way of a Central government ordinance issued under the University Grants Commission (UGC) Act, 1956.

According to an HRD ministry press note issued through the Press Information Bureau on September 10, the ministry is “in the process of finalising the UGC (Establishment and Operation of Campuses of Foreign Educational Institutions) Rules under which foreign universities can set up campus (sic) in India and issue foreign degrees”. Yet inevitably as is the norm in any government initiative, even the press note contains fine print, presumably to assuage if not choke, the protests of vested interests.  For a start, reiterating the Indian establishment’s — Supreme Court included — commitment to the fictional notion that education is not a commercial activity, the press note mandates that the campuses run by foreign educational institutions (FEIs) in India must be owned by not-for-profit, charitable companies registered under s. 25 of the Companies Act, 1956 (now in the final stages of recast), which plough all profits into promoting their objects and don’t pay dividends.

Secondly, the press note mandates that interested FEIs need to be ranked among the world’s Top 400 by the London-based international rating agency Quacquarelli Symonds (QS), Times Higher Education (THE) magazine or in the Academic Ranking of World Universities (ARWU) of the Shanghai Jiao Tong University, all of whom publish annual league tables rating and ranking universities around the world — a rare official admission of the importance of academic league tables. Unsurprisingly, the press release contains several other conditions and caveats relating to the quality of study programmes offered in FEI campuses in India, corpus quantum and stiff penalties for “FEPs (foreign education providers) who contravene any provision of these Rules or UGC Act” (see box).

To some knowledgeable monitors of the country’s sliding higher education system, this initiative of the Congress-led UPA-II government, taken at the fag end of its term in office, smells suspiciously like an election gimmick of the beleaguered Congress party fighting a desperate rearguard battle through enactment of  populist legislation — Food Security Act, Land Acquisition Bill — to appease an electorate alienated by unremitting inflation and a plethora of corruption scandals which have dented the grand old party’s image.

“According to the press note, the HRD ministry has sought the endorsement of the Department of Industrial Policy and Promotion and Department of Economic Affairs. Under the proposed Rules, FEIs can set up campuses in India only after they have been notified as FEPs by UGC. I believe this entire process will take a long time, although this announcement now makes sense from the election point of view,” says Dr. Arun Nigavekar former chairman UGC (2000-2005) and currently senior advisor and trustee at the Science & Technology Park of Pune University.

Another indicator of the lack of seriousness about the initiative being actioned in the near future, is that Prof. Ved Prakash, the Delhi-based chairman of UGC — the implementing agency of this proposal — refused to comment despite repeated appeals and reminders made to him.

However whatever the motivation and gestation period of this overdue initiative, it’s certain to be warmly welcomed by the aspirational middle class and corporate India which highly value education dispensed by foreign universities. The acute domestic shortage of colleges and universities dispensing globally benchmarked education — cut-off percentages in the handful of top-ranked colleges affiliated with Delhi University, the IITs, NITs and IIMs average 98 percent plus — and the sliding value of the rupee (which has made foreign education prohibitively expensive) have rendered quality tertiary education accessible to a minuscule percentage of the country’s middle class, estimated at a massive 250-300 million.

Indeed, even if Indian academics long accustomed to calling the shots in a seller’s market to whom the whiff of competition is anathema, and Left ideologues paranoid about foreign universities brainwashing Indian students, complain loudly as usual, the official invitation to FEIs to set up campuses in India — especially if top American and British universities pluck up the courage to respond —  will be widely welcomed as manna from heaven by the middle class yearning for real as opposed to ritual, substandard, liberal arts, technical and professional higher education dispensed by the vast majority of India’s 33,000 colleges and 659 universities. In this connection it is pertinent to note that none of India’s best universities make it into the Top 200 ranks of the QS, THE and Shanghai Jiao Tong league tables. Of course, study programmes offered by FEIs in captive campuses will be expensive by rock-bottom Indian standards, but still substantially cheaper than the same programmes offered abroad, given lower costs of living in India.

“Quite obviously if reputed FEIs set up campuses here it will benefit Indian higher education. Students will be spared the considerable expense of having to travel and live abroad for availing the education and certification of foreign universities. The HRD ministry’s terms and conditions, particularly its demand that foreign universities incorporated here maintain a corpus of Rs.25 crore — an easily affordable sum in foreign currencies — are quite normative and can hardly be termed onerous. Moreover, under s. 25 of the Companies Act there is considerable room for government and FEIs to vary the terms and conditions of entry on a case to case basis. On the whole, this is a welcome initiative which will provide healthy competition to India’s best institutions of higher education, and expand the range of  study programmes available to Indian students while saving the country a substantial amount of foreign exchange,” says Dr. R. Natarajan, former director of IIT-Madras and former chairman (2001-2004) of the Delhi-based All India Council for Technical Education (AICTE) which licences and accredits all post higher secondary institutions of professional including engineering, technology, hotel management, and pharmacy education countrywide. Currently Natarajan is IT education advisor to the Karnataka state government.

Unfortunately, foreign education institutions — especially top-ranked FEIs — are wary about establishing their own, self-administered campuses in India where higher education institutions are heavily regulated by the Central and state governments and  respect for their autonomy is practiced more in the breach than observance. Moreover it’s well known that all institutions of the Indian establishment, including the Supreme Court of India and the great Indian middle class (which yearns for excellent higher education without having to pay for it) are dead-set against “commercialisation of education” — confirmed as anti-constitutional by the apex court in several learned and lengthy judgements.

Consequently self-respecting FEIs and renowned universities — although they are well aware of the huge pent-up demand in India for quality higher education (India’s 33,000 colleges and 659 universities can accommodate only 13 percent of youth in the age group 18-24 as against 83 percent in the US, 82 percent in South Korea and 21 percent in China) — are hesitant about investing time, money and reputation in this country, where because of illogical injunctions against commercialisation,  financial corruption (inconceivable even if not intolerable to Western universities), is rife. “Corruption in higher education (is) undermining the foundations of society. It has become so pervasive, making it difficult to assess the root causes,” affirms Dr. M. Anandakrishnan, former vice chancellor of Anna University and currently chairman of the board of governors of IIT-Kanpur, in a forthright essay in the New Indian Express (September 15).

Such misgivings are unsurprising given that globally respected universities such as Harvard, Yale, Cambridge and Oxford have developed their academic systems and reputations over centuries. And therefore contrary to what rustic politicians and venal bureaucrats believe, they are unlikely to risk their immaculate reputations by venturing into the muddy waters of Indian higher education. Instead they tend to prefer academic alliances with indigenous private (aka deemed) universities whose promoters and officials know their way around the myriad rules and regulations written into high-sounding legislation to extort rents and bribes from education providers, domestic and foreign.

Quite a few Indian deemed universities have ‘twinning’ arrangements under which the first two years of a degree programme are delivered in India, and the remaining one or two years are completed abroad at the foreign partner university with students awarded degrees and certification of the latter. For instance, under the ICAS (International Centre for Applied Sciences) programme of Manipal University (MU), students study the first two years in the engineering faculty of MU (Manipal campus), and the next two years in any one of 74 universities in six countries with which MU has signed twinning agreements. MU has also established its own professional education campuses in Malaysia, Dubai and Antigua, West Indies. Likewise, the Delhi/Noida-based Amity University has signed twinning agreements with 13 FEIs and established its own eight campuses abroad.

But although partnerships with local education providers offer FEIs the advantage of cover and safety, given the omnipresent danger of brand dilution and the possibility of host partners embarrassing reputable OECD universities, some have nonetheless opted to establish captive campuses abroad. Australia’s premier Monash University has established a campus in Malaysia and Nottingham University, UK in Ningbo, China and Semenyih, Malaysia to emerge as Britain’s premier multinational university. Several FEIs including the French B-school ESSEC and Knowledge Universe have set up independent campuses in Singapore after concluding private treaties with the government of the island republic. Transparent and liberal entry conditions for FEIs have transformed Singapore into a globally respected hub of higher education with several Singapore-based universities ranked among the QS and THE Top 200.

However, top-ranked American universities are more wary about venturing overseas, particularly after Yale felt obliged to shut down its campus established in China in July, due to interference of communist party officials with the academic freedom and autonomy of its Chinese outpost.

Fear of confronting the greedy hand of the Indian educracy, which if things go wrong could result in legal troubles for FEIs back home and in the host country, is compounded by the notorious reputation that India’s Central and state governments have acquired among foreign investors for credibility and trustworthiness. Too often even after being given the green signal by the Central government, foreign investors including the London-based Vedanta Resources and Pohang Steel Works, South Korea have witnessed their projects becoming entangled in red tape for over a decade. Confronted with endless debate and a plethora of conditions and caveats relating to FDI (foreign direct investment) in retail, the globally famous retail chain Walmart has shelved its India entry plans.

Recently the UK-based telecom company Vodafone was levied income tax in India for an offshore transaction. Although this levy was successfully challenged in the Supreme Court, Parliament passed legislation to overturn the apex court’s verdict. Unsurprisingly, the faith of foreign investors in India has been shaken. Against this backdrop, it’s foolish to believe that FEIs which would be required to invest Rs.200-300 crore in owned satellite campuses will stampede into India.

“All government initiatives to allow foreign universities to set up campuses in India should be welcomed. They will benefit Indian students by enabling them to access high quality education at reasonable prices. However the terms, conditions and concessions applicable to them should also be made available to Indian universities,” says Dr. Ranjan Pai, managing director and chief executive of the Bangalore-based Manipal Global Education Pvt. Ltd, India’s premier education multinational which has established and manages professional universities in Malaysia, Singapore, Dubai and the West Indies, and whose recent proposal to set up a campus in China was nixed by the Union government on grounds of “national security”.

According to Pai, the suspicious, if not hostile, mindset of government and the educracy is likely to undermine the HRD ministry’s belated initiative to raise standards and augment capacity in higher education. “Full details of terms and conditions under which FEIs will be permitted to set up campuses in India are not yet available. But if FEI campuses have to function under the rules and regulations which govern Indian universities, I doubt if any of them will be interested in the proposition. FEIs establishing campuses in India need to be welcomed and given the freedom to operate. A single window scheme for clearance of licences, applications and paperwork should be introduced so they aren’t tangled in red tape. In Malaysia, Singapore, Dubai and the US where we have set up campuses and operations, governments are more bothered about quality of education rather than education institutions being for-profit or not-for-profit. Honestly I don’t believe any top-ranked university will set up a campus in India until we clean up the regulatory regime. It’s extremely doubtful if top-grade universities will agree to abide by the rules and regulations of UGC, AICTE etc in their current form,” says Pai.

Ranjan Pai’s gloomy prognosis is confirmed by Dr. Jeremy Williams, director of the Asia Pacific Management Centre of Griffith University and former chief academic officer of the Singapore-based Knowledge Universe, the world’s largest K-12 education corporation. Speaking to EducationWorld in his personal capacity, and not on behalf of Griffith University, Williams who has 15 years experience of working in India, believes the latest HRD ministry initiative to permit FEIs to establish campuses in India is a case of “too little, too late”.

“Frankly speaking, the HRD ministry’s press note is unlikely to send a vice chancellor’s pulse racing with excitement. Institutional investors have been waiting for something to happen for very long and meanwhile, the Indian education market has lost some of its lustre. In addition there is a lot of negative publicity coming out of India right now about foreign investors — Walmart, Warren Buffett among others — pulling up stumps because of the unworkable government bureaucracy. So business confidence in India as a destination for foreign investment is waning. Another adverse development is that government finances in the West are not good and with public funding of universities likely to fall, investing large sums in bricks-and-mortar campuses in India is unlikely. The more likely outcome is the export of our ‘software’ — the intellectual property that is acquired while running a university – and collaborations which will be online. Partnering with existing education providers in India is far less risky,” says Williams.

Williams’ pessimism about FEIs rushing into India to set up capital intensive campuses is borne by initial reactions to the HRD ministry’s press note. According to Rica Bhattacharyya writing in the Economic Times (September 13), spokespersons of more than half-a-dozen premier Western FEIs  including Harvard Business School, Stanford Graduate School of Business, MIT’s Sloan School of Management, and Cambridge and Duke universities ruled out the possibility of establishing branch campuses in India. Even Nottingham University, UK, the most adventurous of foreign varsities which has set up owned campuses in China and Malaysia, failed to respond to several emails and telephone calls of EducationWorld, indicative of lack of interest.

One of the few American universities likely to respond favourably to this overdue HRD ministry initiative is Virginia Tech which has already established a campus in MARG Swarnabhoomi, a new education cluster city shaping up 85 km from Chennai. Virginia Tech has signed an agreement with the Swarnabhoomi Academy of Institutions Trust to set up a campus on a 30 acre-plot “to foster graduate education as well as scientific and technological engagement through a model of collaborative research, education and outreach”. Virginia Tech is likely to expand operations to provide undergraduate programmes as well. Unfortunately several attempts to elicit confirmation from the MARG Swarnabhoomi office proved infructuous.

The conspicuous lack of enthusiasm exhibited by FEIs for the Union HRD ministry’s belated invitation to them to establish campuses in India where  demand for their contemporary syllabuses, curriculums, pedagogies and certification is huge, has much to do with the grudging and suspicious mindset of the Central and state governments towards foreign — and indeed all private — investment in the Indian economy. Poorly educated in post-independence India’s slapdash, substandard higher education institutions, and their logical faculties disoriented by socialist rhetoric poured out by the self-serving control-and-command political class, the Indian establishment and public is suspicious and unmindful of the massive knowledge dissemination and employment generation potential of foreign direct investment. Steeped in the naïve belief that education provision must necessarily be a charitable or philanthropic activity, the Indian establishment including the higher judiciary is depriving the world’s largest youth population of quality education, creating a growing underclass of unemployable, restless and combustible young adults.

This underlying hostility of the government bureaucracy to foreign investment in tertiary education is discernible in the phrasing of the HRD ministry’s September 10 press note. The tone is warning rather than inviting.

Unless this attitude of the establishment changes in subsequent communications and legislation of government — and that won’t happen until India’s politicians, bureaucrats and academics begin to genuinely appreciate that India’s inadequate higher education system desperately needs additional capacity, and contemporary curriculums and pedagogies — its half-hearted invitations to FEIs to share their knowledge and nation-building expertise will remain unanswered, and its grudging red carpet untrodden.