QUALITY ENHANCEMENT IN HIGHER QUALITY ENHANCEMENT IN HIGHER EDUCATION – ROLE OF FDI AND EDUCATION – ROLE OF FDI AND FOREIGN INSTITUTIONS BILLFOREIGN INSTITUTIONS BILL

National Knowledge Commission-2007 National Knowledge Commission-2007 Recommendations Recommendations

1500 Universities and 50 National Universities

Gross Enrollment Ration of at least 15 %.

Allowing FDI in Education sector and Foreign Educational Institutions

Usage of Open Educational Resources

Improvement in quality and quantity in Education

Need for Foreign Institutions in India

150,000 Indian students studying abroad 80,000 in US 40,000 in Australia 19,000 in UK 11,000 in Canada, New Zealand and Singapore

$ 7 billion (Rs. 32,000 Crores)

More than 10-fold the amount in 2000-01

INVESTMENTS AND RETURNS OF AN EDUCATIONAL INSTITUTION

Returns of Higher Education Sector

Access, Equity and Quality

Reduce inequalities

Advanced knowledge and skills

Envisage social and economic development

Increases labor productivity

Higher long term economic growth

Growth Effects of FDIGrowth Effects of FDIStrong stimulus to income growth Essential element for sustainable developmentSupplements national savings by capital inflowsPromotes economic developmentLess volatile and easier to sustain at times of crisisIt is an investment, not consumptionIncreases productivity Offers access to internationally available technologies and management know-howMakes it easier to penetrate world markets

FDI and Quality Enhancement in Higher FDI and Quality Enhancement in Higher EducationEducation

Compensate the lack of funds

Stop the outflow of students and foreign exchange (1,60,000 students, 7 billion US$ (Rs. 32,200 Crores)

More opportunities, increased placements and enhanced quality

Local institutions face International competition

Need based curriculum

Internationally comparable and accepted degrees

New institutions, infrastructure and employment.

Foreign Institutions Regulatory Bill - 2010

Different levels of registration from UGC or AICTE or any alike regulatory body Only Deemed University Status Rs. 50 Crore corpus fund Should register as “Not for profit companies” and cannot take the profit back Profit generated from consultancy services, faculty development and other like activities can be taken back A time bound approval process Reservation Policy not applicable

Issues related to Foreign University Regulatory Issues related to Foreign University Regulatory Bill Bill

Regulatory clarity Level of governmental interference

Independent regulator

Compliance with mandatory requirements Campus infrastructure development Flexibility in fee fixation Taxation Closure of universities

Regulatory Bottlenecks

Over regulations of the State Rigid approval w.r.t. infrastructure & course structure Unrecognized institutions and severe distortions Corrupt and opaque regulatory process Distorted land market No market competitionJurisdiction rules High entry barriers Private investment not entirely driven by market Inadequate informational transparency

Subsidies to Marginalized sectionsSubsidies to Marginalized sections

1950 1980

Male to female students in higher education

8.3 : 1 1.5 : 1

General to SC/ST students 12:1 8:1

The private investments cannot adhere to the subsidy policies to marginalized sections of the society, resulting in decrease in quality. .

Institutional hurdles 5 % recovery of user costs Lack productivity and excellence Educationists have little control over pedagogical and evaluation decisions Poor infrastructure, intense competition for scarce resources and politicization Civil - service like promotion schemes enable mediocre academics to top positions Decreased academic mobility Academics resisting change and reform The credibility of institutions depends on selection mechanism