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New rules for higher education

In a consultation paper titled, Higher Education in India and GATS, the ministry has proposed a separate regulatory framework for private players ? both domestic and foreign.

india Updated: Sep 14, 2006 03:19 IST

The Union commerce ministry wants to change the ground rules in the higher education sector through a liberal “playing field” for the private sector, including foreign education providers (FEPs).

In a consultation paper titled, Higher Education in India and GATS, the ministry has proposed a separate regulatory framework for private players — both domestic and foreign.

Suggestions by the Human Resource Development ministry, the Planning Commission and higher educational institutions will help devise the policy on FEPs for onward transmission to WTO-GATS by the end of this year. India had opened its education sector in 2001, when 100 per cent FDI was allowed. However, tough entry regulations prevented top FEPs from opening campuses in India. By 2006, only 150 FEPs entered into joint ventures with Indian institutions and could attract just 8,000 students even as the number of Indians seeking education in the US, UK, Australia and New Zealand crossed 1.10 lakh annually.

To remove the existing hurdles, the paper has solicited suggestions from the stakeholders on its 16-point charter. It wants to know whether foreign education providers should be allowed or not. If yes, in what manner — phased or single shot? What should be the areas for FEPs’ entry and what regulatory role should the University Grants Commission (UGC) and the All India Council for Technical Education (AICTE) play? And whether flexibility be accorded in setting fee structures, admissions and hiring of teachers to FEPs? The ministry also wants to know the problems Indian institutions are facing in opening campuses abroad.

Suggesting a paradigm shift from fully government-funded or totally unaided higher education institutions, the paper calls for a combination of public and private participation. The ministry’s logic for encouraging the private sector is that “public spending on higher education should be discouraged since private benefits outweigh social benefits. Subsidising higher education benefits the rich more than the poor.” 

To make the new model financially viable the ministry has suggested a cost recovery regime, at the core of which is a suitable tuition fee structure. “This will reduce the financial constraints faced by higher education institutions,” the ministry said. The paper also advises aided institutes to generate their own resources so that students can avail of quality higher education with easy bank loans on flexible terms.