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Foreign investors out of quota loop

Foreign universities with big investment plans need not reserve seats for the deprived, reports Chetan Chauhan.

india Updated: Oct 18, 2006 02:52 IST

The Human Resources Development Ministry wants quota in foreign universities, but the Commerce Ministry thinks that will deter foreign direct investment in higher education. The way out? A Planning Commission proposal that says foreign universities with big investment plans need not reserve seats for weaker sections.

According to the proposal, the reservation clause in the HRD ministry's draft bill on ‘foreign education providers’ can be exempted for ‘A-grade foreign universities’, that is, educational institutes that intend to pump in big money into the education sector in India. "It is an incentive for top universities to invest in India," a senior government official said.

The proposal, which is silent on smaller foreign universities, was tabled at a group of ministers' meeting held last month in HRD minister Arjun Singh's office. During the presentation, Planning Commission vice-chairman Montek Singh Aluwalia proposed to exempt foreign universities from reservation and the strict regulation as proposed by the HRD ministry.

Officials say the proposal has the backing of Finance Minister P Chidambadam and Commerce Minister Kamal Nath, who believe higher education is the next big destination for foreign investment. However, the discussion remained inconclusive.

The aim of the proposal is to slow down the trend of Indian students going abroad to study in foreign universities. In the last academic year, India exported about 1.25 lakh students to foreign universities with the United States getting the maximum share of over 80,000 students.

Though India opened its higher education sector to 100 per cent FDI about five years ago, not many foreign institutes bothered to come to India, primarily because of tough government rules.

The commerce ministry says it has received proposals from Australia, Brazil, Japan, New Zealand, Norway, Singapore and the US to invest in the Indian education sector, but they want more transparency in the sector. The US says its institutes need a level playing field with India universities.

The HRD ministry has been opposed to the commerce ministry's liberal approach, saying these universities must be under watch just as Indian institutes are. This, it argued, was to prevent fly-by-night educational institutions.

The commerce ministry has tabled a proposal in the World Trade Organisation stressing on the need to allow foreign universities through an accreditation process.

But the HRD ministry stuck to its line and brought a draft bill before the Cabinet in July, which was referred to the group of ministers for further discussions. Though Singh was hopeful of tabling the bill in the monsoon session, it now appears that the bill may not come through even in the winter session.

First Published: Oct 18, 2006 02:45 IST