The CNR Rao Committee set up to advise the Government on the entry of foreign universities into India submitted its report a couple of months ago. I have not been able to find a copy of the report online as yet. But the papers have published the main highlights of the report as well as some reactions.
Urmi Goswami writing in The Economic Times (July 27, 2005) says,
For foreign universities, the days of easy entry into India may soon be over. The government is expected to be considering a proposal to set up a two-phase approval system for foreign universities. It will require foreign universities to get approval prior to setting up Indian operations.In the first phase, foreign universities will be given a limited period trial, a sort of probation period. On the basis of performance in the trial period, these universities will be allowed to set up long-term operations. The proposed system will apply to all modes of operation — franchisee agreements, twinning programmes, study centres, programme collaborations, and offshore or branch campuses.
The proposal also calls for strong disincentives, such as forfeiture of substantial security deposits. This has been suggested to ensure that foreign players and their partners do not discontinue their operations after a few years, leaving students in the lurch.
A short-term approval will be extended to those varsities that are accredited in their country of origin. The institution will be expected to submit the latest audit report of the accreditation agency. To avoid a licence permit raj-type scenario, it has been suggested the system be made transparent and quick.
The recommendation has been put forth by the CNR Rao Committee, set up by the ministry of HRD in January. It indicated that the government was moving towards a regulatory regime that would permit foreign varsities to set up shop in India in light of GATS. Following the committee’s recommendations, the ministry had indicated that it would prepare a draft proposal before moving towards Central legislation.
Other members of the CNR Rao committee included professors
- HP Dixit, Vice Chancellor, Indira Gandhi Open University,
- Bakul Dholakia, Director, IIM Ahmedabad,
- Ashok Misra, Director IIT Bombay,
- Moolchand Sharma, Director of National School of Law University, Bhopal,
- CP Chandrashekhar, Jawaharlal Nehru University and
- Dr Atindra Sen, Registrar of the University of Delhi.
Nandini Iyer writing in The Hindustan Times (Aug 7, 2005) suggests that the Government might accept the report in full and also lists some of the foreign universities that have shown interest in setting up shop in India.
The CNR Rao committee on entry of foreign universities has several rules in mind for any comers. No poaching faculty from Indian colleges. No sending profits back home to parent institutions abroad. No franchising or offshore study campuses.The committee also suggests that preferably only foreign universities from countries that offer Indian universities a business opportunity abroad should be allowed in.
The report suggests that the government lets in FEPs only after creating "a suitable regulatory and monitoring mechanism at the national level". The draft bill wants FEPs registered as deemed universities under the University Grants Commission (UGC), which reports to the Union HRD Ministry.
Government sources say it is likely that the recommendations of the Rao Committee will be accepted in full. It is expected to provide a "substantial security deposit against fly-by-night operators".
Approval to FEPs will be for a limited trial period, and will be extended depending upon performance. The committee suggests that such institutions should not be allowed to repatriate surpluses. It also wants the government to discourage franchising and off shore study centers, and opt for only twinning programmes with existing Indian universities.
In the past year, Yale, Stanford and Georgia Institute of Technology have evinced interest in coming to India. That interest may wane now. Yale wanted partnerships in select areas without grassroots involvement. Stanford was looking for a greenfield campus and also willing to look at an off-shore campus. Georgia Tech was looking for a green field campus.
Swaraj Thapa, writing in The Financial Express (Aug 24, 2005) reports that the Prime Minister is likely to refer the report to a panel of ministers who will decide on accepting the report.
A high-powered ministerial panel is on the cards to decide on the entry of foreign universities into India in the light of stringent recommendations made by an expert committee headed by noted scientist CNR Rao. According to government sources, Prime Minister Manmohan Singh was likely to refer the matter to a group of ministers once the proposal was placed before the Cabinet by the HRD ministry. India has to open the education sector as part of its international commitment on the General agreement on Trade in Services (GATS).The sources said universities like Yale and Stanford have shown interest in establishing greenfield campuses in India. The government’s task, however, has been complicated with the Rao committee specifying tough norms for foreign universities wanting to open shop here.
Among the recommendations made by the panel include disallowing a significant part of the profits to be taken out of the country by foreign education providers as well as proposing a substantial security deposit as a safety measure against fly by night operators. The committee has also suggested that those universities offering some form of joint ventures including business opportunities should be entertained. The government is also against franchising and offshore study centres, a lesson learnt from the controversy in Chattisgarh.
Nirvikar Singh, professor at the University of California, Santa Cruz writing in The Financial Express (Sep 08 2005) expresses disappointment at the recommendations of the CNR Rao Committee in its report.
There is no shortage of managerial talent in India—much of it is being exported. The big constraint is human capital. Currently, government jobs in India (except for the elite services and the armed forces) rarely provide opportunities for developing productive human capital. Software and BPO have shown what can be done by industry-led training.However, there is a tremendous supply bottleneck in India’s higher education. The government’s traditional response seems to be based on the assumption that private sector incompetence or malfeasance mirrors its own. Thus, for example, private and foreign investment in higher education, which would generate jobs by both, expanding education and by raising the productivity of entrants to the workforce, are government-constrained in ways that make no sense. In this respect, the recent CNR Rao committee report on foreign entry in higher education is a grave disappointment.
So, critics who note the shortcomings of economic reform on job generation are half right. But the answer is not in backtracking or hand-wringing, but more reform, in labour laws and in education. A complementary process is needed for job growth in agriculture and rural India (see the comprehensive 2002 ILO study of K Sundaram and Suresh Tendulkar). But creating more organised private sector jobs, good ones that are productive and human-capital enhancing, is both imperative and feasible through intelligent reform.
