Saturday, November 9, 2013

Foreign Universities in India: Bypassing Parliament

by William Lawton, The Observatory:

FlagWhat are parliaments for? For passing laws and keeping executives in check.

Although the latter function is fundamental to parliamentary democracy, in the case of Indian higher education it has ensured that the legislative function happens very slowly or not at all.

Hence the infamous draft Foreign Educational Institutions (FEI) Bill introduced to parliament in 2010, where it has languished since. Its predecessor in 2007 met the same fate.

But who needs parliament for this? As the Observatory reported in July 2012, the Human Resource Development (HRD) Ministry had instructed the University Grants Commission (UGC, a policy-making and funding body) to investigate ways to allow ‘backdoor’ entry to foreign institutions without new legislation.

Although this aim was denied at the time by the Secretary of the UGC, on 10 September this year the HRD announced that its proposals to permit foreign universities to open campuses … as companies as provided under the Companies Act had the backing of the Department of Industrial Policy and Promotion and the Department of Economic Affairs.

These ‘rules’ issued by the central government were also vetted by the Ministry of Law & Justice but they have yet to ‘be notified’ (come into force).

When (if?) they come into effect, FEIs will be able to set up campuses to deliver foreign degrees in India once they are designated by the UGC as ‘foreign education providers’ (FEPs).

To apply for FEP status they must be not-for-profit accredited institutions in existence for at least 20 years. They must offer programmes or courses of quality ‘comparable’ to those offered at the home campus.

They must appear in the top 400 universities ‘as published by Times Higher Education, Quacquarelli Symonds (QS) or the Academic Ranking of World Universities (ARWU) by Shanghai Jiao Tong University’.

Presumably this means they must appear in any of them. They must also maintain a ‘corpus fund’ of at least Rs 25 crores, or $4m.

Degrees awarded by FEPs will be treated as foreign degrees and ‘subject to the equivalence accorded by the Association of Indian Universities (AIU) as per their system’.

Meanwhile, on 21 September the UGC published new ‘regulations’ in the Gazette of India in regard to a range of existing and proposed collaborations between Indian and foreign institutions. These are separate and come into force automatically.

Taken together, the new HRD rules and UGC regulations contain many of the important provisions found in the FEI Bill. The corpus fund requirement, for example, was in the Bill, though at double the rate: Rs 50 crores.

Even at the lesser amount, it continues to make India something of an outlier and contrasts unfavourably with Asian governments that compete to attract foreign universities and assume some financial risks with inducements of cash grants, land grants, loans and tax breaks.

The Bill specified that FEPs that contravene its provisions would be liable to a penalty between Rs 10-50 lakhs ($16-80,000) and forfeiture of the corpus fund. The HRD rules have increased the penalty to between 50 lakhs and 1 crore ($163,000) and forfeiture of the corpus.

The requirements for not-for-profit status, 20 years of operation, proper accreditation, and registration under Section 25 of the Companies Act 1956 are all from the FEI Bill.

‘Section 25’ companies are ‘required to apply profits, if any, or other income in promoting its objects’, which suggests that the money has to stay in India.

The UGC regulations make no mention of the 20-year requirement for non-campus collaborations but they share with the Bill a definition of FEIs that excludes institutions which propose to deliver qualifications in India in ‘distance mode’.

They also specify that all ‘franchise arrangements … shall not be allowed under these regulations’, that the restrictions apply to existing partnerships, and that compliance must be evident within six months.

The restriction in regard to franchising is motivated by longstanding concerns over quality, but surely the UGC recognises that not all franchising arrangements are dodgy. In regard to distance learning, the wording is less clear.

It may mean simply that distance-learning operations are not covered by the regulations and are therefore unaffected. Some such foreign providers have checked with local partners in India and this seems to be the case.

In any case, online and distance learning (ODL) is essential for India to plug some of the gap between supply and demand. Branch campuses will never meet more than the smallest fraction of the demand - at the top end, for those who can afford it.

India should be positively encouraging ODL in the context of the current explosion of online delivery and because Indians are big users of MOOCs (according to Nick Booker of IndoGenius in Delhi, the top turnouts for a series of Udacity ‘meet-ups’ around the world this year were in India).

It would be perverse to close down the future potential for MOOCs to provide formal qualifications when there is such a need and demand.

Although the HRD requirement regarding the top 400 rankings was not in the FEI Bill, it has appeared before. As noted in our earlier paper, the 2009 Yash Pal report to HRD first proposed a condition that foreign institutions should be in the world top 200.

This was subsequently downgraded to the top 500 in 2012, and then explicitly dropped as a condition for proposed partnerships in HRD rules published in December 2012. Now it is back.

The new UGC regulations, however, specify only that FEIs that collaborate with Indian partners must be ‘accredited with the highest grade in their homeland’.

If someone in Delhi realised that parliament can be bypassed, why didn’t the Indian government go the non-legislative route before this? Presumably it is because such a contested issue in India requires a level of legitimacy that only parliament can deliver.

But parliament has not delivered in this instance. Some in the civil service also felt that new legislation would impose rigidity, when what they need is the ability to tweak the provisions as they go along.

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