India's million-dollar education
question By Siddharth
Srivastava
NEW DELHI - The question of
opening higher and elementary education to foreign
investment has divided the Indian government, with
the Commerce Ministry, which is in favor, at
loggerheads with the Human Resources Development
(HRD) Ministry.
For political reasons, the
government appears keen to offset the cost of
reserving places in higher education for "backward
caste" students (US$5.4 billion for infrastructure
upgrading) by creating
more options for general
candidates.
The figures presented by the
Commerce Ministry look good. The
global trade in higher
education stands at $30 billion, with Indian
students spending up to $4 billion annually on
overseas higher education.
Indians and
Chinese account for almost 20% of international
students, of whom just 6% are Indian, but that
ratio is likely to increase rapidly.
Worldwide, the United States, the United
Kingdom, Canada, New Zealand and Australia are the
primary providers of education, while India,
China, the Philippines and Indonesia are the main
consumers.
Commerce Minister Kamal Nath
and his officials have been arguing in favor of
allowing foreign universities - such as Harvard,
Yale, the Massachusetts Institute of Technology
(MIT), Stanford, and the London School of
Economics - to open campuses in India, thus
establishing inexpensive (because of competition
from Indian institutes) but excellent educational
institutions.
Most of these institutions
have already declared their interest in setting up
campuses in India. Denmark-based Egmont
Imaginations has already submitted a proposal to
the Indian government to set up 200 playschools.
India allowed 100% foreign direct
investment (FDI) in education in 2001, but tough
entry regulations and government control have
resulted in a poor response. Prime Minister
Manmohan Singh has been pushing for more relaxed
FDI regulations, with telecom, insurance and food
processing already opened up, and changes are
occurring in the retail sector as well.
In
a discussion paper, "Higher Education in India and
General Agreement on Trade and Services (GATS): An
Opportunity", the Commerce Ministry has proposed a
separate regulatory framework for private
education providers, both domestic and foreign.
The ministry is also setting the stage for
the ongoing services negotiations at the World
Trade Organization (WTO) to promote "Trade in
Education Services".
The paper, released
this week, says that while India is endowed with a
large and growing base of skilled professionals
(21.4 million graduate workers in 2000), their
quality leaves much to be desired. Only 25% of
Indian engineers, 15% of its finance and
accounting professionals and 10% of Indians with
general degrees are fit to work for multinational
companies.
The paper argues that enrolment
in India's higher-education system (11%) does not
compare favorably with other Asian countries - the
Philippines (31%), Thailand (19%), Malaysia (27%)
and China (13%). India also has one of the lowest
public expenditures on higher education per
student ($406), which is well below China
($2,728), Brazil ($3,986), Indonesia ($666) and
Malaysia ($625).
An infusion of
international capital and expertise could go a
long way in overhauling the country's education
system, just as Indian industry has become more
competitive with the arrival of foreign brands -
mobile telephones, clothing, computers, airlines
and banks.
HRD Minister Arjun Singh
opposes the concept on the grounds that the move
would be against the national interest, arguing
that few other countries are pushing for FDI in
education under the WTO agreements.
Others, however, argue that many foreign
universities in India have tie-ups that are not
recognized in their countries of origin and award
degrees of lower value than those awarded by
Indian institutions, hence there is a need for
regulation and monitoring. The left-wing parties
at the federal level oppose any liberalizing
economic moves.
Two conflicting opinions
on the subject reflect the nature of the conflict.
Commenting in the The Economic Times,
Communist Party of India (Marxist) leader Nilotpal
Basu wrote: "Entry of FDI as a solution tends to
treat the problem of higher education merely as a
financial question. It also completely throws the
existing system into complete confusion. It'll
undermine the exercise of regulatory control to
ensure that FDI-driven institutions remain true to
the national objectives that the present
higher-education system pursues.''
On the
other hand, S C Tripathi, former secretary to the
Indian government, said: "We need to remove the
stipulation of 'non-profit' nature from
institutions of higher, technical and vocational
education to invite more and more investment, both
domestic and foreign. We may invite 100% FDI in
these sectors under a suitable regulatory
framework that ensures quality and standards in
curriculum, teachers and assessment systems.''
Perhaps India needs to look to the US,
which continues to pump billions of dollars into
education despite already having one of the finest
systems in the world.
There is an attempt
being made to change with the times. US President
George W Bush is pushing for an international
exchange of students to promote cross-cultural
interaction. Many business schools in the US have
begun to bring groups of students to India.
Recently, a team from California-based
Stanford visited software giants Infosys and
Wipro. Kellogg School of Management, Northwestern
University, has a program called GIM (Global
Initiatives Management) and is looking at offshore
outsourcing as a subject of study. Schools such as
Wharton, Stern, MIT Sloan, and the Boston
University School of Management are also studying
India to develop an understanding of offshore
sourcing. And the US is not alone; Wipro
Technologies has played host to a team of students
from the Royal Institute of Stockholm and the
Stockholm School of Economics.
This year
at a summit on international education, US
Secretary of State Condoleezza Rice said her
country has "never been more eager" to welcome
foreign students to its shores and to send more
Americans to study abroad. "As the global center
of gravity shifts from West to East, and as
regions like the broader Middle East struggle to
embrace democratic reform, American students must
be at the forefront of our engagement with
countries like China and India, Iraq and
Afghanistan," she said.
In March, during
his visit to India, Bush spoke to Indian
management students in Hyderabad and said personal
experiences of life in the US will help them
overcome misperceptions. Bush said making sure US
colleges and universities are open and accessible
is "one of the most important things" on the US
agenda.
With the president himself doing
so much to sell US universities, it is no wonder
that the US economy earns more than $12 billion
from foreign students annually.
The
FDI-in-education debate in India is ongoing, and a
final decision by the cabinet will likely be three
to six months away. It could still go either way.
Siddharth Srivastava is a New
Delhi-based journalist.
(Copyright
2006 Asia Times Online Ltd. All rights reserved.
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