People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 25

June 21, 2009


FEI Bill Jeopardises Our Higher Education System

Vijender Sharma

KAPIL Sibal, the new minister for Human Resource Development, immediately after assuming office on May 29, 2009 declared that bringing in the pending Foreign Education Institutions (FEI) Bill would be his top priority. The prime minister's office  has been backing the bill. The Foreign Educational Institutions (regulation of entry and operation, maintenance of quality and prevention of commercialisation) Bill, 2007 was planned to be introduced in the parliament (Rajya Sabha), in the first week of May 2007. But due to the opposition of the CPI(M), it was withdrawn at the last moment.

Kapil Sibal, who was then (June 2007) minister for Science and Technology, had been pushing for this bill. After the bill was withdrawn, he had stated, "We are going to open up our educational sector to the foreign universities and it is going to be one of the largest FDI earners."

No wonder that the Wall Street Journal (USA) in its June 11, 2009 issue wrote that the "most recent effort by Indian politicians to ease restrictions on foreign colleges was stalled by Leftist parties, who said the poor would be left behind as the cost of education rises. But India's new coalition government, which took power last month, doesn't rely on the Leftists, improving the chances of Mr Sibal's effort to succeed." (Emphasis added) The Journal quoted Sibal saying, "I would hope that come 2010, universities around the world will be sprinting to come to India." He said he wants to open the market because India, despite its 1.1 billion-plus population, has an acute shortage of educated workers that threatens to inhibit economic expansion.

It seems that Sibal did not know then, and does not know even now that Foreign Direct Investment (FDI) in education, including higher education, is allowed in India under the automatic route, without any sectoral cap, since February 2000. It seems also that the minister does not know that despite this automatic route for the FDI in higher education, no foreign university or educational institution sprinted to India and established its offshore campus.

No, it is wrong to assume this. Sibal knows everything. It is due to the neo-liberal policies of the UPA government and its refusal to learn lessons from the recent economic meltdown that the people of the like of Sibal are hell bent to throw our higher education system to the predatory elements. People should recall that it was the opposition of the Left to raising the cap on FDI in banking and insurance sectors that saved their hard earned money. Otherwise, their savings would have been wiped out as it happened in the USA and elsewhere.

The Commerce ministry had, in September 2006, circulated a consultation paper on trade in education services. It argued that with a multi-billion dollar industry involving foreign education providers, distance learning and franchisees, "GATS could provide an opportunity to put together a mechanism whereby private and foreign investment in higher education can be encouraged."

It even recommended striking "a balance" between "domestic regulation and providing adequate flexibility to foreign universities in setting syllabus, hiring teachers, screening students and setting fee levels."

In order to strengthen the case of commercialisation of higher education in India as demanded by the big business, the Commerce ministry even questioned the Indian higher education system. It stated, "While India is endowed with a large and growing base of skill professionals (21.4 million graduate workers in 2000), there are conflicting views about the quality of its endowment. According to McKinsey (2005), only 25 per cent of Indian engineers, 15 per cent of its finance and accounting professionals and 10 per cent of Indian professionals with general degrees are suitable to work for multinational companies."

If the McKinsey report was true, what was done by the UPA government to raise the quality of professional and general higher education so far? Most of the professional colleges in engineering, IT, medicine, dentistry, business administration, etc. are in private sector. The CPI(M) and other Left parties have been demanding a central legislation to regulate these institutions in relation to fees, course content, infrastructure, academic standards, examinations, etc. The draft of such legislation, though very weak in its purpose, was issued in 2005. Despite repeated demands of the Left, the UPA refused to take it up.

The UPA government, due to its policy of privatisation and commercialisation of higher education, deliberately failed itself in regulating such institutions through a central legislation that could ensure quality. Now the new HRD minister cries that our youth do not get jobs because they lack in skills. And the key for overcoming this 'lack' has been found by him in allowing foreign educational institutions to establish their shops in India and loot our people in the name of quality and skills.

There are, however, many foreign universities and education service providers operating in India through twinning programmes. An advertisement number AICTE/Legal/03(01)/2006-07 retrieved from the website of All India Council for Technical Education on June 10, 2009, cautions the students as follows:

"As per the information available till date, 169 institutions are found to be conducting courses in the field of technical education without obtaining AICTE approval. 104 institutions are conducting technical education programmes in collaboration with foreign universities without AICTE approval. 

Students are advised not to take admission in technical education courses run by any institution which has not been approved by AICTE. They are cautioned that joining unapproved programmes can have serious consequences in terms of eligibility for employment, higher studies etc."

At the foot of this advertisement, two web-links are given which give the lists of such unapproved institutions and their programmes. What is shocking is that the lists include institutions like ICFAI, IIPM, Ansal Institute of technology and G D Geonka World Institute which regularly issue front page and full page advertisements in national dailies about their programmes and also their tie-ups with foreign universities. These advertisements must have been noticed by the HRD ministry. I visited the website of IIPM on June 12, 2009 and asked it using its online enquiry, "Are your degrees, particularly BBA, MBA and MBE, recognised by the AICTE and/or UGC?" Quickly came the online reply that "IIPM is not affiliated to any university; neither does it seek any kind of affiliation from any such institution in future. It is an autonomous institute and offers its own courses and hence does not come under the purview of any university system / UGC etc." This reply is the worst form of arrogance of private institutions. They know that the government will not take any action against them because they have patronage from within the government. No wonder that several ministers and members of parliament are associated with such institutions and looting the people.

Mr Sibal, your ministry, the AICTE and other law enforcement authorities have been keeping their eyes shut. The AICTE regulation of 2005 provides that "In case it comes to the notice of the council, that a Foreign University is running diploma or/and degree at undergraduate, postgraduate and research level in technical education in India directly or in collaboration with an Indian partner without obtaining a certificate of registration, council shall take immediate steps to initiate action under the Indian Penal Code for Criminal breach of trust, misconduct, fraud and cheating and under other relevant Indian laws." You owe an explanation to the people of this country about what action you have taken against such institutions! 

In this context, note some of the comments of American educational tycoons in the same write up in the Wall Street Journal - "some for-profit schools are already bypassing the bureaucratic roadblocks", "given the US economy and shrinking endowments, (US) colleges may need incentives from the government of India to be able to afford to open". In the US, "college tuitions have risen faster than inflation." The FEIs violating local laws is thus known to all. Given the eagerness of Sibal and UPA government, the aggressive FEIs will bargain hard to get more 'incentives' than even suggested by the Commerce ministry and loot the students and their families.

A noted educationist, Philip Altbach, notes that the subprime mortgage crisis represents a certain analogy regarding higher education. Many of the sellers, including academic institutions and for-profit education providers, are themselves subprime institutions -  sleazy recruiters, degree packagers, low-end private institutions seeking to stave off bankruptcy through the export market and even a few respectable universities forced by government funding cutbacks to enter foreign markets for profit making. Buyers, such as students but also including some academic institutions in developing countries, are similarly unregulated, sometimes ill-informed and often naive.

Uninformed or simply avaricious institutions in developing countries may partner with low-quality colleges and universities in, for example, the United States, Australia, the United Kingdom and receive substandard teaching or degree courses. Regulatory agencies may be entirely missing or inappropriate, thus making quality assurance impossible to achieve. It is the responsibility of the government to ensure that national interests are served and students and their families are not subjected to shoddy business practices by unscrupulous education providers. What is needed, he cautions, is to avoid succumbing to subprime practices and the inevitable crisis that will ensue. In India, despite regulatory bodies like AICTE, sub-standard institutions are flourishing without any quality assurance.

According to the FEI Bill, 2007, which was withdrawn, if a foreign educational institution wants to start an educational institution independently, it will come under the ambit of this Act. And, if it instead makes a joint arrangement with any recognised institution, the provisions of this Act shall not apply.

This is the provision which would have been actually used by FEIs to enter India in the field of higher education as it is now happening illegally. This provision would have also been used by any unscrupulous recognised private institution of higher education to have joint programmes with FEIs and be outside the purview of this Act and make high profits. Moreover, given the definition of 'twinning programme', the FEI is not obliged to offer part of the programme in its country of origin. It can offer part of its programme in "any other institution situated outside India." Using this provision any predatory FEI might offer part of its programme in a country which suits them better for making more profits.

This provision would have also encouraged public funded colleges and universities, starved of funds, to enter into joint arrangements (collaboration, partnership or twinning programme) with FEIs to start self-financing courses in frontier areas of science, technology and other professions with high fee charges in order to raise resources. Thus, this was the provision for keeping those students who cannot afford high fees away from enrolling in such courses. This provision was for a drive towards commercialisation of public funded institutions as well.

The FEIs were required to submit at the time of application its accreditation status in the country of origin if accreditation is applicable there. If accreditation is not applicable in a country, then which accrediting agency will assess, accredit or assure quality and standards was not provided for in the bill.

It may be mentioned here that the Private Universities bill, introduced in Rajya Sabha fourteen years ago in August 1995 had also stipulated a corpus fund of Rs 10 crore for starting a private university. The FEI bill's stipulation for a corpus fund of Rs 10 crore for a foreign university coming to India for profit was a pittance.

The bill also provided that a FEI will have to ensure that the programmes offered and delivered by it in India of quality comparable, as to the curriculum, methods of imparting education and the faculty employed or engaged to impart education, to those offered and delivered by it to students enrolled in its campus in the country of its origin. A FEI ranked of low quality in its country of origin, was not be under any obligation to raise quality in India under that provision. The FEIs were given freedom to have their own norms regarding qualification and pay scales to appoint faculty.

A detailed critique of the FEI Bill, 2007, was presented by this author in these columns in its May 27, 2007 issue. 

It is argued by those who welcome FDI in higher education that due to lack of funds, investments in public funded institutions is being reduced and it is not possible to increase the number of state funded universities and colleges. Therefore FDI in higher education would solve this problem. Another argument is that since a large number of Indian students go abroad for higher education, allowing foreign educational institutions to open their campuses in the country will arrest the outflow of Indian students. As a result, a relatively larger number of Indian students would be able to access quality higher education in the country itself which would be relatively much less expensive in terms of fees, travelling costs and living expenses abroad. This would also not allow the outflow of our foreign exchange reserves.

It is also argued by them that foreign higher educational institutions would create competition with the local institutions enabling them to become internationally competitive. This competition would force the local institutions to change their curricula and respond to the immediate needs of the students. And by this, the degrees offered by these institutions will become internationally comparable and acceptable. Further, the FDI in education would create new institutions and infrastructure and generate employment.

In fact, the FDI in any field does not have an attached objective of fulfilling the social agenda of a welfare state. It is guided by profit and market alone and if these are not fulfilled, the investors look for other destinations for FDI. Foreign investors aim to increase their profits that lead to commercialisation. In the field of higher education, FEIs would launch courses in frontier areas of science and technology, design courses which the market needs, create false impression about their courses through advertisements, charge exorbitantly high fees for courses which have immediate employment potential.

By their money power FEIs would be able to attract best teachers and financially well off students from local institutions affecting them adversely. Since competition entails reduction in costs, therefore infrastructure, laboratories and libraries would find least investment and the teachers and non-teaching staff would be appointed without necessary qualifications on such terms which would be exploitative as is in existence in most private institutions in India today. Teaching, learning process and award of degrees would also not be as rigorous as is required.

FDI would impede the development of indigenous and critical research within our university education system, aggravate the tendency towards commercialisation and strengthen the stranglehold of neo-liberal ideas in our academia. The FEIs would be concerned about their profits and not about our culture and society. Therefore the courses which would appreciate and strengthen our ethos would not be started by the FEIs, and such courses would also get marginalised in public funded higher education institutions due to competition.

These tactics of the FEIs would also result in local private institutions raising their fee charges to establish competitiveness affecting adversely those students who are studying in local private institutions. The FEIs would tend to repatriate as much profit as possible back home thus accelerating the outflow of foreign exchange from the country. Therefore, the argument put forward by those welcoming FDI in education that outflow of foreign exchange from the country could be reversed has no sound footing.

In a market-model university like the FEI, departments that make money, study money or attract money are given priority. Heads of universities assume the role of travelling salesmen to promote their programmes. The thinking and attitudes of students, now called consumers, are manufactured and an education system is created that produces standardised people. Thus the whole idea of culture will be threatened as this standardisation eliminates cultural focuses, thoughts, language, and educational themes. No longer will truth be sought, except whatever suits the corporate interests. As this standardisation is institutionalised through international equivalency, the uniqueness of each educational institution will vanish.

In view of this, no foreign university should be allowed in India and therefore no bill is required. Mr Sibal, the Wall Street Journal is gleeful, as mentioned above, that your government now does not require the outside support of the Left. That notwithstanding, you should not take this initiative which will result in jeopardising the existence of our higher education system. The FDI in education will promote crass commercialisation of higher education. It will further marginalise the already marginalised sections of our youth.