Business Today

One giant leap for higher education

The entry of foreign universities will transform higher education in India and the country could emerge as a global education hub, argues Bakul Dholakia.

Bakul Dholakia | Print Edition: April 18, 2010

To be honest, the Foreign Educational Institution Bill was long overdue. Our higher education needs comprehensive reforms. The passing of this Bill will not only initiate but also accelerate the process of reforms in undergraduate and postgraduate education. Let me draw a parallel with the reforms in the industrial sector. The economic liberalisation and deregulation introduced in the early nineties completely transformed the face of Indian industry. In less than two decades, Indian industry has achieved spectacular growth and global recognition.

This Bill has the potential to create the same impact on India's higher education over the next two decades. The demand for quality higher education is growing rapidly with the number of students securing first class in board examinations increasing phenomenally every year. However, the capacity of quality education providers in the country has not been growing at the same pace. As a result, the admissions to institutions like IITs and IIMs are getting tougher.

Several top-flight colleges have evinced interest in India.

  • Harvard Business School has an India Research Centre. It's now planning an Executive Education Centre.
  • Columbia University will set up an international centre for research and regional collaboration in Mumbai.
  • Yale University has launched a 'Yale India Initiative' for faculty and student exchanges, research partnerships with Indian institutions.
  • University of Glasgow, Imperial College and University of Surrey are keen to set up institutes in the country.
If Harvard, Stanford or Columbia come to India, they will maintain the high quality of education at their Indian campus to protect their brand equity. Sure, the fees charged will be much higher than the frontranking universities and colleges in India, but the overall cost of education for students will be a fraction of what they are paying overseas. The biggest impact would be increased access to high quality education for a larger number of Indian students. To sustain their high standards of education, the foreign institutes will encourage their overseas faculty to teach at their Indian campuses.

Similarly, when the foreign universities recruit Indian faculty from within the country, their attempt would be to attract the best available talent. Since the salary package offered by foreign universities on their Indian campus will be much higher than what is offered by the domestic institutions, there would be some exodus of faculty from premier Indian institutions in the short term. In the long run, the better pay packages offered by foreign universities will also improve the pay packages in Indian institutions and will motivate young talented boys and girls to join the faculty of world-class institutions. It would augment the supply of qualified faculty in India and remove the major constraint on capacity expansion in higher education.

Moreover, with the entry of reputed foreign universities on a large scale, India could emerge as a global education hub. Indian educational campuses will gradually acquire the flavour of well-known overseas campuses with an ideal mix of foreign and Indian students as well as faculty providing cross-cultural exposure to thousands of students, which is critical for successful globalisation.

One of the major arguments against the Bill is that the entry of foreign universities will benefit only high income groups, as the children from the low income groups will not be able to afford the high cost of education. There are two ways to deal with this problem. The foreign universities can be asked to provide scholarships to a certain proportion of meritorious students belonging to lower income groups. Secondly, the education loan scheme should be liberalised and given the status of priority sector lending. The government should introduce a specificallytargeted scheme to subsidise the interest cost of loans given to the meritorious students.

The key to success of the reform will be avoiding excessive monitoring and control. We will attract the best institutions to set up campuses in India, only if we offer the same environment to them as they are used to in developed countries.

— The author is a former Director of the Indian Institute of Management, Ahmedabad.

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