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Higher Education – Competition at doorstep : Macro Impacts

Foreign Institutes are knocking at our doorsteps. The Foreign Educational Institutions Bill was approved by the India’s cabinet in Mar-10. It is pending for Parliament approval. Observers expect that the bill will be passed by the parliament as is or with minor changes.

India sends around 100,000 students per year to US for higher education. Per V. Rangaraj President of Indo-American Society. “There is another almost four times the number of students who want to study in the US. Thus, there lies a huge opportunity for US educational institutions to access these students by bringing their brand of education into India”.

On the heels of this bill, Indo-American Society, is celebrating the golden jubilee with focus on higher education. This event will be inaugurated by Union Human Resource Development Minister Kapil Sibal on July 30. The event is expected to create collaborations between educational institutions, and exchange programs involving students, faculty and researchers from both India and the US. Prominent personalities from US education sector are participating in this event. Looking around the news and blogs, one thing is highly visible that administrators and chancellors of renowned universities of US are visiting India to meet with government officials, local universities to explore opportunities.

Macro Impacts

Based on the information available so far, it is expected that 150 – 200 foreign institutions are looking foward to put up their brick and mortar footprints in India. The new dynamics will create a macro impact in the education sector – governing bodies, governing laws (reservations etc.), overall market, education service provider (Institutions) and education receiver (Students). In this blog, I am going to discuss the first three. Other two will be discussed in part 2.

Governing Bodies

Kapil and his Human Resources Development (HRD) team has called to abolish existing governing bodies like University Grants Commission (UGC), All India Council for Technical Education (AICTE) etc. Professor Yash Pal’s report recommends the same and he is vocal about this. It is supposedly replaced by the National Commission for Higher Education and Research (NCHER), which is recommended as a core and central body to govern all the disciplines including Medical Council of India, Dental Council, and Pharmacy Council. Negotiations between HRD and ministry of Law and Health underway to bring all governing bodies under NCHER.

While Ministry HRD (MHRD) is rallying hard behind one single exam for all India entrances, it will be interesting to see how this process will be impacted because of the new entrants. Like US entrance exams SAT/ACT, GRE/GMAT, India will have single central exam (at least for non state governed colleges), which will be governed by NCHER. Institutes will be more objective while giving the admission to students. Arrival of foreign institutes in the market may act as a catalyst.

Governing laws

According to this bill Quota laws will not be applicable to foreign institutions. The reaction of the groups impacted is yet to be seen.

Overall Market

There are two categories of students which will have the wider option of going for advance studies. First, those who wants to go abroad for further studies but don’t get opportunities. Second. those who doesn’t consider higher education as an option. I highly doubt that there will be any decrease in the cash outflow, which Ministry of Human Resources Development (MHRD) is expecting due to brain-drain of Indian students worldwide. In my opinion some of the key reasons students go abroad are – (i) True international exposure; (ii) Taking advantage of research and great educational opportunities; (iii) Taking advantage of scholarships; (iv) Looking to settle abroad; (v) Status in the society. Most of these factors will impact very few students. Small percentage of the impacted will be replaced by the students next in line. However, the true opportunity is that over a period, India can turn into a regional “Educational Hub”. It will attract students from Mid West Asia, South East Asia and Far East Countries. This will subsidize the cash outflow.

Another area, which will be interesting to watch is the overall curriculum, learning and development of students in the classroom and outside. Most of the higher education institutes focus more on theory rather than training newcomers in the practical aspects of starting work in – corporate, government, public sector, non-profit sectors etc. Most freshers go through on-the-job training before being exposed to the real action. This change if and when happens will definitely impact the job market positively in my opinion. It’s too early to comment more on this. Your comments are welcome.

The bill calls for keeping the money in corpus fund and the surplus needs to be invested back in the development of the education sector. This could prove vital in creating the infrastructure – which fosters innovation.

The bill does not allow distance learning programs by foreign institutes which I see as a good opportunity for local institutes (discuss later). Bill also does not allow twinning programs so it will be interesting to watch if foreign institutes start from ground-up or find loop holes to acquire an existing local institute and turn it into their own brand.

Few open ended questions are:
1. Will foreign faculties also be hired?
2. What will be the value of these degrees/certificates in the foreign job market?
3. What are the schemes provided for students to get global exposure?
4. What will be the impact on the cost of the education in India?

India has a huge appetite for quality higher education. As long as institutes don’t run in the bandwagon of giving degrees/certificates just for the sake of making money instead focus on – (a) Developing core qualitative processes with customer friendly services; (b) Design and create an atmosphere that nurtures real life exposures, fostering an innovative culture. India alone has a huge talent pool. Adding regional talents will cultivate more entrepreneurism. Nurturing changes does not happen overnight. It’s a building block approach and this bill brings us one step closer. I believe that in the long run this competition will change the face of our society – An Innovative India, we all have eagerly been waiting for.