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Education Revolutionized

The Foreign Educational Institution (Regulation of Entry and Operation) Bill, 2010

A milestone that will enhance choices, increase competition and benchmark quality

The Bill

The Cabinet on Monday (15th March) cleared the Foreign Educational Institution (Regulation of

Entry and Operation) Bill, 2010 for tabling on parliament Floor. Although 100% FDI through

automatic route has been allowed in education since 2000, degrees granted by such Foreign

Institutes were not recognized.The bill would allow foreign universities to set up campuses in

the country& be recognized by the UGC, a major break with the previous policy in which outside

institutions were seen as a threat to the education system.This bill, if passed, has the

potential to create the same impact on India's higher education sector as the

economicliberalization& deregulation in the nineties had on India's industrial

sector.

Provisions

The Bill prescribes an eight-month, time-bound format for

granting approval to foreign educational institutions to set up

campuses.Similarly, foreign universities will have freedom to

fix fees and decide their admission process and course

contents.Foreign institutions will not have to comply

with the admission quotas for minorities.

Safeguards

The bill would require universities to invest a minimum of

about $11 million and would prohibit them from repatriating

profits. However, they can participate in consultancy projects

and other activities and the profits generated from such

projects can be remitted abroad. The foreign institutes will

also have to invest at least 51% of the total capital required for

establishing an institution in India.Any

foreign university interested in setting up a campus in India will have to deposit a corpus of Rs

50 crore with the UGC.These institutes will also have to hire a major part of their staff from

among Indians

Capacity Expansion

500 Million Indians need to be educated & trained in the next 20 years. This makes India one of

the largest Education Markets available in the world. A mammoth task duly recognized by the

planning Commission in its Vision 2020. The Government alone simply cannot build such an

Infrastructure. The private sectors Performance too is far from in this regard. Calling upon the

In India, the top 15

premier institutes can

accommodate only 5,000

of the lakhs of students

(more than 2.15 lakh this

year) who take the

Common Admission Test

(CAT) annually. Clearly,

opening handful new IIMs

was not going to be the

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entire World to educate Indian Youth & be a part of India Story was a wise move by Dr.

Manmohan Singh.

Quality

This move has the potential to solve the biggest lacuna in the field of Education : Outdated

S yllabus. With most Indian universities bothering little to keep themselves updated with thelatest in practical world, this could be a wakeup call. The foreign universities would project their

Course contents as their USPs. The ensuing Competition would ensure that more or less

Similarity is achieved in the Contents of various programs across India. Greater autonomy to

Indian premier institutes will be one of the logical fallout of the entry of foreign institutes into

the country.

Teaching:: A Lucrative Profession

The foreign Universities would initially bring in their expert foreign Faculties. But it would be

difficult to sustain large programs with foreign faculties and will end up recruiting local Talent.

The lucrative salaries offered by these foreign Universities would put teaching back as a hotcareer option. From todays situation where even IIMs & IITs find it hard to fill their positions,

the time is not far when there would be no dearth of expert teachers for all students

Competition

The bill signals the end of monopoly of Government Institutions in the Education sector. The

entry of Foreign Universities will lead to increased competition in Education space. Currently

leading Private universities like Amity, Lovely, IIPM, S ymbiosis, ICFAI are aggressively into

brand building & promotion. It would be worthwhile to note the changes they would have to

introduce & the new concepts they would come up with to stay abreast with Competition. The

foreign players will change the game forever. From aS

ellers market, Education now is atthreshold to become the Buyers Market.

Cost Savings::A boon for Students & parents

Those who are obsessed with foreign degrees may find this move a very welcoming one to their

wallets. India will save a substantial amount of Foreign Exchange.India sends about 100,000

students to the United States every year, more than any other country.Students can access

quality education at the fraction of the cost. Yes, some foreign institutes may charge fees in

excess of that currently being charged by the country s premier B-schools like IIMs, but

remember, students stand to benefit as they can save on their travel, lodging, boarding, and

other expenses.

SWOT Analysis

If Top B-Schools like Harvard, Stanford, Columbia, Kellogg set up Campuses in India, it would

be interesting to see how long IIMs will be able to maintain the crazy rush for them. Maybe CAT

may no longer remain the Mother of all exams.

-Sunil Pillai