Thin end of the wedge

The group of ministers’ decision to allow foreign universities to set up campuses here is good news because the facilities for pursuing higher education in India are well short of demand. Rapidly escalating salaries are one indication of the shortage of educated people. The government-run institutions are not expanding capacity at the rate required, and the private institutions are of varying quality. As in other sectors of activity, one solution is to turn to foreign providers of quality service. And if some of the $4 billion that Indians spend abroad on getting educated gets diverted to the domestic market, that would be a bonus. Another positive spin-off would be in the global negotiations on trade in services.

The biggest benefit, though, will be the competition that such universities will provide to the established ones here, and the scaling up in quality that will result. For instance, though it is probably easier to get into some leading B-schools overseas than it is to get into the IIMs, most recognise the quality of the big international schools as being superior—a good way to measure this is the number of academic papers written by professors at Harvard, Manchester or Insead, versus those written by IIM professors. It is equally true, as the then HRD minister Murli Manohar Joshi was at pains to point out, that the faculty at the IIMs do not work as hard as their US counterparts. The faculty-student ratio at IIM-A, for instance, is only 1:8 while it is 1:19 at Wharton and 1:14 at Harvard Business School. Most US B-schools have classes for 12 hours a day, the IIMs have them mostly in the mornings.

But the proposal will not enjoy smooth sailing. The Left will almost certainly try to block foreign entry. One way round might be to invite some Chinese universities as well, since the CPI(M) finds the Chinese acceptable. But there are operational issues too: as long as universities have to have their course content and/or fee structure approved by the authorities, and have their admissions subject to caste-based reservations, the better names might choose to stay away. If they are to be exempted, what case will there be for imposing these controls on Indian universities? Then, since the best international universities have a market reputation, they do not need certification from Indian councils. Even though it is homegrown (with some international links), the Indian School of Business chose not to get itself registered with the All India Council for Technical Education, because it did want to bother with India’s education bureaucracy. It has done well regardless, and others will choose to follow the ISB example. Is the system ready for that? It would seem that some degree of government control over which universities enter the country and on what terms, is unavoidable. The question is how that control can be administered with a light touch, rather than with a heavy hand.

Finally, the international universities that pay top dollar will drive a coach and four through the UGC pay scale system; for fear of losing their best faculty to the new arrivals, the established universities will want to drive up their own salaries. That will mean raising student fees—another political hot potato. In short, the implications of what the group of ministers has decided to do are revolutionary. Handled properly, the end results could be beneficial to all concerned. But there will be many a political mine-field to cross to get from here to there.