FDI + Indian universities = Infinite possibilities?

NIKHIL MORO writes from Mount Pleasant, Michigan: With the Left betaal only recently shrugged off, a Parliamentary majority highly tenuous, and an energized BJP nipping at his heels, does Prime Minister Manmohan Singh have the energy to restart economic reform?

That may be anybody’s guess. But the education sector, so far immunized from WTO and GATS negotiations, is begging for a ceding of state control.

In a way it’s odd that private investment for profit should still be disallowed in education, particularly in higher education, after two decades of avowed liberalisation. Two decades is plenty of time to implement cultural safeguards. Investments by charitable trusts and religious institutions have been a trickle, and not universally appreciated.

The National Knowledge Commission seeks a nearly four-fold increase in the number of universities by 2015 for India to maintain any competitive edge. At present only about a tenth of college-age Indians are even enrolled in college; China’s comparable gross enrollment rate is two times that.

In order to increase India’s college GER to 15 per cent by 2015, the Knowledge Commission recommends that spending on higher education, which accounts for less than a sixth of the total spent in education, be doubled to at least 1.5 per cent of the GDP.

Even with limited non-government investment in higher education, nearly a third of college students are enrolled in institutions that receive no government aid.

Additionally, India is under pressure to enhance quality in the existing 350 postgraduate universities and their respective families of about 1,770 undergraduate colleges, which together constitute one of the world’s prodigious systems of higher education.

An average Indian university administers more than 100 affiliated colleges; a few universities administer as many as 400. It is akin to a poor family raising scores of demanding kids. India’s per capita spending on higher education, according to UNESCO figures, is one of the world’s lowest.

Members of the Knowledge Commission are aghast. They want some sort of “family planning” for universities – creating as many as 1500 smaller, “more nimble,” universities by 2015, each taking care of far fewer colleges and spending far more per student.

Clearly, immense investment in higher education is a need of the decade. 

Where the money? The government’s resources are already straining from the unmet challenge of universal literacy: India has 380 million illiterates, more people than the populations of the United States and Canada combined.

Other than raising public bonds, inviting investments from competing private entrepreneurs may be the only sustainable solution. John Elliott of Fortune estimates that investment potential to be $40 billion per year and to increase to three times that in a decade.

So what is the government doing?

Earlier in July, Harvard-educated science minister Kapil Sibal, during a visit to Bangalore, declared his intention to invite foreign direct investment (FDI) in higher education. Not just private but foreign too. Whether Sibal was speaking for the Union cabinet is unclear, but he sure got the Communists’ goat: Three weeks later, CPM secretary Prakash Karat pulled the rug from under the government, albeit over the nuclear agreement.

(Ah, was that a grin crossing Mr. Sibal’s countenance?)

So what might be some implications of opening the sluice gates of higher education to private and foreign investment?

# Dollars/Euros would fund the pursuit of applied, high-demand, subjects (biotechnologies, informatics, telecommunications, chemical engineering, etc).  Some investment would go to the humanities (law, mathematics, philosophy), a trickle to the social sciences (psychology, political science, linguistics) and whatever remains to vocational/trade subjects (aviation, metal work, information technology, etc).

# Academy-industry ties would turn more universities, to a larger extent, into petri-dishes of corporations. R&D activities would migrate from corporations to universities due to lower costs. So more active campuses, more rigorous program requirements, more robust degree programs. Result? More patents and other intellectual property, which in turn would attract even more investments, more trickle-down returns.

# A substantial spike in sources of research funding outside the social sector would result in more avenues for productive student employment, more incentives for creative faculty, a tenure system for professors based on research productivity – more reasons to pursue higher education.

# Education would be priced much higher; tuition and fees would be driven not by utopian fundamentals such as margins of profit or social need but by the inexorable demands of the market.  Banks and other lenders would enter a golden age. Credit rating of individuals would blossom as an industry in itself.

# Resistance to egalitarian programs such as reservation in college seats would get stronger, more so in reservation in faculty positions:  Disadvantaged backward/rural students would find motivation to be as competitive as ever.

# Universities from America and Europe, eager to expand their reach and coffers, would be able to offer high quality programs on their own terms: How about access to the portals of Columbia, MIT or Cambridge while sitting in your red-oxide verandah in Vontikoppal? There’d be a celebration of the scientific method, probably with greater emphasis on process than on concepts.

# Short-term disadvantages to regional aspirations such as Indian systems of medicine and therapy, the Kannada chaluvali, Indology and Eastern philosophies would be corrected over time by the higher-impact creative activities and research.

# The academic year’s pace would hasten; university schedules would move into more flexible, credit-driven semesters or quarters.

Churumuri readers might want to discuss the value additions/deletions from the above implications.

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