Foreign Universities Regulations Reflect Modi Government’s Indifference To Higher Education

Norms recently drafted the University Grants Commission (UGC) to invite foreign universities to open campuses in India have received a variegated response so far. 

According to the norms – titled ‘University Grants Commission (Setting up and Operation of Campuses of Foreign Higher Educational Institutions in India) Regulations, 2023’ – announced by the statutory body’s chairperson M. Jagadesh Kumar, foreign universities will now be allowed to set up their campuses in India; decide their admission process; fee structure and will also nbe able to “repatriate” funds to their parent campuses.  

At this point, the announced measures appear consistent with the broader aim of the National Education Policy (2020), which allows for a flexible regulatory environment to allow top global universities to set up base in India.

The rationale, it seems for the UGC – and the government – is to also discourage Indian students from going abroad to study and seek “quality education” in India through the support of foreign higher education institution (FHEIs) – while allowing the latter to earn and repatriate profits to their home campuses.

A key question worth asking here is, will Ivy League institutions like Harvard, Yale and Princeton be actually incentivised by the announcement and set up campus-offshoots in India? One must also ask why some of these institutions haven’t done this already in many other countries, where regulatory incentives are more generous and lucrative than India. 

A recent study observing the Cross-Border Education Research Team (C-BERT) database reveals that as of 2020:

“There are 37 countries which have “imported” FHEIs (306 campuses overall), of which the largest number of campuses are in China (42), UAE (33), Singapore (16), Malaysia (15) and Qatar (11). In China, barring NYU Shanghai, none of the other FHEIs come from top-ranked global universities. There are a few but they are either joint centres (like Tsinghua-UC Berkeley Shenzhen Institute, University of Michigan-Shanghai Jiao Tong University Joint Institute etc.) or universities set up in collaboration with existing Chinese universities (for example Duke-Kunshan University). In Malaysia too, not a single FHEI is ranked above 100 in the world university ranking.” 

So, most of the top-end institutions haven’t taken the step to open campuses elsewhere (despite incentives given to do so by governments). What’s so unique about the Indian higher education scenario that a well-reputed FHEI will see the probable reason to invest here? After all, the domestic scenario itself remains afflicted with so many structural issues.

Pratap Bhanu Mehta wrote a scathing critique on the latest UGC announcement, observing: 

“This reform will apparently allow for the repatriation of money to the home institution. Now here is the blunt truth about universities. If you want to build a top-class university in India, it will have to integrate teaching and research. This is a financial black hole requiring continual support not derived from fees alone. Any private institution that is for profit that seeks to skim money off education can never build a world-class university since a top-class university requires continual reinvestment. Now, what kind of an institution looks to repatriate “surpluses?” The same kind that in India seeks profit.”

The real issue here relates to the fact that with the abdication of the government’s own social responsibility to build top-class universities/higher education institutions in India (for reasons cited above) no one, including rich ‘edupreneurs’ – engaged in providing higher education through private financing and promoting a “nonprofit” public-private model – have successfully developed ‘institutions of excellence’ in India over the last few decades.

India’s higher education regulatory landscape too has been deeply unreliable. Many so-called greenfield projects announced under the institute of eminence (IOE) push by the government failed to gather any significant attention. The UGC’s own guidelines with respect to admission, faculty hiring and promotion are hardly consistent with standards in the US or other countries with top-universities.

Faculty members face a serious ‘time-endowment’ crisis across both public and private institutions, where the amount of teaching and work-load in administrative duties leaves little time (or resources) for ‘research’. 

Formulaic ranking systems, for which private-public institutions are competing, have made faculty-research less concerned with needs of actual innovation or creative development in serious scholarship, but more aligned to an existing industrial interface of academic publishing produced in form of indexed-journals in a publish-or-perish culture

Most public universities have failed to even hire permanent faculty for open-positions across India and resorted to ad-hoc contractualisation – as evident in private institutions – in hiring faculty on short term temporal (one semester), exploitative contracts. 

Private universities, in terms of regulatory oversight, appear to operate as one of the South China sea islands, where ‘principle’ guidelines of the UGC (much like international law) apply but in practical terms, no implementation of guidelines is seen – and the government does not seem to care. 

The Union governments’ indifferent approach to higher education has allowed edupreneurs to ‘commodify’, ‘privatise’ and ‘franchise’ education as make it a private good. “(The UGC) it seems to have little conception of what combination of capital, vision, and human resources it takes to get a high-end research university going,” notes Mehta.

University Grants Commission. Credit: UGC

University Grants Commission. Credit: UGC

On equity and efficiency

More structurally, the key issues associated with India’s domestic higher education environment are concerned with structural problems of ‘equity’ and ‘efficiency’. 

As this author argued earlier, ‘efficiency’ here means the quality of educational services measured by employability of the skills developed through that education, while ‘equity’ is more creating access to higher education to those interested in pursuing it. India’s track record in both is woefully dismal.

Due to the lack of public investment in an affordable, quality higher education system that is accessible to all, often private institutions have been able to only provide services to those who can pay a higher fees. This creates higher excludability and rivalry among those who are willing to seek higher education, increasing elitism in its distributional system, and thereby, generating structural equity concerns.

Figure: Per 1,000 distribution of students by type of institution for graduation and above

The above figure presenting a spatial distribution of students in public vs private institutions across states, gives us a multi-variate picture. States with a higher per capita income and with more private investments in higher education (among others, Kerala, Tamil Nadu, Maharashtra and Gujarat, etc.) have more students studying in private institutions, while states with a lower per capita income and in the absence of investments in higher education are largely dependent on public institutions (funded by either state or Union government, or both).

These trends, accompanied by the Union government’s benign outlook towards India’s higher education policy, have ominously dissolved the ‘public’ good nature of knowledge dissemination, since the system unequally suffers from problems of excludability and rivalry – which are both understood as definitive features of a private good. 

While no one party or government can be put to blame for the crisis of higher education present in India, the Narendra Modi government’s own role in accentuating the crisis cannot be side-stepped. On spending, as a share of total GDP, the budgetary allocation for education by the Modi government has seen a minimal gain of 0.1% from 2.8% to 2.9% between 2015-2022 (see Figure below).

Source: CNES InfoSphere

An apathetic approach, and gradual abdication of the government’s social responsibility to spend and invest enough in the young’s education prospects left too much for the ‘private sector to do’, which in context to education (much like healthcare) can almost never substitute the key role of the state-given how institutions require continuous spending in human capital development realisation (and private institutions are guided more by ‘profit’, drapping their cause to earn them in ‘public service interest’). 

Why Government can only spend to invest in education capacity and top-institutions

As noted economist Kenneth J. Arrow once argued, the “imperfections of (private) capital markets” and “asymmetric (unequal) information” are possible justifications for the public funding of higher education. In Arrow’s own reasoning, the crucial difference or problems related to public and private provisioning of education lies in optimising (addressing) problems of both efficiency and equity

It does not matter which entity (public or private) provides economic and social support (in providing higher education) as long as an efficient, equitable process is culminates in a comprehensive and productive learning environment. 

Defining these two problems of efficiency and equity in context of higher education remains therefore, vital. In higher education the problem of efficiency is more related to what we should be efficient about than whether we should be efficient

In case of equity, meeting some pre-defined set of egalitarian considerations for student admission (in order to avoid excluding anyone else who is deserving) becomes more controversial as only some students (female or male), specifically those with fee-paying capabilities and entrance exam merit are admitted to the institution.

It seems more viable then, to invest more heavily on the knowledge content of higher education to make the process of learning efficient and equitable than solely deal with the problem of accessibility (as egalitarians may argue). It is inevitable in developing societies such as India for higher educational institutions (public or private) to exclude a margin of people or be unable to admit everyone who can potentially gain from educative services offered.

Unfortunately, the UGC and the government have failed to recognise this. 

A lot is evident in this recent statement made by the current finance secretary of the Modi government after the Union Budget 2023 was presented, where he said: “Pushing more money into education will achieve nothing”.

In this context, the latest UGC announcement comes across as yet another act of deception on part of the regulatory body and the government, failing to recognise, realise, or in any serious way, address the core concerns of India’s higher education crisis.

A version of this piece was first published on The India Cable – a premium newsletter from The Wire & Galileo Ideas – and has been republished here. To subscribe to The India Cable, click here.

Deepanshu Mohan is associate professor of economics and director, Centre for New Economics Studies at Jindal School of Liberal Arts and Humanities, OP Jindal Global.