Lack of clarity worries foreign universities

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KPMG-EDGE Report

The Foreign Education Providers (FEP) bill 2010, which is pending approval by the Parliament, needs a thorough analysis to address a slew of concerns that continue to worry foreign universities, says a latest study by the KPMG-Edge.

“While the bill has generated a lot of interest among universities looking at India as a prospective location for setting up campuses, the prevailing lack of clarity in requirements and the prospect of the bill actually becoming a law have been hindrances,” said the report, which was released at the ongoing Indo-US education conclave here.

Issues relating to ownership/partnership; regulation; finances and repatriation of funds; curriculum ownership; operational compliances and a conducive environment to draw the best of the faculty need to be looked into urgently, the 25-page report said.

Narayanan Ramaswamy, partner and head (education sector) at the KPMG, said, “Private partnership and foreign collaborations are the way forward if India is to meet the ambitious target of achieving a 30% gross enrolment ration (GER) by 2020.”

The GER refers to the percentage of population in the relevant age group of 17 to 22 that makes it to the institutions of higher education. India’s GER is at 12.4%, which is below the global average of 26% and way below the 50% to 70% GER in developed countries like the US and the UK.

Meeting the 30% GER will require India to set up 1,000 more universities and 50,000 more colleges to have 40 to 45 million enrolments, which would be double the present enrolments.

“This offers a huge scope for private partnership and foreign collaborations and merits quicker legislation of the FEP Act,” said Ramaswamy.

As of now, foreign varsities are skeptical about the practical viability of setting up a campus in India, the report said. “The bill mandates that each university has to maintain a corpus of Rs 50 crore and the profit made is to be ploughed back into their branch in India. Besides, there is no clarity on taxation and regulations in setting up a branch in India,” it added.

The government has not yet warmed up to the idea of ‘for profit’ education institutions in the country owing to various compulsions, the report said.

“We (in India) have a complex regulatory system compared to other countries like China, which allows setting up of ‘for profit’ institutions,” said Hemal Zobalia, KPMG partner (tax and regulatory).

According to Ramaswamy, lack of quality faculty, “ineffective” accreditation system and low employability of graduates are major challenges before Indian higher education. “We need a focused attention on areas such as securing a more broad-based student exchange that goes beyond technical and management studies to cover other streams like vocational, humanities and culture, which can also lead to a reverse exchange i.e. foreign students coming to India,” he said.

Similarly, faculty development by way of leveraging the US advantage; adapting to online initiatives; vocational programmes where the US has a lot to offer in areas such as automotives, hi-tech industries, entertainment, infrastructure and finance markets; and research and development are the other areas needing attention, he said.