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Foreign universities in India? No, say Arjun Singh, Left parties

By George Iype
September 14, 2006 09:10 IST
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Do you want to send your kid to a playschool run by a foreign company in your neighbourhood?

Perhaps, you may be able to do so. That is, if a proposal by the Union commerce ministry to allow foreign direct investment in education in India is approved by the Manmohan Singh Cabinet.

Already a number of foreign universities and companies that operate in the education sector have shown keen interest to enter India. One of the first proposals has come from Denmark-based Egmont Imaginations that has submitted a proposal to the Indian government to set up 200 playschools in India.

Also American major universities like Yale, Stanford and Georgia Institute of Technology have announced that they are keen to set up greenfield campuses in India as and when the country liberalises education.

After allowing FDI in key sectors such as telecom, insurance, food processing and even retail, the Manmohan Singh government is toying with the idea of permitting foreign investment in elementary and higher education.

However, it may not be an easy decision, as already the human resource development ministry and the Left parties have raised an alarm against the move.

But before we get into that, let us check out what are the merits that the government sees in allowing FDI in education?

According to G K Pillai, special secretary in the ministry of commerce, the government is mulling various options to open up the education sector for foreign investment.

"We are preparing a discussion paper on the matter. Once ready, the proposal recommending FDI in education will be sent to the HRD ministry and Indian universities for their comments," Pillai told

Explaining the need for foreign investment in education, Pillai said that every year the outgo from India on education to foreign countries is more than $4 billion. "If foreign universities are allowed to set up shop in our country, this huge money can be very well saved," he claimed.

According to officials, the commerce ministry's proposal FDI in education will contain the following arguments:

Indian economy currently incurs an outgo of more than $4 billion every year because thousands of students go the United States and Europe for higher studies.

The best universities in the world like Harvard, Oxford and Massachusetts Institute of Technology (MIT) will come to India, facilitating world class research.

Many students from the neighbouring countries -- especially South Asia -- will come to study in India, if foreign universities open their branches. This would make India a potential education destination.

FDI in education will help Indian students to study in an environment of world class labs and libraries.

It will also help Indian students tremendously in getting jobs in multinational companies.

Officials said most probably, the commerce ministry is likely recommend 100 per cent FDI in education, meaning top universities in the world can set up full-fledged subsidiaries in India, without any local tie-ups.

Already, many globally acclaimed universities and institutes have franchisee tie-ups with Indian institutes.

As the proposal gets finalised, opposition to FDI in education rises from two quarters: HRD Minister Arjun Singh and the Left parties, who argue that it goes against national interests.

Officials in the HRD ministry say Arjun Singh has already informed the commerce ministry not to hurry the proposal. The HRD ministry's objection is that not many countries are pushing for FDI in education under the Word Trade Organisation agreements.

The ministry has recommended a 'cautious approach' to FDI in education, considering that other countries in the Third World and Muslim nations have told the WTO that they will not open their education sector as doing so might affect the local political and cultural sensitivities.

So when the commerce ministry's proposal is sent to Cabinet for discussion, it is certain that the HRD ministry will oppose it.

The ministry has already set up an internal committee to review whether it is advisable to open up the elementary education sector to 100 per cent foreign investment.

Supporting the HRD minister in this regard are the Left parties.

"You can not treat education as an industry. Opening up the education sector for foreign players will be a cultural attack on India. We will not allow that," Communist Party of India national secretary D Raja told

According to Raja, FDI in education will lead to rampant commercialisation of education. "Already, higher education in the country is suffering from commercialisation," he said.

Agrees Communist Party of India Marxist politburo member S Ramachandran Pillai. "We do not understand what is the need for allowing foreign investment in India's education sector. We will oppose this policy," Pillai said.

He said FDI in education will equate education with industry. "Well, what is the need for us to run foreign playschools, colleges and universities in India?" he questioned.

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