| FDI in education can save country billions of dollars | |
| Leslie D'Monte & Kirtika Suneja / New Delhi July 20, 2009, 0:29 IST | |
Around 160,000 students from India are studying abroad
If the Cabinet allows for 100 per cent foreign direct investment (FDI) in higher education, it will not only help in providing cheaper yet better quality education but also save India billions of dollars by way of foreign exchange (forex) outgo.
Union Minister for Education Kapil Sibal who, sources close to the development say, is all set to present the Foreign Educational Institutions (Regulation of Entry and Operations, Maintenance of Quality and Prevention of Commercialisation) Bill to the Cabinet for clearance has pointed out that the country’s education sector needs Rs 4 lakh crore. Thus, he made a strong pitch for greater private investment and allowing foreign universities with necessary regulatory mechanisms in the sector.
If the Bill is passed, not only will the move bring in the much-needed investment but it will also entice more foreign students to come to India for higher education. Even 50,000 foreign students charged fees at an average rate of $10,000 per annum would yield $500 million (around Rs 2,800 crore) per annum, according to the National Knowledge Commission (NKC) report.
Moreover, it’s estimated that around 160,000 students from India are studying abroad. If their average expenditure on fees and maintenance is $25,000 per student per year, Indian students are spending around $4 billion per annum, not academics. Many of these students may want to study in India since the costs would be lower.
Besides, Minister of State for Finance Namo Narain Meena admitted in the Rajya Sabha recently that nearly 100,000 Indians held student visa in Australia at the start of the financial year, and the total global outflow of education-related foreign exchange was more than $2 billion last year.
On the total forex outflow in terms of overseas students’ tuition fees and expenses to Australia, he added that the government does not maintain a detailed country-wise break up of the forex outflow. “Remittance towards tuition fees is a current account transaction and RBI have delegated the powers to authorise dealers to allow remittances towards tuition fees without the prior approval of RBI,” he said.
The total forex outflow in terms of education related payments from India to all foreign countries stood at $2,247 million in FY’09 (provisional amount). The partially revised figures for FY’08 stood at $2,827 million. While, the two fiscal years FY’06 and FY’07 saw an outflow of $1.1 billion each and the same was $642 million in fiscal 2004-05.
The HRD ministry admits to not having up-to-date numbers “due to the absence of regulation of foreign education providers.” However, in 2004 (the latest data available), there were 131 Indian institutions that collaborated with foreign institutions with Tamil Nadu having the maximum of them — almost 23.
Currently, there are around 31 foreign universities operating in India of which 11 are based in the UK and 13 in the US. Others like the International Mangement Institute, Europe and National University of Singapore, Merit Swiss Asian School of Hotel Management are also there.
However, there also exist 11 foreign institutions operating under ‘twinning’ programmes like UK’s Glasgow College of Nautical Studies, Queen Margaret University College and Newcastle Business School and US' University of South Florida, Ohio University and Western International University, among others.
‘Twinning’ allows a foreign partner institution to offer the first half of their university degree programmes by replicating segments of the curricula. Through Twinning, students may earn about 60 credit hours in the beginning courses (and general education requirements) of selected majors — example: Business administration, communications, computer science and engineering. In effect, students can complete their freshman and sophomore years without leaving their home country. Students who successfully complete such a twinning program are guaranteed transfer of their credits to the foreign university.
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