Foreign varsity bill hurdle

New Delhi, Aug. 1: Reputable foreign institutions may not come to India if a provision in a proposed law preventing them from taking back surplus from education activities is retained, a parliamentary panel has said.

The Foreign Educational Institutions (Entry and Operations) Bill prescribes a time-bound format for granting foreign universities approvals but bars them from repatriating profits.

The bill was introduced in the Lok Sabha on May 3, 2010, and referred to the standing committee on HRD, headed by Congress MP Oscar Fernandes.

The committee believes that the bar on taking back profits could scare away big names in global education. “It is like one-way traffic. Reputable education providers may feel hesitant about opening campuses in India,” the panel said in its report tabled in the Rajya Sabha today.

Various stakeholders whom the committee consulted had urged the members to consider a fixed percentage of surplus that could be sent out of India by such institutions. But the committee felt that it was up to the government to work out a suitable arrangement.

The bill says prospective foreign institutions will have to maintain Rs 50-crore corpus and register with a proposed higher education regulator before starting operations.

Although surplus generated from education activities cannot be sent abroad, no such curbs will apply to transfer of funds from other activities, such as consultancy and research.

The bill has a clause exempting reputable foreign institutions from maintaining the Rs 50-crore corpus but the House panel fears this could lead to discrimination.

The committee also said that since some of the overseas institutions could be driven solely by profit considerations, the HRD ministry should devise a mechanism under which they are not given absolute freedom in fixing fees, setting admission criteria and hiring faculty. Under the proposed law, the foreign universities will get the kind of autonomy enjoyed by domestic varsities.

The committee felt the Rs 50-crore corpus rule can be relaxed for global varsities that offer programmes in collaboration with Indian institutions. However, in case of medical institutions, the size of the corpus needs to be enhanced, it said.

The bill says foreign universities need to have at least 20 years of standing in their home country to open a campus in India.