Union Budget 2024: India's progressive policies set stage for a global education hub

October 2022 and November 2023 are landmark months for the Indian higher education ecosystem. With the objective of internationalising higher education, the Indian government has enabled foreign higher education institutions to set up campuses in India, either in the GIFT City through the International Financial Services Centres Authority Regulations 2022 (“IFSCA Regulations”), or anywhere in the country under the University Grants Commission Regulations 2023 (“UGC Regulations”).

This is a very welcome move as it would not only bring in global quality standards of education at an affordable cost for students, but also help in improving the research landscape in the country, develop and attract high quality faculty and enhance greater collaborations between foreign higher education institutions and Indian higher education institutions — all of these should result in India being seen as a global education hub, a goal set forth under the National Education Policy.

As part of the consultative process of policy development, one of the key asks from foreign institutions was for them to get operational flexibility for their campuses in India. And the regulators have not disappointed! Both these regulations are very progressive and provide enough autonomy to foreign educational institutions to operate their India campuses. Be it the academic programmes, fee structures, student admissions, faculty hiring, infrastructure development, etc., all can be done as per their own processes, policies and global standards. But, is this enough? While my personal view is that the regulatory framework is extremely flexible, there are few more facets where the government could provide additional support or clarity.

Streamlining the Foreign Contribution Regulation Act (FCRA)

Receipt of grants and donation from foreign sources is an important source of income for educational institutions, including for conducting joint research programmes with overseas institutions/corporates. Such receipt of grants or donations in India need prior permission or registration with Ministry of Home Affairs (MHA), which is an extremely time-consuming process. Similarly, foreign educational institutions considering setting up a not-for-profit entity for operating a campus in India, will need clearances from MHA for their capital flows. Defined timelines for obtaining such clearances must be clearly outlined, including a streamlined process. Additionally, FCRA typically restricts organisations with foreign nationals on their executive committees or governing bodies, from receiving foreign contributions, though certain exceptions and relaxations exist. Given that the governance framework of these India campuses may have foreign nationals on their executive committees or governing bodies (to ensure maintaining quality standards between home campus and India campus), it would be important for MHA to clarify applicability of this restriction and provide exceptions.

Further streamlining the GIFT City Regulations

The IFSCA Regulations require fee payments by students to be in foreign currency. The charges levied by banks for converting INR to foreign currency is quite high and will add to the financial burden on students/ parents. An exemption should therefore, be given for students to pay their fees (academic, hostel and other similar payments) in INR. This regulation also stipulates a 5-year validity period of certificate of registration to foreign educational institutions. Educational institutions are set up on strategic and long-term basis. The process for renewal every 5 years causes administrative inconvenience. This provision may be done away with, making the permission perpetual, which will also be aligned with UGC Regulations.

Further streamlining the UGC regulations

In the post-covid world, using technology to deliver education has been an acceptable norm. Online education has the benefit of providing flexible learning opportunities for students, and at the same time, helps access to quality and world-renowned faculty to deliver lectures. While the IFSCA Regulations do not stipulate any restrictions for online delivery, the UGC Regulations stipulate that the programmes shall not be allowed in online mode (though 10% lectures in online mode is permissible). Over a period of time, this restriction can be re-visited by the regulators and flexibility given to the educational institutions to deliver programmes in any mode, as per students’ convenience and needs.

Streamlining processes to promote innovation

A fast-track process for application and grant of patents for educational institutions should also be introduced. Grant of patents is a sign of innovation. With reduced timelines for application process and for the grants, will trigger better research and development in the country.

Conclusion

There are millions of students in India who aspire for global education, but are unable to pursue due to affordability issues. These regulations will help fulfill their aspirations. Both regulations represent a significant stride in reshaping the education sector, fostering quality education, creating opportunities for youth and advancing India’s global standing. The year 2024, will hopefully, see greater traction where global institutions will come forward and apply for license to set up a campus in India. In the meantime, a nudge to issue necessary operational clarifications, maybe as part of the Union Budget 2024 which is round the corner, can help go a long way in further attracting global higher education institutions, as part of these watershed regulations.

The author is Partner, Deloitte India. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.

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