July 4, 2010

In Parliament

The regulatory architecture of the higher education sector is being recast. The human resources development ministry has circulated the draft National Commission for Higher Education and Research (NCHER) Bill for public feedback. It has also introduced four bills that regulate various aspects of education institutions. In this brief, we examine how these bills define the new regulatory landscape.

Two high level bodies, the National Knowledge Commission (NKC) and the Yash Pal Committee (YPC) were set up by the UPA government in its first term to examine issues related to higher education. While there were significant differences in the recommendations, both bodies recommended that there be a single regulator for the higher education sector, instead of the current system of different regulators for technical, medical and legal courses. The NKC also suggested that the system of colleges being affiliated to universities be phased out, and the number of universities be increased by converting individual colleges and clusters of colleges into separate universities, as well as by establishing new ones. It also stressed on the need to strengthen undergraduate degrees by increasing flexibility of choosing courses and shifting to a semester system.

The new structure
The five bills together define the new regulatory structure. First, the draft NCHER Bill establishes a regulator for tertiary education. Second, all universities and programmes will require quality certification; this mechanism is established by the National Accreditation Regulatory Authority for Higher Education Bill. Third, the Prohibition of Unfair Practices in Technical Educational Institutions, Medical Educational Institutions and University Bill, 2010 regulates admissions and fees charged by these institutions. Fourth, the Educational Tribunals Bill provides for a separate judicial structure to adjudicate cases related to educational institutions. Fifth, the Foreign Educational Institutions (Regulation of Entry and Operations) Bill sets conditions under which foreign universities may function in India.

The NCHER Bill
This bill creates a new regulator—NCHER—for all tertiary education other than medical and agricultural education. The regulator will replace the University Grants Commission (UGC) and the All-India Council for Technical Education, and will take over the function of regulating legal education from the Bar Council. The NCHER will also be responsible for determining grant funds—contrary to the recommendation of the NKC to separate regulatory and grant functions.

The NCHER has a chairperson and six members selected by the prime minister, the speaker of Lok Sabha, the leader of opposition in the Lok Sabha and the ministers for higher education and medical education.  The bill also sets up a collegium with core and co-opted fellows to aid and advise the NCHER. Core fellows require to be Indian citizens or Overseas Citizens of India who have been awarded the Nobel prize, Fields medal, Jnanpith award, are members of an “academy of international standing”, or have been national research professors.  There will be one co-opted fellow from each state and union territory, elected by core fellows from a panel of five names nominated by the state government.

The NCHER is tasked with taking “measures to promote the autonomy of higher educational institutions … through reforms and renovation”.  Curiously, the means to promote autonomy include the following: It will develop a national curriculum framework; it will specify norms of academic quality for a university to affiliate colleges; it will develop policies and processes to increase student-teacher interactions. And even more ironic: it will maintain a national registry of persons eligible to be vice-chancellors and heads of institutions; every institution—whether government or private sector—has to select from this list. As an analogy, just imagine SEBI developing a list of eligible CEOs of listed companies.

The Foreign Universities Bill
This bill permits foreign universities to operate in India after getting clearance from the UGC. They need to bring in a corpus fund of Rs 500 million and are barred from repatriating any surplus generated. The programme of study is required to conform to the standards set by the relevant statutory authority (UGC, AICTE and so on). The Union government may grant exemption from these conditions (except the repatriation ban) to any institution. A significant issue that arises is that these exempted foreign universities will have significantly lower regulatory oversight than Indian universities (including private ones); this creates a non-level playing field to the advantage of certain foreign entities. Another question is whether the ban on repatriating surplus will deter investments; however, this condition is similar to the non-profit requirement for domestic private universities.

The Accreditation Regulatory Authority Bill
This bill intends to increase information to prospective students about the quality of programmes offered by all institutions. All programmes and all universities need to obtain a quality rating from accreditation agencies (analogous to credit ratings for financial instruments).  These accreditation agencies will be regulated by a new regulator.

Whereas the idea appears to be sound, there are several issues that need to be resolved. The bill requires all accreditation agencies to be non-profit and owned by the central or state governments; this requirement removes all competitive and profit-seeking forces that lead to improvement in quality and efficiency. Second, these agencies are required to help the educational institutions improve their standards; failure to do so will be an offence.

The Unfair Practices Bill and the Educational Tribunals Bill
The Unfair Practices Bill prohibits capitation fees, and requires all institutions to disclose the details of their fee structure. It also penalises false or misleading advertisements. The Education Tribunals Bill establishes state and central level tribunals. State tribunals will adjudicate disputes related to service issues of teachers and employees, affiliation of colleges to universities, and unfair practices. The national tribunal, in addition to hearing appeals against the decisions of state tribunals, will adjudicate disputes between an educational institution and a statutory regulator, and affiliation issues when it involves parties in more than one state.

Quo vadis?
Higher education faces supply constraints, quality issues, flexibility for students and lack of a thriving research environment. Public universities need to be strengthened and expanded and private investment incentivised. The shortage of qualified teachers needs to be addressed by strengthening doctoral programmes. Competition amongst universities should be encouraged—after all, the main currency of any university is its reputation and intellectual influence—and they should be allowed sufficient autonomy and independence in developing programmes, selecting students and appointing faculty. There should be mechanisms for ensuring transparency about the quality of courses, and the costs of pursuing them. And the structure needs to be inclusive, in the sense that any aspiring student should not be denied opportunity on the basis of economic or identity status. The big question is whether the proposed structure—as defined by these five Bills—address these issues adequately.

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