National Commission for Higher Education and Research 2010
This Bill is currently in the process of being finalized and is open to feedback from public stakeholders. It has
created a significant interest because it envisages the creation of the National Commission for Higher Education
and Research (NCHER) which will replace both the UGC, AICTE. This is based on the recommendations of
both the Knowledge Commission and the Yash Pal Committee that have reposed their trust in an all powerful
commission to ‘rejuvenate’ the education system and remove multiple regulators.
The Foreign Educational Institutions (Regulation of Entry and Operations) Bill, 2010 (FEI Bill)
Overview of the Bill
The Bill seeks to include within its ambit all foreign education institutions (FEIs), whether existing and
proposed, set up independently or in collaboration with an Indian partner/ education provider, an institution that
provides education resulting in degree, diploma or certificate in India. Distance Education has been excluded
from the ambit of the Bill.
FEIs proposing to award degrees and diplomas are required to mandatorily seek notification from the Central
Government as a ‘Foreign Education Provider (FEP)’, subject to meeting specified eligibility criteria. These
requirements are clearly aimed at ensuring that only established and financially sound FEIs qualify. Those
providing certificate courses have lighter reporting requirements.
Any FEI proposing to make an application for registration needs to have the application endorsed by the
Embassy/ High Commission of the home country where the FEI is registered and situated. Every application
must inter-alia contains:
documentation to establish that the applicant has a 20 years track record in the home country
undertaking to maintain a minimum corpus of ` 500 million
status of accreditation in home country and
information on the financial soundness of the applicant.
The steps that are followed in the review of an application for notification of an FEI as an FEP are as detailed
in Exhibit 13. The Bill prescribes norms for utilizing the income received from the corpus fund. It states that
only 75% of the income received from the corpus shall be used by the FEP for development purposes and the
remaining 25% must be deposited. There are not only caps on the amount that can be utilized, but also
restriction on repatriation of surplus outside India, another measure aimed at protecting Indian students from flyby-
night operators. Quality is ensured by mandating that the quality of programs offered in India is comparable
with those offered by the FEP in its home country. It additionally ensures transparency by requiring FEPs to
publish a prospectus 60 days prior to the commencement of admission for purpose of providing information,
inter-alia, regarding fees, faculty and infrastructure to prospective students and to also provide specified details
on its website. The Bill empowers the Government to exempt an applicant FEI with a reputation or international
standing from all provisions of the Bill, except those relating to non-repatriation of surplus generated in India
and penalties prescribed for violating provisions of the Act.
Penalties have been prescribed for any FEI and any person/ Indian education provider for contravening the
provisions of the law and can range from ` 1 to 5 million.
This is a long awaited legislation which should open another avenue for capacity creation in the system as well
as expose our domestic institutions to foreign competition. The existing policy regime is ambivalent and there
are no regulations governing or enabling entry of a foreign education institution into India. It is, therefore,
encouraging that the Government has finally acknowledged the need for a legislation that provides this clarity.
The provisions of the Bill amply reflect a Government focus on quality, reliability and accountability of FEIs
intending to establish in India, thus addressing major concerns which the opening up of an otherwise tightly
regulated sector may bring up.
It has already raised extensive debate. The primary criticism of the Bill is that it would create elitist
institutions with exorbitant fee structures that will be unaffordable for the Indian masses. There are also
apprehensions of domestic institutions being unable to compete. While it is true that these institutions are likely
to have higher fees, it is equally true that they shall create new quality benchmarks and introduce a culture of
high academic professionalism – thereby raising the bar for delivery of education in India. Access to needy but
the deserving students can be enhanced by making them eligible for scholarships and the Government’s
subsidised student loans.
On the flip side, prima facie, the Bill seems to be biased towards research oriented universities (fast track
mechanism for reputed institutions). It is important to understand that given the huge demand-supply gap, the
bulk of the institutions that are likely to have an interest in India are those whose focus is on teaching and vocational/skill building. In this scenario it would be unrealistic to expect the top-notch universities like Harvard
or Oxford to set up standalone campuses in India and have their autonomy and quality potentially compromised
with all our regulatory constraints. Media reports have indicated that Oxford has no plans for setting up in India,
Yale has merely accepted to act as mentor to the 14 innovation universities proposed by the Government and
Harvard is content with providing executive programs to Indian corporate executives. In this scenario, it is only
the next level of universities that might be interested in India. Many of these have very high standards and
quality of education and accommodate the majority of the Indian students studying abroad. But they have no
fast track mechanism under the Bill and are potentially subject to all the regulatory rigours and restrictions on