Are international branch campuses a “zero sum game” for India?

Ram Sharma used his keynote speech at The PIE Live India to question the two financial systems emerging in Indian higher education, with international universities being able to establish for-profit branch campuses as part of the national education policy (NEP) 2020 reforms, while private Indian universities are still classed as not-for-profit.

He called for a level playing field that enables all stakeholders in higher education to benefit from the shared mission of improving access and quality for students in India.

The University Grants Commission (UGC) is in the process of licensing 18 foreign universities to open campuses across the country, with prestigious institutions such as Deakin University and the University of Southampton already teaching students.  

Sharma, currently the chancellor of UPES and founding director of Plaksha University, spoke to the audience about his personal views, lamenting the early-stage impact of these campuses. He said: “We were promised foreign capital to India, expertise or faculty members would come [from overseas], but at least the preliminary indications suggest that this is not the case.”

Private universities in India are classed as not-for-profit and comprise of more than 70% of the country’s higher education sector. However, IBCs often have a 49-51% joint ownership model with private equity companies, meaning they can extract operational profits more readily.

We were promised foreign capital to India, expertise or faculty members would come [from overseas], but at least the preliminary indications suggest that this is not the case
^{_{Ram Sharma, UPES}}

GIFT City centre in Gujarat, which houses five international universities, also operates outside Indian domestic tax and exchange controls, allowing international universities to repatriate 100% of their income through foreign exchange.

“Where is the sense of service?” asked Sharma. “There is no limit to the profiteering that corporates can do at the cost of environment, at the cost of society, at the cost of natural resources, at the cost of emissions and pollutions. Who decides how much profit a corporate should generate? And who decides that academics should be not for profit?”

“Let there be arm’s length clauses for promoters and the executives who are managing and running the institutions,” he added. “Let those equities be distributed amongst faculty and staff members. Why not? Because when the wealth does get generated, why [shouldn’t] professors benefit from it from being part of their journey, building those institutions? If corporate employees do get paid well, if they can make fortunes, why not academics?”

It was disclosed that seven of the nine British universities planning to open in India are working in partnership with private education company Emeritus (otherwise known as Daskalos), while other well-known interlocutors include Navitas, Oxford International, ECA and GEDU.

“Early indications show that this could be a zero sum game for the country” explained Sharma. “We’re not really getting any real capital flowing in yet we need to keep reinvesting in Indian higher education.”

He went on to call for a financial system where academics or even students and parents could be shareholders through scholarship or green bonds, and offered a further suggestion in a similar model UPI created a platform layer for the financial institutions in India where government could create a similar technology layer for academic institutions, reducing costs and freeing up money for research or access.

Sharma also highlighted the inequality in the acquisition of land for IBCs in comparison to Indian private institution. The policy varies from state to state, but private institutions are required to hold a significant piece of land as part of their licencing application to ensure the appropriate level of facilities such as classrooms and student services can be supplied.

However, IBCs are being allowed to set up ‘vertical’ campuses in office building space without a need for a full service campus, or are being supported by government states to create new townships such as the EduCity project as part of the navi Mumbai (new Mumbai) expansion in the state of Maharashtra.

A level playing field would encourage joint research, shared infrastructure, joint startup ventures between Indian universities and IBCs he argued.

India’s joint secretary, Armstrong Pame, speaking on government policy, later responded: “I heard Mr Ram speaking, I observed everything and it is not easy to answer everything that people want to say, but nonetheless I think the government of India has taken big strides to be its own master, and the NEP is focused not only on rote learning, but also on innovation.”

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