The Telegraph
Since 1st March, 1999
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FDI kept out of primary schools

New Delhi, Oct. 21: The human resources development ministry has said it is not ready to open up the education sector to 100 per cent foreign direct investment (FDI).

“Being part of the WTO does not mean automatically opening up the education sector to 100 per cent FDI,” says Sumit Bose, an official in the ministry which has set up an internal committee to examine the issue.

HRD minister Murli Manohar Joshi had at a press conference last week ruled out opening up the elementary education sector to FDI. “The state cannot retreat from its responsibility,” he had said. “Nowhere in the world has there been an automatic opening up of the education sector,” says Bose.

Recently, the Foreign Investment Promotion Board under the industry ministry refused to allow Eggmont International, a foreign company, to make direct investments in the elementary education sector. The company wanted to set up nursery and play schools.

For years, the Indian government kept the service sector out of the purview of the WTO agreement. But at the Doha summit, the government agreed to discuss the issue — a reason why the HRD ministry decided to set up a committee. “We are discussing the issue. In a sector like education, nothing can be automatic,” an official said.

For once, the government and the voluntary groups seem to agree. Sanjeev Kaura of the National Alliance for the Fundamental Right to Education, which runs a chain of over 2,000 voluntary organisations, says: “In no country the world over (including the UK and US) has the mantle of providing basic education been donned by the private sector. A cursory look at the details proves the invalidity of the option.”

Kaura counters opinion that FDI should be allowed in the elementary education sector only if the companies agree to invest not just in urban areas but also in villages. “As a former CEO of an MNC abroad, I am convinced that even if FDI is directed in rural areas, bottomline pressures will prevent it from reaching areas where most of the 70-100 million children out of school live — that is in habitations and hamlets, not big villages and towns,” he points out.

The industrial captains are also lending their voice to the anti-investment chorus. Both the CII and Ficci believe the policy will not work in the elementary education sector. University Grants Commission chairperson Arun Nigavekar says: “The government will very soon have to contend with opening up the higher education sector. It will have to think of strategies to face the challenge.”

He believes the universities need to diversify their curriculum to compete with foreign counterparts once they start setting up branches in India. What the Indian government is insisting on is that the policy has to be reciprocal. Indian universities should also be allowed to set up branches abroad. This would also mean movement of their personnel.

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