The Telegraph
Since 1st March, 1999
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Arjun red-flags FDI in colleges

New Delhi, Nov. 16: Human resource development minister Arjun Singh — like the government’s Left allies — has rejected the commerce ministry’s proposal to get foreign direct investment in higher education.

“Regulation and public policy must precede foreign investment for it to be effective. Hence the opposition to foreign investment at this stage,” the HRD ministry has said in response to a note prepared by the commerce ministry for opening up higher education for negotiation in the General Agreement on Trade in Services (GATS).

A bill to regulate the entry of foreign education providers drawn up by the HRD ministry is at present under the scrutiny of a group of ministers. The cabinet is split down the middle on the bill, with a section arguing for a liberal regime for foreign providers.

But the HRD ministry holds that foreign institutions will be guided by the same rules as national institutions, and will not get preferential treatment.

“While both public and private investments are welcome, it should be nobody’s case that foreign investment is the only way to improve quality,” the HRD ministry says.

The CPM could not agree more. An article in party mouthpiece People’s Democracy, dated October 29, attacks the commerce ministry’s proposals.

“The idea is to create an open global marketplace where services like education can be traded to the highest bidder,” it says.

“The UPA government must abandon its policies of wooing FDI in education and private universities.”

The HRD ministry’s response is unlikely to make Prime Minister Manmohan Singh, who is in favour of foreign investment in higher education, happy, but Arjun will go up several notches in the esteem of his Left colleagues.

“There should neither be any haste in opening the education sector to foreign participation under a multilateral regime without adequate safeguards nor should the education sector be used as a bargaining chip for obtaining gains in other sectors,” his ministry says.

Both the CPM and the HRD ministry have cited the examples of China and Malaysia, where foreign universities are allowed in only by invitation.

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