Entry of Foreign Educational Institutions in India
The much awaited Foreign Educational Institutions Bill 2010 was finally introduced in the Lok Sabha on May 03, 2010. The Bill is aimed at regulating the entry and operation of foreign institutions which are imparting, or intend to impart, higher education in India. It will also permit foreign education providers to set up campuses in the country and offer degrees. The same could potentially save the country billions of dollars by way of foreign exchange outgo. The time is not far when Indian students would have access to education from top universities and world class degrees without having to leave the country. It is expected that the entry of foreign law firms would increase healthy competition, improve standards of education and open up more seats in higher education.
Essential aspects of the bill
(A) As per the intended law, every foreign educational institution intending to operate in India has to be notified as a foreign educational provider by the Central Government. The same would be done on the recommendation of the Registrar (Secretary of the University Grants Commission) in the prescribed manner. The application would also be required to be endorsed by the High Commission of that country in India. For foreign institutions already existing in India would be required to apply for notification apply within six months of the Act coming into force.
(B) As per the Bill, a “foreign educational institution” means an institution established or incorporated outside India which has been offering educational services for at least twenty (20) years in the country in which it had been established or incorporated. Further, the said institution offers educational services in India or proposes to offer courses leading to the award of degree or diploma or certificate or any other award through conventional method including classroom teaching method. It may be noted that the definition of foreign educational institution does not include institutions engaged in the educational sector providing services through distant mode in India independently or in collaboration, partnership or in a twinning arrangement with any educational institution situated in India.
(C) The course or programme of study offered by the notified foreign educational institutions has to conform to standards laid down by the relevant statutory authority (such as UGC, AICTE, BCI, MCI). Further, the said institutions have to ensure that the course or study programme is of the quality comparable to that offered by it to students enrolled in its main campus in the country in which such institution is established or incorporated.
(D) Every foreign educational institution would be required to publish a prospectus sixty (60) days prior to admission which shall include information about fees, deposits and other charges, percentage of fees refundable to students, approved number of seats, conditions of eligibility, and details of teaching faculty.
(E) The Bill provides for withdrawal of recognition in case a foreign educational provider violates any provision of the prescribed regulations.
(F) Every foreign educational institution would be required to maintain a corpus fund of a minimum of Rs 50 crore or any other amount as may be notified by the Central Government. The foreign education providers shall, out of the income received from the corpus fund, utilize not more than seventy-five per cent of such income for the purposes of development of its institution in India and the remaining of such unutilized income shall be deposited back into the corpus fund. It may be noted that the revenue generated cannot be invested for any purpose other than growth and development of the educational institution in India. The central government may exempt any institution from conforming to the requirements of the Bill except the penalty provision and the revenue provision.
(G) Any person who offers admission to an unrecognized institution or makes misleading advertisement shall be liable to a minimum fine of Rs 10 lakh (upto Rs 50 lakh) in addition to refunding the fees collected. Any recognized foreign educational provider who violates the law shall be liable to a fine between Rs 10 and 50 lakh and forfeiture of the corpus fund.
(H) The Bill also lays down norms for foreign educational institutions conducting certificate courses.
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About the Author
This Article is by Akshay Nanda. Akshay is a corporate lawyer in India and partner in one of the leading law firms in India advising foreign and domestic clients on various corporate and commercial laws.
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