The Hindu : FICCI calls for cautious approach to liberalisation in education services

Online edition of India's National Newspaper
Saturday, Jul 05, 2003

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FICCI calls for cautious approach to liberalisation in education services

By Our Special Correspondent

NEW DELHI JULY 4. The Federation of Indian Chambers of Commerce and Industry (FICCI) has called for an `extremely cautious' approach towards liberalisation in education services under the GATS-framework of the World Trade Organisation (WTO). In view of the sensitivities involved and since it is unlikely to result in any significant gains at least in the medium-term, the chamber has emphasised the need for treading carefully in the ongoing negotiations in services in the WTO.

It has pointed out that India is a net importer of education services while developed countries such as the U.S., Australia, Canada and New Zealand, which are net exporters, have a distinct comparative advantage in this area. The chamber feels such countries would benefit the most from further liberalisation, rather than this country.

In a note released here today, FICCI has observed that despite such advantages, these developed countries have been rather cautious in making commitments for opening up the education sector to foreign investment under WTO. For instance, even though the U.S. can be described as a "developed and matured market" for such services, in its current offer on services it has not made any commitments for foreign investment in the primary, secondary and higher education services. On the other hand, Australia has made commitments only for the private sector in education services.

Explaining the scenario on such negotiations, the chamber says that education services under WTO include primary, secondary, higher, adult and other education services. Trade in educational services takes place mainly through students travelling abroad for studying. However, changes and developments in information and communication technology have made possible the supply of education services through Internet and satellite, and this mode of supply is fast gaining widespread acceptance.

In addition, it pointed out that recently trade in education services has started taking place increasingly through commercial presence of schools and universities in other countries. According to FICCI, making commitments under WTO may lead consequently to change in the basic approach of the country's education policy, that is, non-commercialisation of the education system. At present, if a domestic private un-aided school in India wants an affiliation from the CBSE then it has to operate on non-commercial basis. Around 50 per cent of schools affiliated to CBSE fall under such category. Similarly, in the case of higher education, the All India Council of Technical Education (AICTE) has identified some broad principles for regulating the fees in various private colleges.

The chamber says "the bedrock of such a policy is to avoid commercialisation and profit-making while simultaneously maintaining the standards and upkeep of facilities and assets".

Against this, it feels that any foreign education service supplier would come to India for commercial purpose. As long as there are laws restricting domestic educational institutions from operating on commercial lines, it argues that it would be unadvisable to make any binding commitment in WTO for the entry of foreign service suppliers operating on commercial lines. Besides, the chamber is of the view that foreign suppliers of education service are likely to offer only those subjects or courses that are marketable among both students and companies. This again would put most domestic educational institutions, which have to maintain the full range of traditional academic subjects besides those offered by foreign universities, on unequal footing, it is maintained.

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