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BW Businessworld

'Disband UGC And Let Private Standard Setting Bodies Come Up'

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Indian institutes should recognise and award talented students and faculty, just like private companies here, wherein merit alone is rewarded. Indians should realise that nothing but merit wins, says S.P. Kothari, Deputy Dean and Gordon Y Billard Professor of Accounting and Finance at the MIT Sloan School of Management, based in Cambridge, Massachusetts in a freewheeling conversation with Rozelle Laha of BW|Businessworld.

How can India reform its higher education to be able to attract global investors?
India needs to decentralise its education system. Foreign direct investment (FDI) in education requires a willingness to welcome it. If India wants to attract FDI in education, it needs to relax two norms - Insistence on having local partners and the need to comply with University Grants Commission (UGC) norms.

The UGC norms are not quality enhancing and is perceived as restricting academic innovation and academic freedom that exists in foreign academic institutions. UGC is draconian for domestic institutes like the Indian Institutes of Management (IIMs) as well. For example, it restricts IIMs from officially terming their degree as MBA, even though the whole world recognises it as an MBA degree. UGC is unreasonable in some respects; it is not agile in allowing innovations to be incorporated. Despite UGC, unfit people are still surviving in India. I certainly think there should be far greater autonomy and the market should be allowed to decide and rate the programmes. Best reform would be to disband UGC and let private standard setting bodies in education to come up. That might be too radical as a solution, but that’s a sense in which it might have overstayed its welcome.

Could you please throw some light on the freedom that exists in foreign institutions?
In the US, even without AACSB recognition you can offer an MBA degree. At MIT, we recently started offering MBA in Finance. Internally, we decided that we want to start a new programme and we started it, without having to worry about any state, local or federal approval or necessary accreditations. That is the kind of freedom we have there.

As a foreign operator, what according to you are the challenges in private equity investments in education in India?
A foreign operator doesn’t feel that it has the freedom to offer the curriculum the way it tends to offer in the UK, US, or Australia. They are reluctant therefore to come and set up. Profit is not a motive but the desire to have brands that is there worldwide. Most institutes abroad are philanthropic. When I say freedom, I am talking of the ability to offer a range of degree programs and decide the apt curriculum that fits in with no approval from anybody. Also, let the institutes decide the kind of student body to be admitted in that program. Let institutes independently decide the tuition fee and salary of faculty members. There can be some general rules about faculty recruitment, but there shouldn’t be any restrictions on what salaries an institute offers to them based on the broad range of distinguishing factors.

Which countries in East Asia are attractive to foreign operators and why?
If we judge the countries in this region based on outcomes, China, Korea and Taiwan are doing extremely well in attracting investors. China, despite all challenges, attracted lots of investors. If they relax norms, they’ll attract more. Indians say they have streamlined the process, but others don’t perceive it to be streamlined as they are not investing. The proof is that if they invest, you’ve streamlined enough.

What can India learn from their foreign counterparts in their endeavour to enrich faculty quality?
We are enriching faculty quality in a number of ways. Talking about career advancement, we get schools bidding for our faculty and us bidding for theirs. That’s the kind of competition. India needs to decentralise faculty recruitments in the first place. For instance, at MIT, faculty members of a particular department have the authority to decide if they want to hire more members in the department and accordingly the offer is made. For promotion of faculty members, we consider recommendations through an internal oversight followed by external oversight. And, if the two oversights mismatch time and again, we will catch the group and fire them. Even the groups are aware that they are monitored and hence cannot recommend bad people. Apart from these, we are constantly mentoring junior faculty members and training them during their PhD programs too. It is an open environment non-hierachical environment there, which breathes openness and let everyone ask questions.

How can Indian universities invest better on research?
India has a collection of tiny schools and they are all independent. Some of them subscribe to one state university that governs them with a single exam and curriculum rules, which doesn’t give those individual institutes any scale. If one institute teaches a particular course, it should have the full authority to set the exam for it and evaluate.

Education system in India is too fragmented. If you see, University of Michigan has 40,000 students, University of Iowa has 32,000, Harvard has 16,000 to 18,000 students and MIT itself has 10,000 students on campus. That large number of students on campus gives you some scale and ability to offer a range of programmes as well as ability to invest in research. But, I find this lacking here.