Globalisation of Higher Education and the Role of the Government

By B. Bhattyacharya1, Distinguished Professor and Director,

Institute for Integrated Learning in Management (IILM), New Delhi

1. Role of Higher Education

It is well known that education and health play an important role in boosting economic
growth and development. If people are adequately educated and healthy, they can
participate and contribute more in development process. Education, more particularly
higher education, can help in increasing efficiency, productivity and international
competitiveness of an economy.

With a sustained growth rate of 8 per cent and above of the Indian economy in the recent
past, there will be demand explosion for skilled manpower, especially in those sectors
which can be called ‘sunrise’. Some of these are in the category of service industries and
are mostly dependent for further growth on the competitive availability of the required
skills, upgraded educational level and a global mindset. If the labour markets for these
industries are not oriented towards meeting these evolving requirements, there will not be
a growth in the skilled manpower. There will be upward pressures on the wage rates,
which, in turn, will adversely impact the major source of India’s global competitiveness.

India has done considerable progress in the sphere of higher education. The number of
engineering graduates in India is 350,000 annually, compared to 70,000 engineering
graduates in the United States, and 100,000 engineering graduates in Europe. India also
produces 60,000 MBAs every year. Engineering colleges in the country have been
growing at 20 percent a year, while business schools have grown at 60 per cent annually -
with 348 universities and over 17,973 colleges spread across the country. In the year
2005, more than 2.5 million graduates were added, that included 25,000 doctors and
600,000 science graduates and postgraduates.
1
This paper expresses personal views of the author and should not be attributed to the views of
the organizations he is currently associated with. The author would like to thank Dr. Tarun Das,
Professor and Head (Economics Area), IILM, for his help in preparing the paper.

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But this progress is not enough if we desire to sustain high growth rate exceeding 8 per
cent per annum and to maintain our competitive advantage in the global economy. Let me
mention some particular reasons for the need for expanding higher education at a faster
speed than what had been recorded in the past.

(a) Role of IT and knowledge

No longer capital, cheap labour and natural resources are regarded as the main sources of
global competitive advantage. Knowledge and information technology (IT) have emerged
as the principal drivers of growth and comparative advantage. Higher education helps to
achieve this excellence in IT and other knowledge based industries.

In recent years, India has made significant growth in R&D, IT and IT-enabled (IT-ITES)
services and offshoring activities leading to explosive growth in knowledge-based
industries. Many foreign affiliates have been established in automobiles, food processing,
electronics, IT, transport, communications and financial services. Outsourcing has
increased in IT, distribution, contact centres, back offices, R&D and manufacturing.

India emerged as the 18th largest service exporter and increased its share in world service
exports three times from 0.6% in 1990-91 to 1.8% in 2005-06. These exports were led by
rapid rise of business, professional, and software services.

Indian software exports increased from only $0.7 billion in 1995 to $23.6 billion in 2005-
06 and accounted for 27% of total services exports. Globally, India ranks Second only to
Ireland in software and IT exports (RBI 2006).

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 (b) Role of offshoring

Countries like India, Brazil, China, Dominica, Israel, Philippines, Rumania, Russian
Federation have witnessed a surge of Business Process Outsourcing catering to the needs
of developed countries. FDI from developed countries in the BPO sectors of these
countries are also growing.

India has emerged as a major player in IT-ITES and outsourcing hub due to high quality,
skilled manpower, and low operations cost. Indian ITES-BPO exports recorded a growth
of 33% in 2005-06 on top of 45% in 2004-05 driven by increased offshoring by firms
from US and Europe (RBI 2006).

According to a recent study by McKinsey and NASSCOM (also reported in the

Discussion Paper of the Department of Commerce), the total potential global offshoring
market is around US$ 300 billion, of which US$ 110 billion will be offshored by 2010.
India can capture about 50% of this market and create direct employment for 2.3 million
people and indirect employment for 6.5 million people. However, high quality manpower
would be required for such jobs. Various professional and industry associations hold the
opinion that significant expansion in higher education is required to meet the growing
demand for technical and management personnel in future.

(c) The unfolding demographic transition

At present, India is undergoing a favourable demographic transition. According to the

population projections made by the United Nations, rapidly falling fertility rates in most
developing countries have led to a "youth bulge". Another recent study by Emmanuel Y.
Jimenez and Mamta Murthi (2006) of the International Monetary Fund (IMF) indicates
that “In many middle-income countries and transition economies, the fertility transition is
fairly advanced and the number of young people is actually declining (as in China and
Thailand). In others, which are not as far along (for example, Brazil and Vietnam),

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numbers are currently swelling to a peak or a long plateau. In still others, which are even
less advanced in this transition (as in India and the Philippines), the peak will be
experienced in the next one to two decades. In yet others (as in Niger and Sierra Leone),
the numbers are expected to grow continuously into the foreseeable future.”

The study further indicates that even many middle-income countries, where young people
are adequately educated, face challenges to meet the demand for workers with higher
skills in the global economy with expansion of investment, output and trade.

The share of those of working age in the total population will rise in India till 2025,
whereas in much of Asia it will peak around 2010. The UN puts the population’s median
age at around 24.3 years in India, compared to 32.6 in China and 35.1 in Korea. At
present, more than 50% of India’s population is under 25.

Population of Europe, Japan and Australia is already aged. Population of China, Hong
Kong, Russian Federation, and Singapore is aging very rapidly. Population of India,
Bangladesh, Indonesia, Pakistan, and Malaysia is still young and growing slowly.

India, Bangladesh, Pakistan, Sri Lanka, Thailand, Indonesia and Viet Nam serve as a pool
of migrant workers to labour shortage countries. The number of migrant workers from
these countries to other countries in Asia has increased from 1 million in 1990 to 5.5
million in 2004.

Over the next 15 years, the rich world’s population will fall slightly, while the developing
world will acquire 2 billion extra people. The changing demographics over the next 15
years show that, in the working population defined as persons in the age group 15 – 59,
US will have a shortfall of 17 million, Japan 9 million, Europe 10 million (UK 2 mn,
France 3 mn, Germany 3 mn and Italy 2 mn), Russia 6 million and China 10 million. In
2020, India will face a surplus of 47 million, almost equal to the total world shortage.

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Thus increasing labour force could be an impetus to higher growth in large developing
countries such as India and Indonesia. There will be more “consumption dividend” than
in the ageing economies such as Japan. Higher return to capital in young economies
could attract FDI and other foreign capital. There will be increasing opportunities to
export labour to rapidly ageing economies, and more opportunities and acceleration in
offshoring in services and manufacturing. In order to reap these demographic dividends,
we should expand our higher education at a faster speed than that in the past.

2. Status of Higher Education in India

There has been an impressive growth in the area of university and higher education.
Accreditation of all Universities and Colleges has been made mandatory. The University
Grants Commission (UGC) guidelines for grant of Deemed University status have been
revised and simplified to provide for grant of provisional status of Deemed University to
de-novo institutions as well in the emerging areas and for opening of centers of Deemed
Universities anywhere in India and abroad. Student enrolment in conventional system of
higher education rose from 4.4 million in 1990-91 to 10.5 million in 2005-06. Enrolment
of women students also rose significantly and today constitutes more than 40 per cent of
the total enrolment. There has been a significant increase in the students’ enrolment
under Open and Distance Education System, which has helped diversification of courses
focusing needs of women, rural sector and professional training of in-service personnel.

However, as per NSSO survey (55th Round 1999-00), there were inequalities in enrolment
in higher education across various social groups in rural and urban areas, and also in
terms of Gender. Females belonging to Scheduled Castes and Scheduled Tribes living in
rural areas are the most disadvantaged. A Constitution Amendment Bill has been passed
by Parliament in December, 2005, which enables the State to make special provisions, by
law, for admission of students belonging to Scheduled Castes, Scheduled Tribes and
socially and educationally backward classes to educational institutions, including aided
and unaided private educational institutions, except minority institutions referred to in
Article 30(1) of the Constitution. This would facilitate educational advancement of the
above disadvantaged groups.

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Technical and professional education in the country has played a significant role in
economic and technical development by producing quality manpower. There are at
present 1,265 approved engineering colleges at the degree level. Apart from this, 1,034
institutes impart courses on Master of Computer Application (MCA). There are 958
approved Management Institutes imparting MBA courses. All India Council for
Technical Education (AICTE) has delegated the powers of approval of diploma level
technical institutes to the State Governments. Strong linkages have been developed
between technical institutions and the industry. For strengthening technical education and
improving the quality of polytechnic pass-outs, various steps have been taken through
technician education development programs.

3. Financing Higher Education

Para 11.4 of NPE 1986 states that “the investment on education be gradually reached to
6% of National Income”. As against this target, the combined total expenditure on
education by Centre and States was only 2.8% of GDP in 2005-06 (BE), and that on
higher education constituted only 0.7 per cent of GDP.

The Tenth 5-Year Plan (2002-07) attached a high priority to education by increasing
allocation by 76% to Rs. 43, 825 crore from Rs. 24, 908 crore in the Ninth Plan. The total
Central plan allocation on education has been raised by 31.5% from Rs. 18, 336 crore in
2005-06 (RE) to Rs. 24,115 crore in the current year’s budget (2006-07). However,
expenditure allotted for Secondary & Higher Education at Rs. 6,982 crore constituted
only 29% of total expenditure on education. Different states also spend insignificant
shares of their revenue expenditure on higher education (Table-4).

It is a matter of concern that the share of education expenditure in total expenditure of the
general government (combined Centre and States) has shown a declining trend since
1990-91 after reaching a peak level at 11.3 per cent in 2000-01 (Table-1), although the

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share of education in social services expenditure has shown a marginal increase from 22
per cent in 1990-91 to 23 per cent in 2005-06.

Table-1: Expenditure on Education and other Social Services by the General

government (combined Centre and States)

As % of the total expenditure

Composition of expenditure on
social services (in percentage)
Years 1990-91 2000-01 2005-06 1990-91 2000-01 2005-06
Social Services 20.3 22.1 20.9 51.4 50.9 48.5
Education 10.4 11.3 10.1 22.0 21.2 23.0
Health 4.5 4.7 4.9 26.6 27.9 28.5
Others 5.4 6.2 5.9 100 100 100
Source: Economic Survey 2005-06 and Union Budget 2006-07, Ministry of Finance.

Table-2: Trends of Education Expenditure by the General Government (Combined

Centre and States) as percentage of total expenditure and GNP

Year Education Expenditure as Education Expenditure as

percentage of Total Expenditure percentage of GNP
1951-52 7.9 0.8
1985-86 8.6 2.8
1990-91 10.4 3.0
1995-96 10.7 2.8
2000-01 11.3 3.2
2004-05 RE 9.9 2.8
2005-06 BE 10.1 2.8
Source: Various Public Finance Albums, Ministry of Finance.

Table-3: Education Expenditure by the General Government (Combined Centre

and States) as percentage of development expenditure, total expenditure
And total revenue in 2004-05
As % of As % of As % of
Development Exp. Total expenditure Total Revenue
Centre and States 25 9 16
Centre 8 3 4
States 30 14 22
Source: RBI Annual Report 2004-05

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 Table-4: Education Expenditure as a percentage of
Revenue expenditure in different states
States Primary Secondary Higher Total
Education Education Education
Andhra Prad. 10.9 7.5 2.8 21.2
Assam 14.0 6.5 2.1 22.6
Bihar 13.6 3.8 2.1 19.5
Gujarat 21.2 6.8 1.7 29.7
Haryana 6.0 4.3 1.7 21.1
Karnataka 17.0 8.9 2.2 28.1
Kerala 9.3 6.1 2.3 17.7
M.P 10.2 3.4 1.9 15.5
Maharashtra 16.7 8.0 1.7 26.4
Orissa 10.8 5.1 3.2 19.1
Punjab 4.0 7.1 1.7 12.8
Rajasthan 18.9 7.8 1.6 28.3
Tamil Nadu 8.4 6.6 1.7 16.7
Uttar Pradesh 9.6 4.7 1.3 15.6
West Bengal 6.4 9.6 2.5 18.5
Source: State Finances 2005, RBI

Financing of higher education is a critical issue. The fee structure in the universities is
abysmally low and has remained static for more than three decades. The universities
should, therefore, make efforts to rationalize the fees and attempt greater generation of
internal resources. The extent to which universities can hike fees needs to be studied,
including avenues for receipt of contributions, donations, gifts, and sponsorships from the
alumni, trusts, private sector and industries. However, utmost care needs to be taken to
ensure that the social obligation- ensuring that the poorer students are given adequate
opportunity to pursue higher education – is not lost sight of.

Sources of funds financing educational institutes in India are not easily available. In the
past, the annual pre-budget Economic Survey presented to the Parliament by the Ministry
of Finance used to provide such information in the chapter on Social Sectors. Such
information given in the Economic Survey 1995-96 is summarized in Table-5. No such
information is available in the subsequent Economic Surveys. It may be observed from
the table that over the years grants by the Centre and State governments have increased
significantly, those of local bodies and community funds have declined. Students’ fees
used to finance about one fifth of total education expenditure in 1950-51, but today fees

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finance only 2.6 per cent of expenditures of educational institutes. It is understood that
fees are not even sufficient to pay for teachers’ salaries. Such a system cannot be
sustainable in the medium and long term.

Table-5: Sources of Funds Financing Educational Institutes in India (in percentage)

Year 1950-51 1970-71 1980-81 1990-91 1992-93

(1) Centre/States’ grants 57.1 75,7 81.7 87.9 89.5
(2) Local bodies’ grants 10.9 4.3 4.7 8.2 5.0
(3) University’s own funds 0.0 1.4 1.4 0.0 0.0
(4) Sub-Total (1+2+3) 68.0 81.4 87.8 93.4 94.5
(5) Fees 20.4 12.8 8.2 3.6 2.9
(6) Community funds 11.6 5.8 4.0 3.0 2.6
(7) Total (4+5+6) 100 100 100 100 100
Source: Economic Survey 1995-96, Ministry of Finance.

However, in a recent paper, Tilak (2001) has observed that fees as a proportion of the
recurrent costs of higher education in developing countries like India are reasonably high
and range between 15 to 20 per cent. Even in countries like USA, tuition fees meet only
15 per cent of the recurrent expenditure in public institutes. Only in South Korea and
Chile, the proportion is higher at 50 and 39 per cent respectively.

The IMF study (2006) also indicates that higher education is very expensive in most of
the countries. For the private university students in Argentina, Brazil, Chile and
Colombia, out-of-pocket costs range from 30 to 100 percent of per capita GDP. Even for
students in free public universities, the opportunity costs are substantial. Credit schemes
for poor students could not function without government support, and many such
schemes have failed because of low repayment rates. Australia's system makes repayment
contingent on graduates' incomes, as tracked in tax records. Middle-income countries like
Thailand are attempting such schemes, which are worth monitoring and evaluating.

In order to tackle these problems, developing countries like India are encouraging
commercial banks to provide education loans. The policy mechanisms for innovation,
such as increasing R&D funding, providing greater support to the Universities are being
replicated elsewhere. Indian companies now deduct 150% of the amount spent on R&D

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from their taxable income. A collective Public-Private Partnership called the ‘New
Millennium Indian Technology Leadership Initiative’ - consisting of academicians,
industry and financial institutions - has been launched to secure a leadership position in
niche areas. We have to reinforce these areas more, not less.
Financing of higher education is a critical issue. The fee structure in the universities is
abysmally low and has remained static for more than three decades. On considering that
government has limited resources and they have to meet the financial needs of other
competing sectors, it is recommended that:
(a) The universities and other higher educational institutes should make efforts to
rationalize the fees and attempt greater generation of internal resources. The extent
to which universities can hike fees needs to be studied, including avenues for
receipt of contributions, donations, gifts, and sponsorships from the alumni, trusts,
private sector and industries. However, utmost care needs to be taken to ensure that
the social obligation- ensuring that the poorer students are given adequate
opportunity to pursue higher education – is not lost sight of.
(b) Govt may focus on basic literacy, primary and secondary education and leave
higher and professional education to private sector.
(c) An Education Development Fund with private donation exempted from income tax
may be created for financing higher education.
(d) Government
(e) May progressively reduce the funding for Universities and make them self-
financing. A credit market for private financing of education may be developed for
this purpose.
(f) Government should allow foreign investment in higher education particularly for
IT, S&T, medical and management.
(g) Government should create enabling environment, which attracts foreign students to
join Indian Universities.
(h) Government may formulate rules and regulations for entry of foreign universities
and foreign investment in higher education, but minimize direct interventions. We
know that the sectors, which are subject to least interferences by the government,

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 such as IT and telecom, are growing at a faster rate with better delivery and quality
and cheaper prices than other sectors.
4. Role of Private Education Providers

It is well recognized that due to limited public resources, public sector will not be able to
meet the growing demand for higher education, and government needs to
encourage expansion and growth of private education providers. To effectively
address the supply side scenario in this context, it is necessary to have an
enabling policy environment for the private education sector to play an effective
role. These players are more receptive to market signals and have a proactive
attitude to come out with products and services which can meet the evolving
demands and competencies of industries in rapidly changing domestic and
global business environment. One reason behind this attitude of the private
players is their strong industry linkages, apart from the market driven necessity
of satisfying the multiple stakeholders for sustained growth and profitability.

The current policy framework does not allow the private players to launch new programs
unless it is approved the AICTE. This effectively works as an entry barrier, which has
broad macroeconomic impact. If proposed new programs are in response to felt and
emerging of the industry and the regulatory process delays the availability of such
educational products in the market, there is bound to be mis-match between supply and
demand. Under the current policy framework, Supreme Court has given a waiver from
this conditionality to the universities and the deemed universities. Without any possible
threat to the quality of programs, such a waiver can conceivably be granted to some
autonomous institutes which satisfy a pre-determined set of criteria, such as years of
operations, physical infrastructure, record of placement etc. The government in
consultation with various stakeholders and the regulatory agencies can lay down the
criteria which, if satisfied, will equate a private player with the currently exempted
categories with respect to launch of new programs.

The current system of regulating the management education focuses more on minimum
requirements and less with excellence of education. An AICTE recognition is essentially

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a certification as to the observance of the minimum requirements as laid in the guidelines.
However, there is no way to differentiate between industries, which fulfill the
requirements, and those, which are above.

While the AITCE’s current mechanisms and its concern with transparency are laudable, it
is felt that there has to be some other system to address the above issue. A peer group
body, set up and managed by the institutes themselves, with representatives from various
stakeholders and the government, should take up the responsibity to put in place an
accreditation system, which will rank the institutes according to their level and
competencies. A plethora of ranking exercises by several media bodies is available in this
field because there is in fact a need for such information. However, multiplicity of such
exercises, quite often with inadequate and non-transparent methodologies, is causing
confusion. Of course, this is not unique to India. A strong debate on such ranking
exercises is currently on, both in Europe and USA. It is, therefore, an appropriate time to
visit this issue and work out a solution.

5. Internationalizing Higher Education

Over the last couple of decades, closer integration of the world economy has resulted in
progressively unrestricted movement of goods and services across the world. The
emergence of a multilateral rule-based trading system under the aegis of the World Trade
Organisation (WTO) has been instrumental in hastening the withdrawal of barriers to
international movement of goods and services. The rules set by the WTO, however, have
also generated controversy in terms of their differential impact upon developed and
developing nations. Various aspects of the General Agreement on Trade in Services
(GATS), which governs trade in services between nations, have been extensively
debated. Among these aspects, issues relating to trade in educational services have
attracted considerable attention.

(a) Higher Education and GATS

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Controversies over trade in educational services under the purview of the GATS have
been closely linked to the contrasting ideological positions emphasising upon the relative
importance of the state in providing education. A section of opinion-makers have pointed
out that the nature, objective, content, and method of imparting higher education, should
primarily rest with the state. Commercialisation of higher education, which, according to
the former, is an inevitable outcome of accepting GATS, is likely to make higher
education incapable of achieving the larger goals of social and human development in
developing nations. This, in many ways, is an extreme position, which fails to take note
of the resource constraints faced by the state in poor countries. In India, for example,
public resources are not enough for meeting the demands of higher education. It is
essential to include private initiative for enlarging educational facilities and strengthening
educational infrastructure, wherever possible. Like in many other sectors pertaining to
physical and social infrastructure, it is also imperative to explore the possibilities of
forging effective public-private partnerships in enhancing the scope of higher education.

(b) FDI and higher education

The issue of involving private initiative in education brings us to the crucial issue of the
role of FDI in education. There are two main issues in this regard. On one hand, we can
hardly dispute the importance of making available quality educational facilities to the
people of the country. Given the rapid pace of global integration and the gradual
emergence of global labour markets in different activities, it is important to provide
residents access to higher education of global quality. It is important to recognise in this
context that in today’s world, efforts to promote ‘indigenous’ or ‘national’ brand of
education can be completely counterproductive, given the close linkages between global
businesses, cultures, skills and commercial requirements. FDI in higher education can be
instrumental in providing access to quality inputs and best-practice systems.

Notwithstanding the benefits of FDI, no welfare state can overlook the possibility of
high-quality education remaining beyond the means of many deserving students given the
price it commands. In order to minimise the possibilities of market failure in this regard,
it is particularly important for a country like India, which has an established tradition of

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learning coupled with an intrinsically bright population, to put in place effective
regulatory mechanisms for higher education. An ideal regulatory mechanism should not
discriminate between educational service providers on the grounds of country of origin
(i.e. national treatment), but should strive to make quality education affordable for the
larger sections of the society.

The HRD Ministry is presently drafting the Foreign Education Provisions (Regulatory)
Bill. According to the Media reports, the Bill has been drafted reflecting the stringent
regulatory recommendations made by the CNR Rao Committee and the AICTE views
favouring a restrictive approach to the entry of foreign universities in India.

The Ministry of Commerce and Industry has circulated a “Consultation Paper on Higher
Education in India and GATS” in September 2006 (MOC 2006). The broad thrust of the
paper is in favour of liberalisation of higher education system in India, keeping in view
the prospects of Indian educational services exports as well as to mitigate the drain of
resources on account of an increasing number of Indian students going abroad for
pursuing higher studies.

There are also media speculation to the effect that the HRD Ministry may bring another
Bill for implementing 27 per cent OBC Quota in unaided private educational institutes.
There is a possibility that foreign education service providers may also be subject to
identical provisions. This will be another entry barrier.

It is necessary to work out a position, which will try to make a balance between such
opposing viewpoints; keeping in view the long term developmental needs as well as
societal compulsions.

(c) GATS and higher education: An optimal strategy

Negotiations on GATS are proceeding on the basis of a Request-Offer (R&O) approach.

Educational services are also being reviewed accordingly. Initial assessments indicate
that considerable market potential exists in India for services traded under Mode-1 (i.e.

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cross-border supply). UGC visualizes a greater internationalisation of Indian education in
order to help Indian Universities generate more resources and to make Indian education a
viable exportable service (Bhattyacharya 2006). UGC plans to help Indian Universities to
set up campuses abroad. Distance education and e-learning are becomingly increasingly
popular. Given the deep penetration of IT in the Indian society, providing greater market
access to developed nations for exporting educational services to India under Mode-1,
can construe highly gainful outcomes in the medium and long-term.

As far as Mode-2 (consumption abroad) and Mode-4 (movement of natural persons) are
concerned, India is already heavily active in trading education under these modes. Indians
comprise significant segments of student populations in the most developed country
universities and educational institutes. Similarly, Indian educational centres are also
hosting considerable number of foreign students in different disciplines. Regarding
Mode-4, again, the contributions made by the Indian scholars and professionals in
enriching the quality of education in various developed countries are well recognised. We
should try to get greater market access to the developed nations in higher education.
However, as in the case of many other professional services (e.g. medical, legal,
accountancy etc.), developed countries are unlikely to be generous in this regard, given
the impact of such access on the employment prospects of their local job seekers.

An optimal strategy for India, therefore, will be to offer greater market access to
developed countries in Mode-3 (commercial presence through FDI), in exchange of
greater access to developed country domestic markets through Mode-4. As mentioned
earlier, establishment of foreign subsidiaries through Mode-3 is unlikely to result in
market failures and distortion of benefits, in the presence of effective domestic rules and
regulations.

6. Concluding Observations

India’s economic management has undergone radical changes since 1991. Economic
reforms have succeeded in identifying and establishing new areas of international
comparative advantages for the country. The service sector is the biggest example.

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Market-friendly economic policies encouraging promotion of quality, efficiency and
adherence to best-practice systems, have helped India in emerging as a key global player
in production and trade of several value-added services.

India has enormous potential to emerge as a pioneer in providing educational services of

international quality. It is already doing so in various disciplines. Taking advantage of
benefits of globalisation through the GATS can help the country in achieving two critical
objectives. On the one hand, it can strengthen its comparative advantages by gaining
access to global best practice systems in education. On the other, it can overcome its
difficulties in making available quality higher education to its residents, by involving
foreign private initiatives in domestic higher education. This, of course, presupposes
creation of an effective regulatory system for higher education in the country, which will
ensure the objectives of both efficiency and equity.

India's main interest and focus area in WTO negotiations on GATS should be to provide
effective market access to its professionals and skilled labour force and bring about
symmetry in the movement of capital and labour. The availability of market access alone
would not be fruitful if the qualifications to provide these services from Indian
Institutions are not recognized abroad. At the time of GATS negotiations, it needs to be
ensured that standardization of these qualifications is sorted out to protect our interest.
Moreover, social obligations in the case of services such as education (equity for the
vulnerable and less privileged sections), telecommunications and banking (serving rural
areas) and air transport (linking the northeast states and other far-flung areas) have to be
carefully nurtured.

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 Selected References

Agrawal, Pawan (2006) Higher Education in India: The Need for Change”, Indian
Council for Research in International Economic Relations (ICRIER) Working Paper,
June 2006.

Bhattacharya, B. (2006) Exporting Education, the Edge, The house Magazine of the
Institute of Integrated Learning in Management, New Delhi, Vol.III, No.3, July 2006.

Bijlani, Subash (2005) Global Shift - Challenges to US Competitiveness, UMUC /

Thursday, October 27, 2005

Department of Commerce, Government of India (2006) “Consultation Paper on Higher

Education in India and GATS: An Opportunity in Preparation for the On-going
Negotiations at the WTO”, September 2006.

Emmanuel Y. Jimenez and Mamta Murthi (2006) Investing in the Youth Bulge, in
Finance and Development, a Quarterly Magazine of the IMF, Volume 43, Number 3,
September 2006.

ESCAP (Economic and Social Commission for Asia and Pacific) (2005) Economic and
Social Survey of Asia and the pacific 2005, UN-ESCAP, New York.

Ministry of Finance, Government of India (1996) Economic Survey 1995-96.

Ministry of Finance, Government of India (2006a) Economic Survey 2005-06.
Ministry of Finance, Government of India (2006b) Union Budget for 2006-07.

Reserve Bank of India (2005) State Finances 2005, December 2005.

Reserve Bank of India (2006) RBI Annual Report 2005-06, August 2006.

Tilak, Jandhyala B.G. (2001) Changing Pattern of Financing Education, National Institute
of Educational Planning and Administration (NIEPA), New Delhi, August 2001.

Tilak, Jandhyala B.G. (2005) Higher education in Trishanku, pp.4029-4037, Economic

and Political Weekly, September 10.

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