The regulatory challenges identified in this sector are:

1. Overlapping regulations at different layers – for opening a university/college; offering a course; getting accredited – which add to the time and cost of entering and operating in this sector;

2. High capital requirement to meet land norms, endowment fund and other such requirements. This is further aggravated by restrictions on the source of funding – only a Society or Trust or Section 25 company can be a sponsoring body, i.e., for-profit organisations cannot finance such ventures;

3. Outdated but rigid requirements with respect to faculty qualification/library norms/channel of delivery which serve little purpose while adding significantly to costs;

 4. Lack of clear and easily accessible documentation of the requirements for a private institution to be setup – thereby allowing for high rent-seeking opportunities;

5. The accreditation limited to only two agencies, which do not have the capacity to process applications thereby resulting in large backlogs in accreditation;

6. Finally, neither of the agencies has recognised the need to move to outcome-based recognition norms and instead saddle applicants with input-heavy-norms.

We are group of professional advisors and consultants in setting up a private university in various states (Punjab, Rajasthan, Haryana, UP etc.), for setting up a deemed-to-be-university under UGC; and for opening colleges.

There are many options to solve the challenges listed above, including:

1. Limiting entry norms to verification of the financial strength of the applicant rather than mandate land, facility or endowment fund requirements which contribute little to the outcomes of the institutions, as is the case in all three countries studied (USA, Australia and Malaysia);

2. Approving entry of for-profit institutions to substantially widen the pool of entrants into this critical sector which is currently restricted to non-profits; giving “infrastructure” status to attract investments; and permitting conversion of existing trusts and societies to Section 25 companies;

3. Allowing flexibility in meeting the norms, for example, students in the United States are allowed to access an external library that has an official arrangement with the college rather than require each institution to setup its own library; and

4. Consolidating the regulatory structure of this sector by eliminating the over-lapping regulations that are currently defined at the university, college, course and accreditation levels.

Admittedly this sector has seen many reforms in the last two decades, but they have been unable to effectively address the regulatory problems that have crippled it. India achieved a GER of 17.8% from 12.3% during the 11th FYP, which could not have been possible without the private sector’s aid.

The 12th FYP aims to increase the GER further by at least 10%. This can only be attained by reforming the higher education sector in such a way that it clears the path for more private participation.

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