CII seeks changes in FCRA to spur investment in education

14 Nov

New Delhi: Industry chamber CII has made a pitch for changes in the Foreign Currency Regulation Act to alleviate investor apprehensions over some provisions so that greater FDI can flow into the higher education sector.

It has recommended that a clarification be made that FCRA is not applicable to investments made under automatic FDI in a Section 25 company against equity subscription.

At present, 100 percent foreign direct investment (FDI) is allowed in education.

For-profit entities are not allowed to get licences from the University Grants Commission. They are not allowed to function as private universities under the Acts of different state governments.

Hence, the investment vehicle is often a Society or a Trust or a Section 25 company.

Since only a Section 25 company can issue share capital, it is the most preferred medium for investment. Money flows into the operating ‘not-for-profit’ set up from an Indian corporate, or a fund in India or abroad, or from a foreign collaborator.

Wherever there is FDI, as is the case with most venture capital and private equity investments, or indirect in the sense that the investing company has foreign shareholders or has access to foreign funds, the FCRA Act comes into play.

While all legal authorities and accounting firms are of the opinion that investment in a Section 25 company, being in exchange for a share subscription, does not come under FCRA, investors are jittery since the FCRA legislation has harsh penal provisions, it added.

The CII recommendations form part of the paper which CII had recently submitted to the Planning Commission for inclusion in the 12th Plan (2012-17).

India’s growing youth population: Asset or liability?

14 Nov

India is poised to have one of the largest pools of young people in the world in the future. Demographically, does that qualify as a dividend or a disaster?

You can’t make a real argument either way unless you take another aspect into account: skill.

The able working population in India must be transformed into capable working people. Numbers alone don’t matter. A growing population of young people becomes an asset only when it has the skills to become an economically productive segment of society. Otherwise, it ends up being an economic burden, consisting of more mouths to feed.

India is poised to have one of the largest pools of young people in the world in the future. Demographically, does that qualify as a dividend or a disaster? Punit Paranjpe/AFP

Ensuring that its youth population turns into an economic asset is the challenge that faces India today, according to experts who participated in a skills development discussion at the World Economic Forum (WEF) India Summit being held in Mumbai.

Panel experts also believed that without harnessing the potential of its youth population, the economy would be unable to gallop ahead in double-digits.

Thankfully, the government is aware of that. “The problem of skill development has to be tackled at different levels, said Kapil Sibal, human resource development minister. “We are planning to launch a training policy framework in 2012 so that by 2022, India will have 500 million skilled people and 200 million graduates.”

According to Rajiv Khandelwal, co-founder and executive director of Aajeevika (Livelihood Bureau), an organisation that provides support services to migrant workers, there are currently 40 million people employed in the unorganised sector. Those who work in the unemployed sector typically have few skills and consequently, get very poorly paid. Most of them hail from relatively poor states like Uttar Pradesh, Bihar and Rajasthan.

Because the nature of their work is often tough and offers few benefits by way of insurance and pensions, most workers don’t survive very long on the job. In fact, the average age of retirement in the unorganised sector is 28 years, Khandelwal, the WEF’s social entrepreneur for 2010, revealed.

Education and development of skills will go a long way in ensuring that large chunks of future generations don’t end up the same way.

To do that, the panelists urged the government and corporate sector to join hands. Technology could also pitch in to help towards improving young India’s skills sets.

N Chandrashekharan, chairman and managing director of IT company Tata Consultancy Services, and RS Pawar, chairman of NIIT, a technology education service provider, noted that 400,000 teachers would be required in the coming decade to train the next generation.

Since it was highly unlikely that many teachers would actually be available by then, they suggested telecom and broadband services could be used instead to reach students even in the remotest part of the country.

Clearly, the fact that India will soon be home to one of the world’s youngest populations in future can become a tremendous asset, but only if our policy makers start planning for it today.

The right to fix your education

14 Nov

On Friday, the Prime Minister launched the Shiksha Ka Haq Abhiyan — a yearlong nationwide campaign for promoting the Right to Education (RTE). As these efforts gain ground, the country faces one important choice: should elementary education be delivered through the current model, which focuses on the expansion of schooling through a top-down, centralised delivery system? Or should we use the RTE as an opportunity to fundamentally alter the current system, to create a bottom-up delivery model which builds on an understanding of children’s learning needs, and which privileges innovation and accountability for learning, rather than schooling?

Lets’ first understand the current system. For decades, India’s education goal has been to create a universal elementary education system by expanding schooling through inputs: building schools, hiring teachers, and enrolling children in these schools. Substantial finances have been provided to create these inputs: in 2008-09 the country spent Rs 6,314 per child (this is a low estimate, as available data is yet to take into account post-RTE budget hikes). Most of this money has gone toward creating a large education bureaucracy controlled and managed by the state and central government.

EC Plans Using Facebook to Educate Voters

14 Nov

KOLKATA: The Election Commission is planning to take the help of social networking sites like Facebook and Twitter to impart electoral messages to young voters, Chief Election Commissioner S Y Quraishi said.

“The Commission is now seriously looking at the social media as the hubs to impart electoral education,” Quraishi said delivering the Maulana Azad Memorial Lecture 2011 titled ‘Education for Deepening Democracy’.

“Like Maulana Azad, I believe that an educated and aware citizen is the best guarantee for deepening both democracy and development,” Quraishi said.

The CEC said he had recently held talks with policy makers of Education and Youth ministries to integrate citizenship and voter education as a part of the curriculum of their various courses.

“We have established the India International Institute of Democracy and Election Management ( IIDEM) making voter education a core area of emphasis in it,” Quraishi said.

Regretting that many voters in the age group of 18-35 years do not exercise their voting rights for whatever reason, the CEC said the Commission has put voter education and awareness programme on fast track to improve the situation.

In a strategic initiative called YUVA (Youth Unite for Voter Awareness), the Commission has planned to rope in the new and young voters, he said.

Can India’s growth tackle its ills?

14 Nov

The answer actually lies in the neighbouring Chinese economy where the GDP growth touched nearly 10 per cent on an average in the last three decades. Imagine China, known as the factory to the world, importing brides from neighbouring Laos, Cambodia and South Korea!  That is actually true.

So how will Indian values continue to be shaped by the country’s distinct growth story?  Those questions were deliberated upon by the panelists and delegates from all over the world at the World Economic Forum (WEF) in Mumbai on Sunday.

Going back to China’s bride import example, many would happily put the blame on the mainland’s ‘one child policy’. But what motives could one put on India’s recently declared worst sex ratio (914 females per 1,000 males) since its independence? India is just at the cusp of a China kind of growth in the next few decades. The soft statistics emanating from India are also not very encouraging.  For example, Punjab, the most prosperous state, has 893 girls per 1,000 boys. India, whose trade deficit touched a record high of close to $20 billion last month, will soon have to follow the Chinese footsteps of importing brides.

Shantanu Prakash, managing director of Educomp Solution pointed out that research has proven that education is really a tool that opens up the mind. “India currently has  one of the lowest GDP-to-education spend amongst the ASEAN countries,” says Prakash, citing India’s biggest state Uttar Pradesh’s example where almost 97 per cent of the education budget goes to paying the salary of teachers and other staff.  So is education the answer?

You may agree that as people become more educated and modernized the traditional fixation with male child would gradually decline.  But that doesn’t seem to be showing on the ground. The worst sex ratio is in the Mumbai’s South Mumbai Malabar Hill and Colaba where the most affluent and educated people live. “The ratio of perfectly normal if you step into the tribal areas around Mumbai,” said Rajni Bakshi, fellow, Gateway House (India), a Mumbai think tank.

Bhagyashri Dengle, executive director at Plan India, a community development organization, is more blunt.  “We have a growing society which is killing girls in the womb,” says a charged Dengle, while explaining that the conventional role of women hasn’t changed much in the real India. So what’s the model of prosperity for one of the world’s fastest growing economy? “Education will (only) give you a platform, but you still have to take informed decision,” reasons Educomp’s Prakash. Spiritual guru Nikhilananda Saraswati of Chinmaya Mission pitches in by suggesting, “We have to change the paradigm of education. We need value based and informal education today.”

The other big hurdle before a healthy growth is the unstoppable corruption in the Indian society. One of the delegates asked how an Australian media outlet wrote about India being culturally corrupt. “We have a high tolerance to corruption. We don’t denounce it,” he says, while naming some of the politicians and even chief ministers coming back to power with majority despite corruption charges against them.

There was also no clear cut answer at the policy level as to whether India should alleviate poverty first or focus on education or skilling? “Sustainable development actually means sustaining the values while we are developing,” stresses the spiritual guru. There is a lot the private sector can do in many of the social and cultural areas. “Philanthropy is not new to this country. It goes back to years even before Europe took a lead,” reminded Mario Marconi, managing director (family services) at UBS, asking why that has not gained momentum. “We have to balance the materialistic and the spiritual world,” suggests Chinmaya Mission’s Saraswati.

The growth juggernaut fuelled by consumption and investment won’t wait for any of these issues. Somebody has to challenge it whether it is the political society, the business society or the civil society. Anti-corruption movement, for one, is taking a lead. But what’s important is that the society has to embrace it.

beyondbrics

14 Nov

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email ftsales.support@ft.com to buy additional rights. http://blogs.ft.com/beyond-brics/2011/11/13/wef-india-mukesh-ambani-calls-for-private-universities/#ixzz1desi8xVH

It’s no secret that India’s education system is greatly lagging behind its rapid economic growth, booming population and ambitions as a global power.

But India’s richest man has a simple solution: change the law and let the private sector build the world-class universities the government has so far failed to fund and create.

India’s education gap has long been considered a major hindrance to the ascendance of Asia’s third largest economy to the world stage – its inability to provide a basic, let alone world-class, education to many of its citizens means it may not be able to capitalise on its much-vaunted demographic dividend.

As beyondbrics recently reported, Indian universities – because of a lack of funding, more stringent government regulations and an inability to accommodate student demand – are far behind their western couterparts.

Even with only 14 per cent of India’s roughly 97m people of higher education age enrolled in university, the country’s schools are overwhelmed.

Many top-ranked international institutions in the US and elsewhere have annual expenditures of over $3bn dollars. The Indian Institute of Technology-Bombay, India’s highest-ranking university, has total research funding, on the other hand, of just $36.6m for 2010-2011.

And so India’s government and industry need to work together to meet the aspirations of the country’s young, and growing, population. The best way to do that is “building a world class university,” Mukesh Ambani, billionaire chairman of Reliance Industries told investors and policymakers at the World Economic Forum’s India Economic Summit on Sunday.

“Now in India, by law, private sector cannot build [such institutions],” he added. “We’ve talked about how important education is, and if you really want to build a not-for-profit education university, the framework doesn’t exist for that, the rules don’t exist for that, the legislation [doesn’t] exist”.

Ambani is already putting his money where his mouth is. He’s in talks with the London School of Economics to set up universities in India in conjunction with Reliance Foundation, his company’s philanthropic arm, which is run by his wife, Nita, according to the Economic Times.

He praised the efforts of Prithviraj Chavan, the chief minister of Maharashtra – the state in which lies India’s commercial centre, Mumbai, which hosted the summit – in fast-tracking the legislation that would allow Reliance and LSE to move forward with their plans.

Chavan, also seated on the panel, said the very vastness of the population such world-class universities might serve is actually what keeps the government from being able to pass legislation that will allow them to be built.

“The big challenge before the political system in India is managing the diversity in the country,” he said. “We have already got that legislation through [in Maharasthra] … the difficulty is now what kind of social justice parameters do we add into that.”

Chavan said that affirmative action programs – which reserve seats for students from historically oppressed tribes or castes – would need to be included, but that such social programs might come at the cost of high-quality investment in the field.

“International universities do not want any shackles by affirmative action programs, but how do I reconcile the two?” he said. “That is the diversity and the contradiction [of this system].”

Anna’s Lokpal will cost Rs2,000 crore each year: Activists

14 Nov

India may have to shell out Rs2,000 crore every year to maintain the Lokpal as suggested by Anna Hazare and team, say social activists and former bureaucrats in Chennai. They also alleged that the bill, as proposed by Team Anna, had many shortcomings.

Speakers at a seminar organised by the Southern India Education Trust and the Forum for the Promotion of Moderate Thought among Muslims (FPMTAM), called for dismissing such proposals and, in turn, introducing amendments which would safeguard democracy and secularism in the country.

AFaizur Rehman, secretary general, FPMTAM, described Lokpal as a behemoth, and wanted to know if it was wise to dedicate an annual budget of 0.25% of India’s gross annual revenue for it. “The bill’s drafters should explain the rationale behind the demand,” he said.

Veteran bureaucrat MR Sivaraman, former Union revenue secretary, said the bill has ignored the fact that corruption has two sides — the giver and the taker. “The guilt of the former has been left out completely,” he said. He also opposed granting powers to Lokpal for tapping telephones.