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Nirmala Sitharam has proposed the introduction of FDI in the education sector in Budget 2020-21. Several experts working in the industry say that the move will help enable the development of better infrastructure and help provide a boost to education and innovation in the country.
Nirmala Sitharaman, the Finance Minister, has proposed the introduction of Foreign Direct Investment (FDI) in the education sector in the Budget 2020-21. It is expected that FDI will be the key factor in providing a boost to the growth of the Indian education sector. Currently, foreign varsities that sought collaboration with Indian universities could only do so through exchange programmes and signing MoU (Memorandum of Understanding).
Foreign universities and investors are expected to follow the Greenfield Investment (GI) and the Brown Investment (BI), both models of revenue sharing or FDI. The difference between these is that while under the GI model, an investor establishes its own operations and infrastructure, investors following the BI model invest in an existing facility to begin operations.
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Several experienced professionals working in the education sector have optimistic opinions about this proposal.
As per Mr Navneet Sharma, the Dean of Vijaybhoomi University, FDI is likely to follow both these models. This will not only enable the development of new infrastructure and facilities for students but also aid in the development and growth of existing institutes in the country. Sharing more insights on the introduction of FDI in Indian education, he said that it will help universities have and engagement-based revenue model for investments. According to him, a number of factors, such as student exchange, the award of degree, development of science and technology etc. will contribute towards deciding the ratio of the revenue model.
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Atul Chauhan, Chancellor of Amity University, said that the inflow of wealth would assist in speeding up the innovation revolution, help provide better infrastructure to the students to match the global workforce standards and will allow for retention of talent in the country. Pradeepta Sethi, Associate Professor in Finance at T A Pai Institute of Management, said that FDI will institutes to better monetise their IPR (Intellectual Property Rights).
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