Opening institutes made easier for firms

Opening institutes made easier for firms

New Delhi: The government has made it easier for private companies to open and run higher education institutes. It has also reduced the land requirement for setting up new institutes in cities to increase the number of technical institutes, particularly in areas where they are still not present.

Higher education institutes have been typically opened by societies or trusts until now.

“We are allowing companies registered as non-profit entities under Section 25 of Company’s Act, 1956, to establish technical institutions. It will allow good corporates to set up technical institutions," human resource development (HRD) minister Kapil Sibal said on Thursday.

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Opening an institute as a Section 25 company allows an entity to bring in domestic and overseas investment and open branches in other states, said Narayanan Ramaswamy, executive director of the consulting firm KPMG. In comparison, educational trusts can only take donations, not investments, and they have to register themselves in every state they want to open branches.

Despite the change in rule, companies can still not get foreign funds to set up technical institutes in India as a Bill on the matter is pending in Parliament.

Sibal said private firms can join hands with Union or state governments to set up higher education institutes, operate them, recover their cost, and hand them over to the government.

The decision was taken at a meeting of the All-India Council of Technical Education, or AICTE, the technical education regulator.

“This PPP (public-private-partnership) and BOT (build-operate and transfer) model will be applied in 241 districts where there is no AICTE recognized institute," the minister added.

The land required to open engineering, management and architecture institutes in cities has been reduced to 2.5 acres from 3.5 acres. Management and architecture institutes have also been allowed to add more storeys to their buildings to meet the requirement.

“It is tough to find land in cities, hence we have made the changes," the minster said.

An institute’s administration can now also open two colleges on the same campus.

The decisions come just days after the HRD ministry allowed existing technical institutes to add an estimated 200,000 seats, as Mint reported on 21 December. There are more than 3 million students enrolled in technical education in India, mostly in engineering colleges.

“Around 220 million students are in schools but less than 15 million pursue higher education in India. The government’s effort to increase the number of institutes and make it industry friendly will provide access to a large number of students who these days don’t enjoy that benefit," said Ramaswamy. “However, faculty crunch is a major issue that needs to be addressed."

The AICTE meet also decided not to recognize one-year master of business administration (MBA) programmes. “No MBA course less than 24 months will be recognized," Sibal said.

The minister also said that technical institutes approved by AICTE have to reserve up to 5% of seats for poor students.

Changes in rules governing the entry of students from one institute to another and skill development were also announced.