"Franchising" and "Profit" in Distance Education

by Sadhan Mukherjee

The UGC had put up a set of draft regulations on distance education in its website on December 19, 2013 seeking comments thereon by January 3, 2014. It has now reportedly finalised the same but did not put these up on the website. The regulations, as made known in draft, were rigid, regressive and divorced from present-day reality; and had the hallmark of a typical bureaucratic wooden-headedness. The UGC, it seems, is bent upon overthrowing all that has been achieved so far in the distance education (DE) mode of education.

Last year over 800,000 students passed their class 12th exam through the CBSE, not counting those from other boards, open schools and the ISCE. Many of them were unable to enter the brick and mortar portals of higher education in regular universities. Seats in UG courses in regular colleges are estimated to be just about four lakh. Even if all the seats were filled up, almost half-a-million students couldn’t have joined regular colleges. Many of them have left further study; some possibly joined vocational institutes; some went abroad (which is becoming difficult due to erosion of the rupee value) and the majority must have joined Distance Education (DE) centres. Very soon another lot of Higher Secondary pass-outs will be seeking admissions in undergraduate courses and face the same hurdles in their efforts.

The UGC accepts the fact that over 22 per cent of the gross enrolment in higher education is in the DE but tries to put up roadblocks for these growing numbers of students. The Higher Secondary pass-out students joining DE centres are further supplemented by professionals who cannot join regular colleges for various reasons but still want to improve their qualifications. Over the years, DE has thus emerged as a big solution to the admission problems the students face. The DE mode is a boon to those students who want to have further education and enhance their professional qualifications in time of their choosing. Many universities therefore are running DE programmes and the numbers of DE students is increasing. The figure of 22 per cent of the GER is an old figure; the current figure must be above 25 per cent with over 40 lakh students joining DE every year.

The attempt to put DE under a straitjacket and restrict its spread is not commensurate with our national education objectives. But this has been going on for quite sometime using the unjustified and undefined authority of socalled regulators. Restrictions on DE operations are now being increased on the plea of quality and probity. Why is there no control on the con-trollers? To whom are they answerable? Is it to the bureaucrats of the HRD Ministry or Parliament? The UGC educrats have taken over the task of “regulating†the DE under an executive fiat of the HRD Ministry. That order itself is questionable as it appears that there is no legal authority to do so. It has been already challenged by the IGNOU teachers in the Delhi High Court.

The UGC in its assigned responsibility had issued a public notice on June 27, 2013 indicating some do-s and don’t-s on the functioning of universities including those that carry on distance education.

That public notice inter alia stressed: The Commission has come across many advertisements published in national dailies offering opportunities for the award of university degrees through various franchise programmes conducted by certain private institutions. These private establishments, claiming themselves as study centres or learning centres of different universities, enrol students for various degree programmes and also claim to be responsible for the teaching and conduct of examinations. The faculty and infrastructure belong to these private agencies. The concerned university, except providing syllabus and teaching materials, has no mechanism to monitor and maintain the academic standards of teaching being imparted at these centres. This blatant compromise with the standards of education has led to widespread criticism. The Commission has taken a serious view of these misleading advertisements appearing in various newspapers.

It is this “serious view†that is now being imposed on the DE system through these regu-lations together with restricting DE operations of a university to the State where the university is founded. Several questions thus arise: First, why not prosecute those who give false and misleading advertisements and those that publish these advertisements? Second, has the UGC the authority to dub all DE operations as “franchise†operations? Third, are such operations ipso facto bad and cannot be had in the education sector? Last, under what legal authority does the UGC consider educational advertisements by study or learning centres as franchise advertisements?

There is no law with all-India application on distance education, far less on franchising in DE. However, through several circulars and notices, both the UGC and the now defunct Distance Education Council (DEC) had sought to “interpret†the Supreme Court of India judgment in the well-known Prof Yashpal versus Chhattisgarh universities case as the peg to hang its fiat.

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In its stand elaborated in

Status with regard to Distance Learning Programmes and Territorial jurisdiction of State Private Universities, the UGC claims: In the landmark judgement of the Hon’ble Supreme Court in the case of Prof Yashpal and another versus State of Chhattisgarh and others (2005), the Apex Court specifically considered the issue of extra-territorial operation of State enactment in the form of establishment of off-campus centres, off-shore campus and study centres and ulti-mately in the light of the constitutional mandate as contained in Article 245(1) of the Constitution, laid that “Parliament alone is competent making laws in the whole or any part of the Territory of India and the legislature of State making laws for the whole or any part of State†.

The UGC further argued: The effect and meaning of the judgement of the Hon’ble Supreme Court in the Yashpal case is that each University in the country must have its own territorial jurisdiction and the State University established under the State Act cannot go beyond the territorial jurisdiction of the State concerned to grant affiliation to any institution.

Is this interpretation of the Supreme Court judgment correct? If that is so, why didn’t the UGC or Government of India formalise that position through a parliamentary legislation or by an amendment to the UGC Act? Why does a decisive proclamation on these major issues continues to hang fire since 2005? The objective of the UGC Act says that the UGC is an expert body which, besides giving grants, will also, have the power to recommend to any university the measures necessary for reform and improvement of university education and advise the university concerned upon the action to be taken for the purpose of implementing such recommendations. It is also to act as an expert body to advise the Central Government for the measures to be taken for the standards of teaching and curriculum in universities

The point is that the judgment of the Apex Court in the Chhattisgarh case had only referred the arguments of advocate, Dr Dhawan, appearing for the petitioners. Para 41 of the judgment says: Dr Dhawan has also drawn the attention of the Court to certain other provisions of the Act which have effect outside the State of Chhattisgarh and thereby give the State enactment an extra territorial operation. Section 2(f) of the amended Act defines ‘off-campus centre’ which means a centre of the University established by it outside the main campus (within or outside the State) operated and maintained as its constituent “unit†having the university’s complement of facilities, faculty and staff. Section 2(g) defines “off shore campus†and it means a campus of the university established by it outside the country, operated and main-tained as its constituent unit, having the univer-sity’s complement of facilities, faculty and staff. Section 3(7) says that the object of the University shall be to establish main campus in Chhattis-garh and to have the study centres at different places in India and other countries. In view of Article 245 (1) of the Constitution, Parliament alone is competent to make laws for the whole or any part of the territory of India and the legislature of a State may make laws for the whole or any part of the State. The impugned Act which specifically makes a provision enabling a University to have an off-campus centre outside the State is clearly beyond the legislative competence of the Chhattisgarh legislature.

This was the view of Dr Dhawan. The Supreme Court referred to this view during discussion of the case, but it did not pronounce a verdict. In fact, the UGC admits as much. In its explanation, to the “status†document, it says: The UGC vide its letter, dated 16.04.2009, informed all the State governments to take suitable steps for amending the existing state Acts so as to bring the same in conformity with the

observations

(emphasis added) made by that Apex Court in the Yashpal case, and with the request to the State governments to stop all the State/State Private Universities from operating beyond the Territorial jurisdiction of the State in any manner, either in the form of Off Campus/Study Centre/affiliated College and Centres operating through franchises.

Why does the UGC or government attach so much importance to these particular “obser-vations†of the Apex Court while many of its other observations and even orders are ignored or delayed? Does this stand of the UGC naturally flow from the “observations†or the obiter dicta of the apex court? In any case “off-campus centre†and an “authorised centre†are two different things. The Apex Court’s focus in this case was on the state of affairs of the Chhattisgarh universities and their teaching capabilities, and it held sections 5 and 6 of the Chhattisgarh law ultra vires to the Constitution. These two sections dealt with the following: Under Section 5 of the Act the State has been empowered to incorporate and establish a university by issuing a notification in the Gazette and Section 6 permits such university to affiliate any college or other institution or to set up more than one campus with the prior approval of the State Government.

What the Apex Court finally ordered in this Chhattisgarh case is: In view of the discussions made above, Writ Petition (C) No. 19 of 2004 (Prof Yashpal and another versus State of Chhattisgarh and others) and Writ Petition (C) No-565 of 2003 (Gopalji Agarwal versus Union of India and others) are allowed and provisions of Section 5 and 6 of the Chhattisgarh Niji Kshetra Vishwavidyalaya (Sthapana Aur Viniyaan) Adhiniyam, 2002 are declared to be ultra vires, and are struck down. As a consequence of such declaration, all notifi-cations issued by the State Government in the Gazette in the purported exercise of power under Section 5 of the aforesaid Act notifying the Universities (including respondent nos. 3 to 94) are quashed and such Universities shall cease to exist...

Nowhere did the Apex Court pronounce a verdict on territorial jurisdiction nor did it say anything about franchising. The stand of the UGC therefore has no legal basis. The UGC Act does not deal with DE as such while making the Commission the authority to deal with universities. The NCHER bill is pending before Parliament and some MPs have opposed it on the basis that it is unitary and bestows too much authority in that body while ignoring the interests of States. What about the UGC? It has now become that behemoth single body to control all universities and higher educational institutions.

As said before, there is no law either on distance education or on its territorial jurisdiction and mode of its operation. In a recent judgment on March 12, 2013 the Madras High Court allowing writ petition no 30039 of 2012 and MP nos 2 and 3 of 2012 (Annamalai University versus Union of India and others) rejected the plea of territorial jurisdiction in distance education imposed by the UGC and others.

As for the other point on franchising, let’s assume that there are widespread franchising practices in some universities; then one may ask what is wrong with taking third party assistance in running DE courses? Isn’t third party assis-tance or outsourcing a common practice in India and elsewhere practically in all fields of activity?

All works in any establishment, including the government, judiciary, administration, etc., are not and cannot be exclusively carried out by the principals. Many works are sourced to third parties. This is done to speed-up the work and to facilitate their smooth operation. Even schools are set up as franchisees of prominent school “brands†. The point is how much supervision and control the principal exercises over the work assigned to the third party or is it left entirely to the “contractor†.

DE learning centres or study centres provide third party auxiliary education services to the universities. These centres do not take admi-ssions for themselves. The students are students of the university and their admission, continuous assessment, examinations, et al. are conducted or controlled by the universities concerned. Universities pay certain amounts to these centres to defray their expenses. They do not pay any commission as percentage of sales which is common in franchising.

If any university allows its authorised centres to enroll students in their own names, conduct exams etc, that university and its centres should be hauled up and criminal charges filed against them for cheating and other cognisible offences. As the UGC has no authority to impose sanctions against universities, only a proper court of law should handle such cases. Why hasn’t the UGC taken up that issue? If the UGC can publish the list of “fake universities†, why can’t it publish the list of universities indulging in malpractices and offering fake degrees?

The CMJ University of Meghalaya was forced to close down because the Governor of the State in his capacity as Visitor found out some misdeeds of this university. No credit goes to the UGC or other so called regulatory bodies that kept quiet for all these years.

The HRD Ministry reportedly is pressing for allowing foreign universities to open campuses in India. As these are not set up in India and do not operate as per the UGC Act, the subterfuge is to allow them to operate under the Companies Act! But then no company can award a degree unless it is a university under the UGC Act! Several Supreme Court judgments have held that no degree is valid unless awarded by a university. But who will control the bureaucrats/educrats and their ploys?

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There is another angle to it. A contrived view that is avidly propagated is that there should be no profit motive in education! Why? Which public service is free or without profit? Don’t hospitals charge from patients except for some general medicines, and that too only in some charitable hospitals? Postal services are not free. Courts charge fees. Even an RTI application costs Rs. 10. What about railways? Fares and freight rates are going up and up with every passing year. Every service is aimed at making the effort viable and profitable. There is no gainsaying that there should be no profit in education services.

There is a strange dichotomy. While private participation is allowed in the education sector, the “guiding principle†is that it must be on a “no profit†basis. The Supreme Court has ruled that these institutions are permitted a “reasonable surplus to meet the cost of expansion and an augmentation of facilities†but prohibited these from charging capitation fees or indulge in profiteering. However, none of its judgments, such as the 1993 Unnikrishnan case, the 2002 T. M. A. Pai Foundation case, the 2003 Islamic Academy of Education case, and the 2005 P. A. Inamdar case as well as T. M. A. Pai Foundation and others versus State of Karnataka and others, Writ Petitions (C) No. 317 of 1993, 25 November 2002, defined what is “reasonable surplus†. And no body has bothered to get an authoritative verdict on this point. It has remained vague, giving a handle for interpretation by the so-called regulators.

In the T. M. A. Pai case, the Court held [Para 45]: In view of the discussion hereinabove, we hold that the decision in Unnikrishnan’s case, insofar as it framed the scheme relating to the grant of admission and the fixing of the fee,
was not correct, and to the extent, the said decision and the consequent directions
given to UGC, AICTE, Medical Council of India, Central and State governments, etc., are overruled.

The Apex Court thus stopped short of making education also an activity where the private sector can charge reasonable fees and have a certain degree of operational freedom. Thus, only education so far has remained singled out as a “non-commercial venture†. The point that universities, both state-funded and non-funded, must earn sufficient funds to provide better facilities and improved services to students with modern means and pay adequately to the faculty or create better infrastructure does not strike anybody or they are playing possum. What the UGC pays as grant to some universities is nothing but a dole. In fact, by spreading out to DE, universities are earning more funds than UGC grants to help the budgetary improvement of universities.

Myths about distance education therefore need to be demolished and if the PPP model is to succeed, it must be freed from those constraints that prevent the spread of higher education in the country. When the developed countries have moved from distance education to distributed learning and beyond, we are quibbling on modalities of DE and bureaucratic claptraps!

The author is a former journalist and is currently engaged in education management through distance education.