The shortage of skilled man-power is a cause for concern in most sectors in India.  Experts acknowledge that the present higher education system in India is not equipped to address this problem without some changes in the basic structure.  Official records show that the gross enrollment ratio in higher education is only 11 per cent while the National Knowledge Commission says only seven per cent of the population between the age group of 18-24 enters higher education.  Even those who have access are not ensured of quality.  Despite having over 300 universities, not a single Indian university is listed in the top 100 universities of the world. Present Regulatory framework The present system of higher education is governed by the University Grants Commission (UGC), which is the apex body responsible for coordination, determination and maintenance of standards, and release of grants.   Various professional councils are responsible for recognition of courses, promotion of professional institutions and providing grants to undergraduate programmes.  Some of the prominent councils include All India Council for Technical Education (AICTE), Medical Council of India (MCI) and the Bar Council of India (BCI).  The Central Advisory Board of Education coordinates between the centre and the states. Universities in India can be established by an Act of Parliament or state legislatures such as Delhi University, Calcutta University and Himachal Pradesh University.  Both government-aided and unaided colleges are affiliated with a university.  The central government can also declare an institution to be a deemed university based on recommendation of the University Grants Commission.  There are about 130 deemed universities and includes universities such as Indian Institute of Foreign Trade and Birla Institute of Technology.  Such universities are allowed to set their own syllabus, admission criteria and fees.  Some prominent institutions are also classified as institutions of national importance. Reforms in Higher Education There have been calls to revamp the regulatory structure, make efforts to attract talented faculty, and increase spending on education from about 4% of the Gross Domestic Product (GDP) to about 6%. Presently, the allocation for higher education is at a measly 0.7% of GDP. From time to time government appointed various expert bodies to suggest reforms in the education sector.  The two most recent recommendations were made by the National Knowledge Commission (NKC) formed in 2005 under the chairmanship of Mr Sam Pitroda and the Committee to Advise on Renovation and Rejuvenation of Higher Education, formed in 2008 under the chairmanship of Shri Yashpal.

Key Recommendations of NKC Key Recommendations of Yashpal Committee
  • Presently, India has about 350 universities.  Around 1,500 universities should be opened nationwide so that India is able to attain a gross enrolment ratio of at least 15% by 2015.
  • Existing universities should be reformed through revision of curricula at least once in three years, supplementing annual examination with internal assessment, transition to a course credit system, attract talented faculty by improving working conditions and incentives.
  • A Central Board of Undergraduate Education should be established, along with State Boards of Undergraduate Education, which would set curricula and conduct examinations for undergraduate colleges that choose to be affiliated with them.
  • An Independent Regulatory Authority for Higher Education (IRAHE) should be formed.  IRAHE should be independent of all stakeholders and be established by an Act of Parliament.
  • The UGC would focus on disbursement of grants and maintaining public institutions of higher learning.  The regulatory function of the AICTE, MCI, and BCI would be performed by IRAHE.
  • The IRAHE shall have the power to set and monitor standards, accord degree-granting power to institutions of higher education, license accreditation agencies, and settle disputes.  Same norms shall apply to all institutions irrespective of whether they are public or private, domestic or international.
  • Quality of education can be enhanced by stringent information disclosure norms, evaluation of courses by teachers and students, rethinking the issue of salary differentials within and between universities to retain talented faculty, formulating policies for entry of foreign institutions in India and the promotion of Indian institutions abroad.
  • The academic functions of all the professional bodies (such as UGC, AICTE, MCI, and BCI) should be subsumed under an apex body for higher education called the National Commission for Higher Education and Research (NCHER), formed through Constitutional amendment.
  • The professional bodies should be divested of their academic functions.  They should only be looking after the fitness of the people who wish to practice in their respective fields by conducting regular qualifying examination.
  • Establish a National Education Tribunal with powers to adjudicate on disputes among stake-holders within institutions and between institutions so as to reduce litigation in courts involving universities and higher education institutions.
  • Curricular reform should be the top-most priority of the NCHER.  It should be based on the principles of mobility within a full range of curricular areas.
  • Vocational education sector should be brought within the purview of universities.
  • NCHER should promote research in the university system through the creation of a National Research Foundation.
  • Practice of according status of deemed university be stopped till the NCHER takes a considered view on it.
  • NCHER should identify the best 1500 colleges across India and upgrade them as universities.
  • A national testing scheme for admission to the universities on the pattern of the GRE to be evolved which would be open to all the aspirants of University education, to be held more than once a year.
  • Quantum of central financial support to state-funded universities should be enhanced substantially on an incentive pattern.
Sources: The Report to the Nation, 2006-09, NKC; Yashpal Committee Report, 2009; PRS

The Draft NCHER Bill, 2010 In response to the reports, the government drafted a Bill on higher education and put it in the public domain.  The draft National Commission for Higher Education and Research Bill, 2010 seeks to establish the National Commission for Higher Education and Research whose members shall be appointed by the President on the recommendation of the selection committee (include Prime Minister, Leader of the Opposition in Lok Sabha, Speaker). The Commission shall take measures to promote autonomy of higher education and for facilitating access, inclusion and opportunities to all.  It may specify norms for grant of authorisation to a university, develop a national curriculum framework, specify requirement of academic quality for awarding a degree, specify minimum eligibility conditions for appointment of Vice Chancellors, maintain a national registry, and encourage universities to become self regulatory.  Vice Chancellors shall be appointed on the recommendation of a collegium of eminent personalities.  The national registry shall be maintained with the names of persons eligible for appointment as Vice Chancellor or head of institution of national importance.  Any person can appeal a decision of the Commission to the National Educational Tribunal. (For opinions by some experts on the Bill, click here and here.) Other Bills that are in the pipeline include The Foreign Educational Institutions (Regulation of Entry and Operation) Bill, 2010; the Central Educational Institutions (Reservation in Admission) (Amendment) Bill, 2010; and the Innovation Universities Bill, 2010.

The Insolvency and Bankruptcy Code, 2015 was introduced in Lok Sabha yesterday, as a Money Bill [Clarification: This is as per news reports.*  The text of the Bill does not indicate that it is a Money Bill].  In this context, we briefly outline the various types of Bills in Parliament, and highlight the key differences between Money Bills and Financial Bills. What are the different types of Bills? There are four types of Bills, namely (i) Constitution Amendment Bills; (ii) Money Bills; (iii) Financial Bills; and (iv) Ordinary Bills. What are the features of each of these Bills?

  • Constitution Amendment Bills[i]: These are Bills which seek to amend the Constitution.
  • Money Bills[ii]: A Bill is said to be a Money Bill if it only contains provisions related to taxation, borrowing of money by the government, expenditure from or receipt to the Consolidated Fund of India. Bills that only contain provisions that are incidental to these matters would also be regarded as Money Bills.[iii]
  • Financial Bills[iv]: A Bill that contains some provisions related to taxation and expenditure, and additionally contains provisions related to any other matter is called a Financial Bill. Therefore, if a Bill merely involves expenditure by the government, and addresses other issues, it will be a financial bill.
  • Ordinary Bills[v]: All other Bills are called ordinary bills.

How are these bills passed?

  • Constitution Amendment Bills1: A Constitution Amendment Bill must be passed by both Houses of Parliament. It would require a simple majority of the total membership of that House, and a two thirds majority of all members present and voting.  Further, if the Bill relates to matters like the election of the President and Governor, executive and legislative powers of the centre and states, the judiciary, etc., it must be ratified by at least half of the state legislatures.
  • Money Bills[vi]: A Money Bill may only be introduced in Lok Sabha, on the recommendation of the President. It must be passed in Lok Sabha by a simple majority of all members present and voting.  Following this, it may be sent to the Rajya Sabha for its recommendations, which Lok Sabha may reject if it chooses to.  If such recommendations are not given within 14 days, it will deemed to be passed by Parliament.
  • Financial Bills4: A Financial Bill may only be introduced in Lok Sabha, on the recommendation of the President. The Bill must be passed by both Houses of Parliament, after the President has recommended that it be taken up for consideration in each House.
  • Ordinary Bills5: An Ordinary Bill may be introduced in either House of Parliament. It must be passed by both Houses by a simple majority of all members present and voting.

How is a Money Bill different from a financial bill? While all Money Bills are Financial Bills, all Financial Bills are not Money Bills.  For example, the Finance Bill which only contains provisions related to tax proposals would be a Money Bill.  However, a Bill that contains some provisions related to taxation or expenditure, but also covers other matters would be considered as a Financial Bill.  The Compensatory Afforestation Fund Bill, 2015, which establishes funds under the Public Account of India and states, was introduced as a Financial Bill.[vii] Secondly, as highlighted above, the procedure for the passage of the two bills varies significantly.  The Rajya Sabha has no power to reject or amend a Money Bill.  However, a Financial Bill must be passed by both Houses of Parliament. Who decides if a Bill is a Money Bill? The Speaker certifies a Bill as a Money Bill, and the Speaker’s decision is final.[viii]  Also, the Constitution states that parliamentary proceedings as well as officers responsible for the conduct of business (such as the Speaker) may not be questioned by any Court.[ix]


  [i]. Article 368, Constitution of India. [ii]. Article 110, Constitution of India. [iii]. Article 110 (1), Constitution of India. [iv]. Article 117, Constitution of India. [v]. Article 107, Constitution of India. [vi]. Article 109, Constitution of India. [vii]. The Compensatory Afforestation Fund Bill, 2015, introduced in Lok Sabha on May 8, 2015, http://www.prsindia.org/billtrack/the-compensatory-afforestations-fund-bill-2015-3782/. [viii]. Article 110 (3), Constitution of India. [ix]. Article 122, Constitution of India. [*Note: See Economic Times, Financial Express, The Hindu Business LineNDTV ,etc.]