It is widely accepted by now that education is India’s best bet if it is to adapt and prosper in the midst of radical technological and political changes – such as automation and the rise of protectionism – that are disrupting the global economy. Crucially, this calls for a fundamental reorganisation of higher education. The draft bill mandating a new Higher Education Commission of India (HECI) to replace the University Grants Commission (UGC) zeroes in on the problem of poor quality of Indian higher education, and ticks boxes in terms of wanting to promote autonomy of institutions and academic standards. Yet there is ground for grave scepticism on whether HECI can rectify UGC’s flaws which effectively hobble higher education.

Empowered to allocate grants and ensure standards in higher education, UGC ended up as a bureaucratic exercise in centralisation. Now the Union human resource development ministry will take over the grant giving function of UGC. HECI has been tasked with specifying learning outcomes, laying down teaching and research standards, evaluating yearly academic performance, and promoting research. But without the ability to offer monetary and other incentives for those scoring high on its regulatory watch HECI will, in itself, be reduced to a toothless tiger.

As if to overcome this fundamental flaw, the ministry seems to be compensating HECI with penal powers that reflect the hyper-regulatory approach of a licence raj. Institutions not meeting HECI standards can be closed down and individuals heading them can even face imprisonment. But fear only breeds insecurity and constrains growth. Quality cannot be decreed by government fiat and punitive measures. Among other things, they will surely prevent top flight foreign educational institutions from opening branches in India. Instead, institutions must be given autonomy and allowed to fail in a competitive market. Funding flows can also be used as a tool to incentivise quality.

UGC’s quality assessment and accreditation body, NAAC, having audited just 40% of universities and 20% of colleges by 2016 – despite being in existence for over 20 years – attests to the failure of bureaucratic centralisation. Allowing competent, independent agencies to undertake this accreditation function – the US has pursued this model for decades – would ensure constant monitoring and accelerate progress towards the regulator’s quality goals. Light touch regulation with built in incentives is the best way to reform higher education.