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For the first time an Indian institution of higher education has been ranked among the top-twenty in the world. The Indian School of Business (ISB) was ranked 20th in a list of the top 100 business schools by the prestigious Financial Times two weeks ago. A
Chinese business school was No. 11; four European schools came in the top-10, and the rest were from the United States.

But wait a minute. Isn’t the ISB illegal? ISB officials explain that they don’t want accreditation from India Council of Technical Education (AICTE) because then "they will decide our courses, our student intake, and even the size of our buildings". I spoke to a top AICTE official, who scornfully dismissed the Indian School of Business - "Its fees are too high and it doesn’t even have a permanent faculty." I gently suggested that its faculty is world-class if not permanent. And why worry about fees when every student has a loan. They must be doing something right if students command a mean salary of Rs 16 lakhs a year at graduation.

ISB is India’s only school in the top-100 list. There might have been more but for AICTE. One of these is Mumbai’s premier S. P. Jain Institute, run by a no-nonsense Harvard graduate. It doesn’t bribe; nor does it succumb to politicians for admissions. Hence, it is punished. It applied to admit 120 students in 1992, but got approval for 45. In 2001, it applied for 180, but didn’t get approval for six years. In 2004, AICTE rejected its unique dual degree program with a reputed foreign university, whereby the latter would have flown its faculty to India. Its innovative program for family-run businesses was also rejected. Last year, it seriously contemplated closing down. Instead, it has started campuses in Dubai and Singapore - far beyond AICTE’s reach.

What do you do when the keepers of the law become its oppressors? AICTE was set-up to encourage higher education, but it achieved the opposite. Honest officials have tried cleaning it up periodically, but they have always been removed by politicians, who happen to own many of our worst private institutions. The answer, of course, is to give autonomy to all education institutions. Regulators should only ensure that they provide mandatory disclosure on the Internet about their courses, faculty, fees, and facilities (with severe punishment for false claims). Professional rating services should evaluate colleges with the same credibility as CRISIL rates industrial companies. Competition will take care of the rest. Students will be able to make informed choices. Good institutions will thrive and poor ones will close.

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Gurcharan Das is an author, consultant and public intellectual. He is a columnist for The Times of India, and other newspapers & magazines; also the author of the international bestseller, 'India Unbound', published in many countries and languages, and filmed by BBC. He graduated with honors from Harvard University in Philosophy & Politics. He was Chairman & MD of Richardson Hindustan Ltd. from 1981-1985. Then, CEO of P&G India & Vice President of P&G Far East, between 1985-1992, and later VP & MD of P&G Worldwide (Strategic Planning). In 1995, he took early retirement to become a full-time writer. He currently consults with a number of companies on global corporate strategy, and is associated with a private equity fund.