Indians buy bonds for study overseas

The clamour for a foreign university degree has triggered a boom in education bonds to enable Indian parents to send their children overseas.

After a "lock-in period" of 15 to 20 years, the bonds guarantee hefty returns by the time the child is ready to enter college in the United States or the United Kingdom - the most popular destinations for Indian students.

Nearly a dozen schemes have been floated by insurance companies, banks and investment agencies.

Under one scheme, an investment of Rs50,000 (roughly Pounds 200) would yield Rs1 million after 21 years. There is a host of options tailored to various age groups, including the "unborn".

Tapan Jha, an entrepreneur, says he invested in Unit Trust of India's Children's Gift Growth Fund when his son was seven. When the policy matures next year his investment will have multiplied 23 times - more than enough to send the child to college abroad. Financial companies are using such success stories to promote their schemes.

According to an official estimate, during 1997-98 Indians spent nearly Pounds 3 billion on sending their children abroad for higher education. The US embassy alone issued more than 30,000 visas.