Education in India

The Indian education system, considered as one of the largest in the world, is divided into two major segments of core and non-core businesses. While, schools and higher education comprise the core group, the non-core business consists of pre-schools, vocational training and coaching classes.

The education sector in India is also considered as one of the major areas for investments as the entire education system is going through a process of overhaul, according to a report ‘Emerging Opportunities for Private and Foreign Participants in Higher Education’ by PricewaterhouseCoopers (PwC).

India has emerged as a strong potential market for investments in training and education sector, due to its favourable demographics (young population) and being a services-driven economy.

The private education sector is estimated to reach US$ 70 billion by 2013 and US$ 115 billion by 2018, according to consulting firm Technopak. Technopak sees enrollments in K-12 growing to 351 million, requiring an additional 34 million seats by 2018. This equals US$ 80 billion at US$ 2400 a seat.

According to a report 'Education in India: Securing the demographic dividend,' published by Grant Thorton, the primary and secondary education, or K-12 sector is expected to reach US$ 50 billion in 2015 from US$ 24.5 billion in 2008, growing at an estimated compound annual growth rate (CAGR) of 14 per cent.

Further, according to the report '40 million by 2020: Preparing for a new paradigm in Indian Higher Education' released by Ernst & Young, the higher education sector in India is expected to witness a growth of 18.0 per cent CAGR till 2020. At present, the sector witnesses spends of more than Rs 46,200 crore (US$ 8.38 billion), which is estimated to grow at an average rate of more than 18.0 per cent to over Rs 232,500 crore (US$ 42.17 billion) in 10 years.

According to a report 'Education in India: Securing the demographic dividend,' published by Grant Thorton, the primary and secondary education, or Kindergarten-12^th grade (K12) sector is expected to reach US$ 50 billion in 2015 from US$ 24.5 billion in 2008, growing at an estimated Compound Annual Growth Rate (CAGR) of 14 per cent.

Further, according to the report '40 million by 2020: Preparing for a new paradigm in Indian Higher Education' released by Ernst & Young, the higher education sector in India is expected to witness a growth of 18.0 per cent CAGR till 2020. At present, the sector witnesses spends of more than Rs 46,200 crore (US$ 10.4 billion), which is estimated to grow at an average rate of more than 18.0 per cent to over Rs 232,500 crore (US$ 52.5 billion) in 10 years.

The vocational segment has emerged as a US$ 2.6 billion market that is expected to grow rapidly into one worth US$ 3.6 billion by 2012, growing by a CAGR of 25 per cent, according to a report 'Education in India: Securing the demographic dividend,' published by Grant Thorton.

India needs 1.2 million more teachers under the Right to Education Campaign, according to Mr. Kapil Sibal, Union Minister for Human Resource and Development. He also added that with 546 million people under 25 years of age, there is huge potential in India in the education sector that needs to be tapped. By 2020, to increase the percentage of students going for higher education from the present 12.4 per cent to 30 per cent in the country, India will need 800 more universities and another 35,000 colleges, according to Mr Sibal.

The country's fast-growing education sector holds a potential to attract a US$ 100 billion investment over the next five years driven by demand for skilled professionals and need for infrastructure development, according to experts, such as KPMG.

As per a report released by research firm RNCOS, the annual student enrolments for higher education are expected to grow at a CAGR of nearly 8.7 per cent during 2010-11 to 2012-13 and will require huge investments for developing the infrastructure. The report states that sky rocketing economic growth will require huge number of engineers and management graduates which mandate infrastructural development to address the demand. Entry of foreign universities would not only intensify the competition, but also provide an international platform to the Indian students where they can achieve quality learning.

The Central Government plays a vital role in the evolution and monitoring of educational policies and programmes.

Some of the initiatives taken by the Government for the infrastructural development of education sector are:

• Spices Board India has decided to partner with Confederation of India Industry (CII) and US Food and Drug Administration (USFDA) to set up a collaborative training centre for food safety and supply chain management
• The Ministry of Human Resource Development plans to set up ten community colleges in collaboration with the Government of Canada. The Government of India has decided to set up hundred community colleges this year
• The Government of Gujarat plans to set up a farming educational institute in collaboration with Israel, offering post-graduation and PhD programmes with practical training and degree from Israeli universities
• The Government of India plans to set up an Indian Institute of Agricultural Biotechnology at Ranchi with an investments of Rs 287.50 crore (US$ 54.4 million). The Institute will be a deemed university and will have different schools to import knowledge in genomics, bioinformatics, genetic engineering, nano biotechnology, diagnostics and prophylactics and basic and social sciences and commercialisation
• For the year 2012-13, Rs 25,555 crore (US$ 4.63 billion) have been allotted for RTE-SSA (Right to Education - Sarva Shiksha Abhiyan) which represents an increase of 21.7 per cent over the previous year allotment in 2011-12
• 6,000 schools have been proposed to be set up at block level as model schools in the Twelfth Five Year Plan (2012-17)
• Rs 3,124 crore (US$ 566.69 million) has been provided for the RMSA (Rashtriya Madhyamik Shiksha Abhiyan), which is an increase of 29 per cent over 2011-12
• India and Republic of Korea have signed a memorandum of understanding (MoU) for cooperation in the field of education
• Prime Minister's fellowship scheme for doctoral research has been launched in New Delhi by Mr S Jaipal Reddy, Union Minister for Science and Technology, according to Confederation of Indian Industry (CII)

The Medical Council of India (MCI), a state body that regulates the medical education sector and registers doctors, has allowed hospital chains such as Fortis Healthcare, Max Healthcare and Apollo Hospitals to set up medical colleges. The Centre has also said that medical education would remain separate from general education and would not come under the jurisdiction of the National Council for Higher Education and Research (NCHER).

The education sector received a hike of about 18 per cent in the budgetary allocation for 2012-13 with a plan outlay of Rs 61,427 crore (US$ 10.92 billion) in which 22 per cent increase has been announced for the Sarva Siksha Abhiyan. Rs 15,458 crore (US$ 2.74 billion) has been earmarked for higher education while school education has received Rs 45,969 crore (US$ 8.17 billion).

During the Union Budget 2012-13, the Finance Minister also announced setting up of 6,000 model schools at the block level to benchmark excellence. Of these, 2,500 will be set up under private public partnership (PPP) mode.