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Education Sector in India

June, 2014

Brief Introduction

The late Nelson Mandela once said, “No country can really develop unless its citizens are educated.” Education plays an important part in the building of a nation. The Indian government realises its significance and hence has taken several initiatives and reforms over the years to impart education and instil the values of secularism, equality, respect for democracy and self-belief among its youth.

According to the rankings released by Quacquarelli Symonds (QS), 17 Indian universities have made it to the list of top 300 universities in the Asian continent. Also, the topmost Indian management institute, Indian Institute of Management, Ahmedabad (IIM-A) has been globally ranked the fourth-best overall among 20 leading B-schools, according to the Economist.

The education sector in India is at a vital stage of its growth. The vast diversity in ethnicities coupled with varying demographics has prompted different players to invest in the sector. Meanwhile, the upward surge in the Indian economy and consequent increase in income levels has aided the spending on education in the average Indian household.

Market Size

It is expected that the Indian education sector’s market size will increase to Rs 602,410 crore (US$ 100.23 billion) by FY 15 from Rs 341,180 crore (US$ 56.77 billion) in FY 12, due to the expected strong demand for quality education.

The present Indian higher education system comprises of about 700 universities and over 35,500 colleges. More than 85 per cent of these students are enrolled in bachelor's degree programmes and about one-sixth of all Indian students are enrolled in Engineering/Technology degree programmes.

To increase the percentage of students going for higher education to 30 per cent by 2020, India will need 800 more universities and another 35,000 colleges, according to the Ministry of Human Resource Development (HRD).

Investments

The interest of entrepreneurs and private equity players to invest in this sector is generated due to the fact that the sector is not affected much by recession and requires minimal working capital.

Some of the recent major investments in the education and training sector in India are as follows:

  • Tata Consultancy Services (TCS) has joined hands with the Indian Institutes of Management (IIMs) for a five-year contract of US$ 5 million to conduct the Combined Aptitude Test (CAT) examinations in India.
  • The Arya Vaidya Chikitsalayam and Research Institute, Coimbatore, and the University of Latvia have joined hands to offer Ayurvedic education programmes to Western medical graduates. The proposed education programme is expected to help Ayurveda get a stronger global footing.
  • Newcastle University, UK has announced that it will provide two Indian scholarships for undergraduates applying for entry into degree programmes in the Faculties of Humanities and Social Sciences, Science, Agriculture, and Engineering and Medical Sciences.
  • A collaboration has taken place between IIM-A and Massachusetts Institute of Technology (MIT), Harvard University, and University of California, Berkeley to conduct joint research projects to develop field water quality testing and filtration equipment, ambient pollution measuring products and mobile technologies for health purposes.
  • Pratt & Whitney (P&W) headquartered in Connecticut, USA has planned to set up an engine training centre at Hyderabad airport to train aircraft engineers and technicians on current and new engine models, which will be operational from 2015.
  • The University of Oxford has approached the Indian government seeking collaborations in medical technology research and training in order to address an acute shortage of biomedical engineers in the UK and evolve cost-effective models of healthcare delivery.
  • Indian Electrical and Electronics Manufacturers’ Association (IEEMA) joined hands with New York-based Institute of Electrical and Electronics Engineers (IEEE) in order to promote collaboration on various initiatives that include skill development and training in the electrical and electronics sectors and enrichment of technical and technological knowledge among the electrical and electronics fraternity in India.
  • IIT-Madras has established a centre for technology and policy to address development problems and help technology innovators work more effectively. The centre will enable consultation and networking with policy makers, industry, investors and various other stakeholders and will also play a role in the design, promotion and assessment of public policies imposed by technological and scientific innovations.

Government Initiatives

The following are some of the major initiatives taken by the Government of India for the development of the education and training sector:

  • To facilitate research in the securities market, Securities and Exchange Board of India’s (SEBI) Development Research Group has invited applications from academicians and researchers with more than 15 years of experience to undertake research on nine different topics.
  • India has signed a global treaty, the ‘Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled (MVT)’. This treaty will facilitate import of accessible format copies from the member states by Indian educational institutions, libraries and institutions working for the benefit of visually impaired persons.
  • The Ministry of Human Resource Development (MHRD) has proposed to provide for 5,000 faculty positions in higher education under the Rashtriya Uchchatar Shiksha Abhiyan (RUSA), under the current Five Year Plan (2012–17).
  • In order to promote higher education, the Government of India, through the Faculty Research Promotion Schemes (FRPS) of the University Grants Commission (UGC) offer research support to the University Science Faculties at three different levels.

Road Ahead

The currently drafted Five Year Plan proposes to provide inclusive and qualitative expansion of higher education in India. It also aims to propel the gross enrolment rate across levels; establish new entities; liberalise the sector, that is, allow private universities and foreign players; and take other measures including access enhancement so as to revive and sustain the demand for this sector.

Exchange rate used INR 1= 0.0166 as on June 27, 2014

References: Ministry of Finance, Press Information Bureau (PIB), Media Report, Ministry of Education, Department of Industrial Policy & Promotion (DIPP)