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Education Sector in India

April, 2014


Education is the key to the task of nation-building. It is also well-accepted that providing the right knowledge and skills to the youth can ensure overall national progress and economic growth. The Indian education system recognises the role of education in instilling the values of secularism, egalitarianism, respect for democratic traditions and civil liberties and quest for justice.

A progressive higher education sector plays a predominant role in economic growth and development of a nation. India, being one of the largest networks of higher education system in the world, comprises about 700 universities and over 35,000 colleges, offering education and training facilities in almost all aspects of human creativity and intellectual endeavour. The country has an annual enrolment of over 25 million students (including enrolment under open and distance learning system).

India claimed 10 of the top 100 places in Times Higher Education's BRICS & Emerging Economies Rankings 2014—the world's first ranking of universities in Brazil, Russia, India, China and South Africa, as well as 17 other emerging economies.

Market Size

With a median age of 25 years, India has over 550 million people below the age of 25 years. According to Census figures, over 32 per cent of the 1.1 billion population is between the age group 0–14 years. This means that the number of people in India needing primary and secondary education alone exceeds the entire population of the US. Since these students will be seeking higher education in India over the next decade, it illustrates the sheer size of the Indian education market.

The private education sector is estimated to reach US$ 115 billion by 2018, according to consulting firm Technopak. Technopak sees enrollments in Kindergarten-12th grade (K-12) growing to 351 million, requiring an additional 34 million seats by 2018.

According to a report 'Education in India: Securing the demographic dividend', published by Grant Thornton, 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 per cent CAGR till 2020. At present, the sector witnesses spends of more than Rs 46,200 crore (US$ 7.68 billion), which is estimated to grow over Rs 232,500 crore (US$ 38.69 billion) in 10 years.


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

The sector has attracted foreign direct investments (FDI) worth Rs 4,736.88 crore (US$ 788.43 million) during April 2000 to September 2013, according to the data released by the Department of Industrial Policy and Promotion (DIPP).

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

  • Canada-based Ivey Business School and the Indian Institute of Management Calcutta (IIMC) have signed a five-year memorandum of understanding (MoU) to jointly develop and publish cases on India-relevant issues. The partnership will help both institutions to foster case-based teaching.
  • Institute of Finance and International Management (IFIM), Bengaluru, has joined hands with the UK’s Plymouth University to encourage interaction between faculty members and students in various academic and research activities.
  • Wipro has announced a US$ 2.8 million grant to nurture excellence in science and mathematics in the US through a multi-year fellowship programme. This initiative seeks to develop and inspire young people to contribute to excellence in science, technology, engineering and math (STEM) education, said Mr T K Kurien, CEO, Wipro.
  • The Institute of Management and Technology, Ghaziabad (IMTG) has joined hands with Arizona State University (ASU), US, to strengthen bilateral collaborations in business management education.
  • Google is expanding to India an initiative to popularise the use of its Chromebook laptops in schools, starting with a pilot project in four schools in collaboration with Department of Information Technology, Andhra Pradesh. The project will include using the Google Apps Training Center, an online learning environment that offers six modules.
  • InterGlobe Enterprises and CAE, a Canada-based civil and military aviation simulation training company, has launched India’s largest pilot simulation training facility in Greater Noida, Uttar Pradesh.

Government Initiatives

Dr Manmohan Singh, the Prime Minister of India, urged the country's private sector and industry to invest in enhancing education and research in the country, as India looks to increase its gross enrolment ratio to 30 per cent by 2020.

Government support for the sector has also seen a boost, with substantial reforms and increased financial outlays being announced and implemented. These reforms aim at not only strengthening the sector but facilitating planned expansion of the sector.

The following are some of the major initiatives taken by the government for the infrastructural development of the education sector:

  • Mr Patrick Suckling, the Australian High Commissioner to India, has announced that 42 Indian students and researchers have won Endeavour scholarships or fellowships to study in Australia.
  • The government has prepared the University Grants Commission (UGC) - Establishment and Operation of Campuses of Foreign Educational Institutions Rules, 2013. Under the proposed rules, Foreign Educational Institutions (FEIs) can set up campuses in India, once they have been notified as Foreign Education Provider (FEPs) by the UGC, subject to fulfilment of certain eligibility conditions.
  • 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) during the current Five Year Plan (2012–17).
  • India and Mauritius have signed two MOUs in order to boost educational ties. The first MoU is between IIT, Delhi and Mauritius Research Council for setting up of an International Institute of Technology Research Academy (IITRA) in Mauritius; and the second MoU is between Association of Indian Universities (AIU) and Tertiary Education Council (TEC) of Mauritius for mutual recognition of educational qualifications.
  • The Government of India plans to set up a framework of community colleges on the North American model, said Dr Shashi Tharoor, Minister of State for Human Resource Development, Government of India.

Road Ahead

India plans to enhance its formally skilled workforce through vocational education and training from the current 12 per cent to 25 per cent by 2017, thereby adding about 70 million people in the next five years. Hence, the higher education segment is expected to undergo intense changes and activities in terms of foreign partnerships and foreign players entering the market in the coming years, with Indian players rejuvenating and improvising their methodology, technology and course content to match the competition.

Exchange rate used INR 1= US$ 0.0166 as on April 9, 2014

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