Education is one of the most important requirements for a nation. The Government of India realises its importance and hence has taken several initiatives to boost the growth of this sector, including setting up of several universities, deregulating policies and making significant pacts with foreign nations.
A Deloitte study has recognised the Indian education sector as a 'sunrise sector' for investments. This is because this sector offers huge potential to investors in the regulated as well as non-regulated markets. The vast diversity in ethnicities coupled with varying demographics has prompted different players to invest in the sector.
The education sector in India is making rapid strides towards providing quality education. Ten Indian institutes have made it to the top 100 in the Asia University Rankings 2014 published by Times Higher Education as compared to three in 2013. Also recently, Indian Institute of Management Bangalore (IIM-B) became the first B-school from India to join edX as a new 'Contributing Member'.
According to a report by rating agency CARE Ltd, the market size of the Indian education industry was pegged around Rs 3.83 trillion (US$ 62.34 billion) in FY14. Higher education contributes 59.7 per cent of the market size, school education 38.1 per cent, pre-school segment 1.6 per cent, and technology and multi-media the remaining 0.6 per cent.
Presently, India has around 1.4 million schools and more than 35,000 higher education institutes. It has also been estimated that more than 85 per cent of the students are enrolled in bachelor's degree programmes and about one-sixth of all Indian students are enrolled in Engineering/Technology degree programmes.
According to the Department of Industrial Policy and Promotion (DIPP), the Indian education sector received foreign direct investment (FDI) amounting to US$ 960.82 million in the period April 2000 - July 2014. The deregulation of FDI norms has also encouraged many foreign institutions to come and establish vocational training institutes in the country.
As private universities look to invest in the Indian higher education system, they have ushered in a wave of big money. Some notable names include Ashoka University, Shiv Nadar University, BML Munjal University, OP Jindal Jindal Global University, and many more.
Some of the other noteworthy investments in the recent past in the education and training sector are as follows:
The Government of India has allocated Rs 500 crore (US$ 81.38 million) in the Union Budget 2014-15 to set up five more IITs in Jammu and Kashmir, Chhattisgarh, Goa, Andhra Pradesh and Kerala; and five new IIMs in Himachal Pradesh, Punjab, Bihar, Odisha and Maharashtra.
Various state governments have also changed their laws to attract private funds into education. For instance, the Uttar Pradesh government established the Amity, Sharda and the Galgotias universities by amending state laws.
Some of the other recent initiatives taken by the government in recent times are as follows:
With the government allocating funds for the setting up of IITs and IIMs in new locations in the recently announced Union Budget 2014-15 and foreign companies investing heavily to establish education and training institutes in the country, the future of this sector in the next few years seems bright. In the search of quality education, the current Five-Year Plan proposes to provide inclusive and qualitative expansion of higher education in India.
Exchange rate used INR 1= 0.0162 as on September 26, 2014
References: Ministry of Finance, Press Information Bureau (PIB), Media Report, Ministry of Education, Department of Industrial Policy & Promotion (DIPP)