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Education & Training Industry in India

March, 2018

Introduction

India holds an important place in the global education industry. The country has more than 1.5 million schools with over 260 million students enrolled and about 751 universities and 35,539 colleges. India has one of the largest higher education systems in the world. Around 35.7 million students were enrolled in higher education in India during 2016-17.However; there is still a lot of potential for further development in the education system.

India has become the second largest market for e-learning after the US. The sector is currently pegged at US$ 2 billion and is expected to reach US$ 5.7 billion by 2020. The distance education market in India is expected to grow at a Compound Annual Growth Rate (CAGR) of around 11 per cent# during 2016-2020. Moreover, the aim of the government to raise its current gross enrolment ratio to 30 per cent by 2020 will also boost the growth of the distance education in India.

Market Size

The education sector in India is poised to witness major growth in the years to come as India will have world’s largest tertiary-age population and second largest graduate talent pipeline globally by the end of 2020. The education market in India is currently valued at US$ 100 billion and is expected to nearly double to US$ 180 billion by 2020.* Currently, the school segment is valued at US$ 52 billion and contributes 52 per cent to the education market in India, higher education contributes 15 per cent of the market size, text-book, e-learning and allied services contribute 28 per cent and vocational education in manufacturing and services contributes 5 per cent. Higher education system in India has undergone rapid expansion. Currently, India’s higher education system is the largest in the world enrolling over 70 million students while in less than two decades, India has managed to create additional capacity for over 40 million students. It witnesses spending of over Rs 46,200 crore (US$ 6.93 billion).

Investment/Recent developments.

The total amount of Foreign Direct Investments (FDI) inflow into the education sector in India stood at US$ 1.64 billion from April 2000 to September 2017, according to data released by Department of Industrial Policy and Promotion (DIPP).

The education and training sector in India has witnessed some major investments and developments in the recent past. Some of them are:

  • The Indian Institute of Technology, Delhi has been ranked 145 in the Global University Employability Ranking 2017, based on hiring by top companies.
  • India has signed a loan agreement with World Bank under 'Skills Acquisition and Knowledge Awareness for Livelihood Promotion' (SANKALP) Project to enhance institutional mechanisms for skills development.
  • Singapore is going to open its first skill development centre in Assam, which will provide vocational training to youth in the region.
  • Dabur India Ltd has opened a skill development centre for women in Dhekidol village in the state of Assam, that will provide rural women with improved employment and self-employment opportunities.

Government Initiatives

Some of the other major initiatives taken by the Government of India are:

  • The allocation for school education under the Union Budget 2018-19 is expected to increase by 14 per cent, to focus on accelerating existing schemes and quality improvement.
  • The state of Uttar Pradesh is set to have about 5,000 state government-run English medium primary schools which are expected to start functioning from the next academic year, stated Ms Anupama Jaiswal, Minister of State for Basic Education, Government of Uttar Pradesh.
  • In order to boost the Skill India Mission, two new schemes, Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) and Skill Strengthening for Industrial Value Enhancement (STRIVE), have been approved by the Cabinet Committee on Economic Affairs (CCEA), Government of India, with an outlay of Rs 6,655 crore (US$ 1.02 billion) and will be supported by the World Bank.
  • India's first Pradhan Mantri Kaushal Kendra (PMKK) for Skilling in Smart Cities has been inaugurated by the Ministry of Skill Development and Entrepreneurship, Government of India in partnership with New Delhi Municipal Council (NDMC) with the purpose of increasing the pace of skilling through collaboration.
  • The Government of India is working towards improving the doctor population ratio and has added over 5,800 PG seats in government medical colleges this year, according to Mr Ashwini Kumar Choubey, Minister of State (Health and Family Welfare), Government of India.
  • The Government of India has signed a Financing Agreement with the World Bank for IDA credit of US$ 125 million for the “Skills Strengthening for Industrial Value Enhancement Operation (STRIVE) Project”.
  • NITI Aayog is launching the Mentor India Campaign which will bring leaders and students together at more than 900 Atal Tinkering Labs in India, as part of the Atal Innovation Mission. Moreover, it has selected 1,500 additional schools across India for establishing Atal Tinkering Labs (ATLs) under the Government of India's flagship programme, Atal Innovation Mission (AIM).
  • The Government of India will spend around Rs 20,000 crore (US$ 3.10 billion) to build six new Indian Institutes of Technology (IITs) by March 2024, of which Rs 7,000 crore (US$ 1.08 billion) will be spent by March 2020.
  • The Government of India has approved an all-time record of over 4,000 post-graduation (PG) medical seats to be added in various medical colleges and hospitals for the academic session 2017-18, said Mr J P Nadda, Union Minister of Health and Family Welfare.
  • The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved 'Pradhan Mantri Gramin Digital Saksharta Abhiyan' (PMGDISHA) to make 60 million rural households digitally literate. The outlay for this project is Rs 2,351.38 crore (US$ 353.70 million) to usher in digital literacy in rural India by March, 2019.
  • Prime Minister Mr Narendra Modi launched the Skill India initiative – ‘Kaushal Bharat, Kushal Bharat’. Under this initiative, the government has set itself a target of training 400 million citizens by 2022 that would enable them to find jobs. The initiatives launched include various programmes like: Pradhan Mantri Kaushal Vikas Yojana (PMKVY), National Policy for Skill Development and Entrepreneurship 2015, Skill Loan scheme, and the National Skill Development Mission.
    • PMKVY is the flagship program under the Skill India Initiative. The Union Government plans to set up skill development centres across India with an investment of Rs 12,000 crore (US$ 1.8 billion) to create job opportunities for 10 million individuals by 2020 under PMKVY, as per Mr Bandaru Dattatreya, Minister of Labour and Employment.
    • National Policy for Skill Development and Entrepreneurship 2015 is India’s first integrated program to develop skill and promote entrepreneurship simultaneously. The Union Government plans to provide Rs 7,000 crore (US$ 1.05 billion) to states to spend on skill development, and thereby accelerate the ambitious task of skilling 500 million Indians by 2022, and encourage creation of an ecosystem of entrepreneurs.
    • The National Skill Development Mission has created an elaborate skilling eco-system and imparted training to 7.6 million youth since its launch in 2015 and the government now plans to set up 1,500 Multi Skill Training Institutes across the country.

Road Ahead

In 2030, it is estimated that India’s higher education will:

  • Adopt transformative and innovative approaches in Higher education.
  • Have an augmented Gross Enrolment Ratio (GER) of 50 per cent
  • Reduce state-wise, gender based and social disparity in GER to 5 per cent.
  • Emerge as a single largest provider of global talent, with one in four graduates in the world being a product of the Indian higher education system.
  • Be among the top 5 countries in the world in terms of research output with an annual R&D spent of US$ 140 billion.
  • Have more than 20 universities among the global top 200.

Various government initiatives are being adopted to boost the growth of distance education market, besides focussing on new education techniques, such as E-learning and M-learning.

Education sector has seen a host of reforms and improved financial outlays in recent years that could possibly transform the country into a knowledge haven. With human resource increasingly gaining significance in the overall development of the country, development of education infrastructure is expected to remain the key focus in the current decade. In this scenario, infrastructure investment in the education sector is likely to see a considerable increase in the current decade

Moreover, availability of English speaking tech-educated talent, democratic governance and a strong legal and intellectual property protection framework are enablers for world class product development, as per Mr Amit Phadnis, President-Engineering and Site Leader for Cisco (India).

The Government of India has taken several steps including opening of IIT’s and IIM’s in new locations as well as allocating educational grants for research scholars in most government institutions. Furthermore, with online modes of education being used by several educational organisations, the higher education sector in India is set for some major changes and developments in the years to come.

Exchange Rate Used: INR 1 = US$ 0.015 as of January 4, 2018.

References: Media Reports, Press Releases, Press Information Bureau, RNCOS Report, Department of Industrial Policy and Promotion (DIPP), Union Budget 2017-18

Note: # – As per the report ‘Distance Learning Market in India 216-2020’ by Technavio, ## - According to data from Venture Intelligence, * - According to a 2016 report by Technopak