India holds an important place in the global education industry. The country has more than 1.4 million schools with over 227 million students enrolled and more than 36,000 higher education institutes. India has one of the largest higher education systems in the world. 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$ 2-3 billion, and is expected to touch US$ 40 billion by 2017. The distance education market in India is expected to grow at a Compound Annual Growth Rate (CAGR) of around 34 per cent# during 2013-14 to 2017-18. 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.
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. In FY 2015-16, the education market was worth about US$ 100 billion and is expected to reach US$ 116.4 billion in FY 2016-17. Currently, 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.
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. At present, higher education sector witnesses spending of over Rs 46,200 crore (US$ 6.78 billion), and it is expected to grow at an average annual rate of over 18 per cent to reach Rs 232,500 crore (US$ 34.12 billion) in next 10 years.
India’s IT firms are working with academic institutions and setting up in-house institutes to groom the right talent as these companies move to Social Media, Mobility, Analytics and Cloud (SMAC) technologies.
The total amount of Foreign Direct Investments (FDI) inflow into the education sector in India stood at US$ 1,256 million from April 2000 to March 2016, 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 Government of India aims to increase digital literacy to at least 50 per cent of Indians from currently 15 per cent over a period of next three years.
- Training and skills development firm NIIT has partnered with US-based edX to offer online courses from leading international universities including MIT and Berkeley to about 5 lakh people over the next three years.
- Byju’s, an education technology start-up, has raised US$ 50 million from the Chan Zuckerberg Initiative, founded by Facebook founder Mark Zuckerberg, and existing investors Sequoia Capital, Sofina SA, Lightspeed Venture Partners and Times Internet Ltd.
- India and Germany have signed an agreement on vocational education and skill development with a budget of US$ 3.37 million, which will help create and improve cooperative workplace-based vocational training in India’s industrial clusters.
- Cisco Systems plans to invest US$ 100 million in India over the next 2 years, will be used to fund early-stage and growth-stage companies in the country, open six new innovation labs, three centres of expertise and train around 250,000 students by 2020.
- Neev Knowledge Management Pvt. Ltd, which offers online and classroom-based certification courses under the brand name EduPristine, has raised US$ 10 million from Kaizen Management Advisors and DeVry Inc., which will be used to increase its course offerings, and increase its presence to 15 cities across the country.
- BRS Ventures & Holdings Ltd, owned by Abu Dhabi-based billionaire Mr B R Shetty, plans to invest US$ 1.8 billion in Amaravati in the state of Andhra Pradesh across projects in healthcare, tourism, hospitality, infrastructure, and education sector.
- Byju’s, an education technology start-up, has raised US$ 75 million from US-based venture capital firm Sequoia Capital and Belgium-based investment firm Sofina, which will be used to improve content delivery, expand product pipeline, launch in new markets and continue to build its talent pool.
- US based multinational technology major Intel Corporation, has partnered with Extramarks Education, a digital learning solutions provider, to tap the US$ 40 billion private school sector in India and thereby provide optimised learning solutions and extend computing technologies to students and schools in the country.
- EdCast, a technology education start-up based in Silicon Valley, plans to invest up to US$ 50 million in education based technology and tie-up with around 500 educational institutions to build digital content and curriculum for educational institutions in India.
- Tata Trusts, part of the Tata Group, has entered in to a strategic partnership with web-based free learning portal, Khan Academy, and seeks to use technology to provide free education to anyone, anywhere in India.
- Venture capital fund Acumen has invested in two Hyderabad-based education start-ups—Ignis Careers (US$ 250,000) and SEED (US$ 650,000)—working in the low-cost school education space.
- Anuna Education, a partner to National Skills Development Corporation (NSDC) has announced the eEntrepreneurship Program in collaboration with eBay India. Anuna Education will train entrepreneur to sell their products on eBay globally in collaboration with eBay India along with a practical training on how to sell the products to global buyers.
- The Confederation of Indian Industry (CII) has launched Strategic Manufacturing Skill Council (SMSC) to train workforce for defence equipment manufacturing, ship building and repair, homeland security equipment and other firefighting equipment.
- The Central Board of Secondary Education (CBSE) has mandated the appointment of a special educator for children with learning disabilities so that they could be assimilated with other students. This directive came as a part of “inclusive practices” philosophy of CBSE and strict guidelines of ‘Right to Education” Act.
- In an attempt to improve health care infrastructure in West Bengal, nine new medical colleges will be opened, out of which five will be government-run while the other four will be set up under the Public Private Partnership (PPP) model.
Some of the other major initiatives taken by the Government of India are:
- The Union Budget 2016-17 has made the following provisions for the education sector:
- 10 public and 10 private educational institutions to be made world-class
- Scheme to get Rs 500 crore (US$ 73.36 million) for promoting entrepreneurship among Schedule Caste/Scheduled Tribe (SC/ST)
- Digital Repository for all school leaving certificates and diplomas
- Rs 1,000 crore (US$ 146.72 million) allocated for higher education financing
- Rs 1,700 crore (US$ 250 million) allocated for 1500 multi-skill development centres
- 62 new Jawahar Navodaya Vidyalayas (JNV) to provide quality education
- Digital literacy scheme to be launched for covering six crore additional rural households
- Objective to skill one crore youth in the next three years under the Pradhan Mantri Kaushal Vikas Yojna (PMKVY)
- The Government of India has announced plans to digitise academic records such as degrees, diplomas, mark sheets, migration certificate, skill certificate, etc from secondary to tertiary-level institutions into a National Academic Depository (NAD).
- The Government of India plans to set up an advanced research and training institute in chemical engineering, which will offer support services to businesses in technology, design and testing and will train engineers and scientists through its various centres in different parts of the country.
- The Government of India has signed a financing agreement with The World Bank, for International Development Association (IDA) credit of US$ 300 million, for the Madhya Pradesh Higher Education Quality Improvement Project, which aims to improve student outcomes, especially of disadvantaged groups in selected Higher Education Institutions (HEIs) and increase the effectiveness of the higher education system in Madhya Pradesh.
- The Human Resource Development (HRD) Ministry has entered into a partnership with private companies, including Tata Motors Ltd, Tata Consultancy Services Ltd and real-estate firm Hubtown Ltd, to open three Indian Institutes of Information Technology (IIITs), through Public-Private Partnership (PPP), at Nagpur, Ranchi, and Pune.
- 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 and it includes incentivising skill training by providing financial rewards on completion of training to the participants. Over the next year 2.4 million Indians are believed to be benefitted from this scheme.
- National Policy for Skill Development and Entrepreneurship 2015 is India’s first integrated program to develop skill and promote entrepreneurship simultaneously. The vision of this programme is to skill the Indian youth rapidly with high standards and at the same time promote entrepreneurship thus creating wealth and gainful employment for the citizens.
- Skill Loan Scheme is designed to disburse loans of Rs 5,000 (US$ 75.3) to Rs 150,000 (US$ 2,260) to 3.4 million Indians planning to develop their skills in the next five years.
- The National Skill Development Mission is developed to expedite the implementation of skilling activities in India by providing robust institutional framework at the centre and the state.
- India and Australia have signed a Memorandum of Understanding (MoU) to boost partnerships between the two countries in the fields of higher education and research, including technical and professional education, schools, vocational education and training.
- The National Skill Development Corporation of India (NSDC) under a Public Private Partnership promoted by the Ministry of Finance, Government of India signed a Memorandum of Understanding with Center for Research & Industrial Staff Performance (CRISP), India to explore national and international opportunities for strengthening skills development in India.
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$ 0.0149 as on September 28, 2016
References: Media Reports, Press Releases, Press Information Bureau, RNCOS Report, Department of Industrial Policy and Promotion (DIPP), Union Budget 2016-17
Note: # – As per report ‘Booming Distance Education Market Outlook 2018’, by Business Consultancy Services firm RNCOS