In India, education is the key to the task of nation-building. It is also a well-accepted fact that providing the right knowledge and skills to the youth can ensure the overall national progress and economic growth. The Indian education system recognizes the role of education in instilling the values of secularism, egalitarianism, respect for democratic traditions and civil liberties and quest for justice.
There is a huge demand for upgradation of education as India is expected to have a surplus of 47 million people in the working age group by 2020. As a result, both the formal education sector (including K-12 and higher education) as well as informal sector (including coaching institutions, pre-schools and vocational institutions) are witnessing rapid growth.
The market size of Indian education sector is expected to increase to Rs 602,410 crore (US$ 95.80 billion) by FY15 on back of strong demand for quality education, according to a report by India Ratings. Indian education sector’s market size in FY12 was estimated to be Rs 341,180 crore (US$ 54.20 billion). The sector grew at a compounded annual growth rate (CAGR) of 16.5 per cent during FY05-FY12.
India's online education market size is set to grow to US$ 40 billion by 2017 from the present US$ 20 billion, said Mr Anil Sonkar, Chief Technology Officer (CTO), LoudCloud Systems.
The private education sector is estimated to reach US$ 70 billion by 2013 and US$ 115 billion by 2018, according to a consulting firm Technopak. Realising the fast growth of education sector in India, many private companies are looking for relevant acquisitions and alliances in this space. Major investments are being seen in the areas of pre-schools, private coaching and tutoring, teacher training, the development and provision of multimedia content, educational software development, skill enhancement, IT training and e-learning.
The education sector in India is also considered as one of the major areas for investments as the entire education system is going through a process of overhaul, according to a report ‘Emerging Opportunities for Private and Foreign Participants in Higher Education’ by PricewaterhouseCoopers (PwC).
The education sector has attracted foreign direct investments (FDI) worth Rs 4,483.06 crore during April 2000 to July 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:
The Central Government plays a vital role in the evolution and monitoring of educational policies and programmes.
Some of the initiatives taken by the government for the infrastructural development of education sector include:
The Government of India has set itself an aggressive target of achieving 30 per cent gross enrolment ratio (GER) in higher education by 2020, which translates into doubling the GER in the next eight years.
The private sector’s role in the higher education sector has been growing at a rapid pace over the last decade and needs to further expand at an accelerated rate in order to achieve the GER target.
PPP can revolutionise education in India and facilitate growth. They can raise the standards of education provision in India and help meet the demand for quality education from a growing middle class with increasing incomes.
Digitisation and adoption of information and communication technology (ICT) is modernising the traditional way of classroom learning. The Government of India plans to invest US$ 20 billion on ICT and vocational training in the 12th Five Year Plan.
The number of people entering the Indian higher education sector is growing at a significant rate. According to MHRD data, enrolments have increased from 15.5 million (GER of 12.4 per cent) in 2006-07 to 17.3 million (GER of 15 per cent) in 2009-10. These figures also reflect an increasing number of young working-age people who continue in the education system instead of dropping out. The number of people in the age bracket of 15-24 years enrolled in educational institutes grew from approximately 30 million in 2004-05 to over 60 million in 2009-10. These trends present a huge opportunity for private and foreign sector players looking to provide quality education and services in this sector.
Exchange rate used INR 1= US$ 0.015 as on September 24, 2013
References: Ministry of Finance, Press Information Bureau (PIB), Media Report, Ministry of Education, Department of Industrial Policy & Promotion (DIPP)