Back to school

Posted by Ninad on May 10, 2010 under All Posts | Be the First to Comment

Here are some statistics from IDFC-SSKI research report on Indian Education (2009).

Government spends $ 30 billion on education every year
Citizens spend additionally $ 50 billion on private education
K-12 segment is worth $ 20 billion

So, do you want to start a school in India?

A school is a capital intensive business. In a city like Delhi or Mumbai, setting up a school for 1000 children on a 2 acre plot could cost anywhere between Rs. 15-20 crores.

In India, schools can be owned only by a not-for-profit trust or society or government.

Government has over 1 million schools and effectively runs the largest number of schools in the country.

There are a total of 75,000 private schools in India. Only a handful like the Delhi Public School (DPS) has more than 100 locations.

Given these intricacies, how are education entrepreneurs setting up schools?

They simply set up two legal structures. A company owns all the assets of the school and leases it to the trust for a fee. The trust runs the school and books all the expenses.

There are a plethora of new schools which have come up especially in the B and C class cities, where the cost dynamics are more favourable.

Given the big demand for good quality school education, new schools with spiffy facilities are bound to come up with this dual legal structure. Ultimately, this will mean a better choice to parents and their kids.�