Posted by Ninad on May 10, 2010 under All Posts | 
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.�
Posted by Ninad on May 3, 2010 under All Posts |
Currently, around 14 million students attend college. However, given the robust annual growth of GDP of more than 9 per cent, it is estimated that India will need to send 22 million students to college in the year 2014.
Mr. Kapil Sibal, Union Minister for HRD has mentioned that he wants to send 30 per cent of India’s college-going-age kids to college. This would mean 30 million more students going to colleges.
India presently has around 350 universities and the National Knowledge Commission has stated that India needs around 1,500 universities.
In 2008, it is estimated that India had around 340 million people in the age group of 25-50 year olds who did not have a college degree. This is expected to rise to 380 million by the year 2014.
Setting up a good quality university is highly capital intensive and time consuming. Although foreign universities are likely to be allowed to come to India; at best, they will meet a fraction of this demand.
So, what is the future of those students who seek a good quality college degree and are unable to get it?
The yawning gap between demand and supply will ensure that aspirants for prestigious institutions like IIT and IIM will be on the rise for many years to come.
If this huge gap is to be met, shouldn’t the government look at changing its model and allowing for-profit institutions in the education sector?
Posted by Ninad on September 22, 2009 under All Posts |
Education is a regulated sector across the world. Most countries do not easily allow foreign universities to operate in their country and if they do allow, it is done with a lot of regulations.
In India, The Foreign Education Providers (Regulation) Bill has been waiting in the wings since 2007.
The Bill seeks to regulate the entry, operation and maintenance of foreign education providers.
It has been reported that Kapil Sibal, Education Minister has cleared the draft of Foreign Education Providers (Regulation) Bill and it will be placed before the Union Cabinet soon.
Once cleared by the Parliament, foreign universities will be able to offer degree programmes independently in India.
Presently, there are many foreign universities offering degree courses in India in partnership with local universities. Once the Bill is passed, foreign universities will be able to offer independent degrees, without the need to tie up with a local university.
The raison d’etre for this bill is that it will save millions of dollars as Indian students will be able to study in foreign universities while staying in India. More than 250,000 students from India are studying in various universities outside India.
Students will still travel abroad to get a holistic education experience –- after all, education is much more than a degree. Hence, it is unlikely to save foreign exchange.
Foreign universities operating in India will allow students who cannot afford to travel abroad to get the same degree in India. To that extent, it will cater to a different category of students.
If foreign universities start operating in India, it will give students a choice and expand higher education offerings in India. There is a huge gap in the demand and supply in higher education and foreign universities will fill some part of this gap. Hopefully, some of these foreign universities will also improve the culture of research in India.
Kapil Sibal has mentioned that some of the best universities in the world are waiting in the wings to set up shop in India. One only hopes that good quality education is provided by foreign universities and India does not become a happy hunting ground for mediocre universities.
We will have to wait for the details of the Bill. However, if it does become a law, it will augur well for the Education sector in India. Students in India will get a far better choice and competitive pressures will also improve the quality of the present education providers in India.
The good old days of getting a degree from Oxford University only in Oxford may be over — it might soon be available in Pune!
Posted by Ninad on August 5, 2009 under All Posts |
One of the ways in which India’s soft power in education can be significantly enhanced is by becoming a global hub for higher education.
The US and the UK realized the importance of this and opened its doors to foreign students in the 20th century. Over the years, many of the universities in these countries have acquired a global reputation attracting students from around the world.
My elder son, Saahil, studies in an undergraduate program in the US. When I first visited the university, I was struck by the size and scale of the University and more importantly, by the diversity of students.
Other countries like Australia and Singapore have realized the importance of this and are trying to emulate the success of the US and the UK.
India has never actively promoted this. There are around 15,000 foreign students enrolled in colleges and universities in India. Malaysia has around 100,000 foreign students and China has set itself a target of 300,000 students by 2020.
India has some natural advantages to attract students.
- Cost: In the US and UK, annual tuition fees in a good university exceeds $30,000 per year. In India, it would be less than $ 10,000 per year. Add to that is the advantage of low cost of living and a student could save a substantial amount of money.
- English: In India, most of the universities teach in English and the entire ecosystem is capable of handling English speaking students
With these advantages, India can attract many students from emerging economies in Africa and Asia.
However, this will not happen easily.
Colleges and Universities will need to upgrade their present infrastructure, improve the quality of teaching, make their course curriculum more contemporary and also take pro-active steps to attract foreign students and make them comfortable on Indian campuses.
India has the potential to become a global education hub and also rival Bollywood with education as a soft power!
Posted by Ninad on July 16, 2009 under All Posts |
US President, Barrack Obama has been quoted in today’s papers as saying that he is laying the foundation of an education system that would help America compete with China and India in the 21st century.
In the same paper, Kapil Sibal, Education Minister of India, has been quoted as making a strong pitch for private investment and foreign universities.
What’s happening? The US wants to emulate India and India wants to emulate the US !!!
Both the countries have different needs. India needs huge funds to sustain higher education and the government cannot fund all these needs. They have to look for the PPP model (private public partnership) and also open up the sector for foreign universities. Once this is opened, it will, hopefully, bridge the huge gap between demand and supply and also ensure that the quality of education available to students improves dramatically. With more providers and more facilities, students will have a choice and everyone will benefit. There is still so much gap between demand and supply that India can easily accommodate some foreign universities provided they are willing to set up shop in India.
In US, there is a different problem. The country simply needs more graduates. President Obama is hoping that the reform plan will ensure that an additional five million Americans earn degrees and certificates in the next decade. If this gap for graduates in US is not filled, graduates from China and India will come to the US and take these jobs. Hence, the strong desire to have Americans pursue graduation.
It is really interesting and coincidental that statements by leaders from both countries have come on the same day which seems conflicting. Actually, they are not. They are two sides of the same coin.
Posted by Ninad on July 7, 2009 under All Posts |
The Finance Minister, Pranab Mukherjee, presented the Union Budget in the Parliament on 6th July, 2009. He has twice quoted Kautilya in his Budget speech.
Since the Finance Minister has quoted Kautilya, I am also reproducing Kautilya’s quote on Education:
“Education is the best friend. An educated person is respected everywhere. Education beats beauty and youth.”
For the Education and training industry, there are some positive signals.
This is one of the few Budgets where the Finance Minister has mentioned the Education sector. This was never really mentioned in previous Budgets.
The Finance Minister has mentioned the following points for he Education sector in his Budget:
- National Mission for Female Literacy to be launched , with focus on minorities, SC, ST and other marginalised groups with the aim of reducing the current level of female illiteracy to half, in three years
- A new scheme to be introduced to provide full interest subsidy during the period of moratorium for educational loans for higher education, which will cover 5 lakh students.
- ‘Mission in Education through ICT’ has been substantially increased to Rs.900 crore. Provision for setting up and up-gradation of Polytechnics under the Skill Development Mission has been increased to Rs.495 crore. One Central University will be set up in each uncovered State, for which Rs.827 crore has been allocated. Rs.2,113 crore has been allocated for IITs and NITs, which includes a provision of Rs.450 crore for new IITs and NITs. The overall Plan budget for higher education is proposed to be increased by Rs.2,000 crore over Interim Budget Estimates.
- Section 80E of the Income-tax Act provides for a deduction in respect of interest on loans taken for pursuing higher education in specified fields of study. The Budget has proposed to extend the scope of this provision to cover all fields of study, including vocational studies, pursued after completion of schooling.
There were a lot of expectations of some bold measures for the Education sector. The Finance Minister has touched upon some of them, which are good.
We need to have a stronger financial framework for students who need finance. A meritorious student is not assured of education loans. A capable student who does not have financial means may need to drop out of the education system if he does not get finance for his education. This should hopefully start changing with the new measures mentioned in the Budget.
Also, the Finance Minister has shown the clear intent of the government to ensure that education becomes inclusive and students, who are unable to access the education infrastructure, will now be assisted by the government.
In his Budget speech, the Finance Minister has mentioned that investment in infrastructure is critical for the economy. Wouldn’t it have been nice if the Finance Minister had declared Education as an Infrastructure sector?
Posted by Ninad on July 6, 2009 under All Posts |
Infrastructure industries normally cover ports, roads, bridges, etc. Some of the characteristics of an infrastructure industry are – large upfront investment, long gestation period and long term benefits.
Investment in an Educational institution has similar traits. It requires upfront investment in a property and added facilities as well; returns take a long time and benefits to society range over a long run stretch too.
In the past few months, there has been a lot of debate and discussion over the education sector. The Education Minister, Kapil Sibal, has announced some bold measures in his 100 day plan and the Yash Pal Committee Report has been submitted.
I have been following these developments with close interest. For very long, our governments have been in a “denial” mode. They have refused to acknowledge that there is a massive problem in the Education sector and it needs to be addressed. Well, this seems to have really changed.
Investment in the education sector is really investment in soft infrastructure. It builds and nurtures the minds of the young. It is really an investment in India’s future. Shouldn’t it get the sops and incentives available to other infrastructure industries.
Shouldn’t Education be declared an Infrastructure industry?
