Investment Opportunities in India

May 3, 2013

Investment options in Indian education sector

Education is the vital key for modernization. The importance of education can be realized from the fact that all modernized societies are emphasizing on universalization of education as a mode for sustained economic development. There is a huge demand for upgradation of education sector in India, as the country is expected to have a surplus of 47 million people in the working age group by 2020. The consumption trends predict that an urban India is spending nine per cent of his wallet on education while the rural consumer spends only six per cent.

Education in India

In the past few years Indian education sector has witnessed a series of changes, which resulted in a significant increase in market share of the education industry. With economic growth and enhanced technology it has become necessary to develop the Indian education sector. Funds are a major concern in the market to meet this demand. The Government of India has taken many initiatives to attract investments from non-resident Indians (NRIs) for the development of education infrastructure. The Government has also opened the doors for foreign universities by passing Foreign Educational Institution (Regulation of Entry and Operation) Bill, which will help in bringing foreign investments in education in India and shaping the education industry structure specially pertaining to higher education.

Growth drivers of Indian education sector

  • Demographic advantage
    • As per Census 2011, 35.3 per cent of the Indian population is under the age of 14
  • Increasing awareness
    • Increase in awareness towards education as a priority and essential tool for career growth
    • Increase in job opportunities and salaries offered making investment in education in India prudent
  • Human Resource driven economy
    • Increase in the demand for an educated skilled workforce by services sector
    • Share of service sector in GDP increased from 30% in 1950 to 55% in 2007
  • Technology aided delivery
    • Increase in penetration of technology resulting in virtual learning and education delivery
  • New employment avenues
    • Newer employment avenues such as knowledge process outsourcing (KPO), legal process outsourcing (LPO), retail, aviation, animation etc. demanding highly skilled manpower

Investment opportunities in Indian education sector

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 renovation, according to a report ‘Emerging Opportunities for Private and Foreign Participants in Higher Education’ by PricewaterhouseCoopers (PwC).

The Government of India has allowed foreign direct Investment (FDI) up to 100 per cent through the automatic route in the education sector.

According to the ‘Indian Higher Education – Real Estate’s New Emerging Sector’, a study by real estate consulting firm, DTZ, the Indian higher education sector needs 5,550 million sq ft of additional educational space (excluding support services like hostel, cafeteria, recreational facilities) to meet the Government of India’s 30 per cent Gross Enrollment Ratio (GER) in higher education target by 2020.

The sky rocketing economic growth will require huge number of engineers and management graduates which mandate infrastructural development to address the demand. Entry of foreign universities would not only intensify the competition, but also provide an international platform to the Indian students where they can achieve quality learning.

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March 28, 2013

Booming Education Industry of India providing huge business opportunities

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 recognises the role of education in instilling the values of secularism, egalitarianism, respect for democratic traditions and civil liberties and quest for justice.

The ongoing demand to strengthen the Indian education sector has opened up many avenues for people of India as well as non-residents of India (NRI) to invest in education sector.

Market Size

The education sector in India is evolving, led by the emergence of new niche sectors like vocational training, finishing schools, child-skill enhancement and e-learning.

According to a report ‘Education in India: Securing the demographic dividend,’ published by Grant Thorton, the primary and secondary education, or K-12 sector is expected to reach US$ 50 billion in 2015 from US$ 24.5 billion in 2008, growing at an estimated compound annual growth rate (CAGR) of 14 per cent.

Government Initiatives to boost Investments

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).

Ever since, the Government of India has allowed foreign direct Investment (FDI) up to 100 per cent through the automatic route, many people find it convenient and profitable to invest in education sector.

Some of the initiatives taken by the Government for the infrastructural development of the sector and to increase the business opportunity in education are:

  • For the year 2012-13, Rs 25,555 crore (US$ 4.63 billion) have been allotted for RTE-SSA (Right to Education – Sarva Shiksha Abhiyan) which represents an increase of 21.7 per cent over the previous year allotment in 2011-12
  • 6,000 schools have been proposed to be set up at block level as model schools in the Twelfth Five Year Plan (2012-17)
  • Rs 3,124 crore (US$ 566.69 million) have been provided for the RMSA (Rashtriya Madhyamik Shiksha Abhiyan), which is an increase of 29 per cent over 2011-12
  • India and Republic of Korea have signed a memorandum of understanding (MoU) for cooperation in the field of education
  • Prime Minister’s fellowship scheme for doctoral research has been launched in New Delhi by Mr S Jaipal Reddy, Union Minister for Science and Technology, according to Confederation of Indian Industry (CII)
  • The Ministry of Human Resource Development (MHRD) plans to set up ten community colleges in collaboration with the Government of Canada in 2012. The Government of India has decided to set up hundred community colleges this year
  • The Government of India plans to set up an Indian Institute of Agricultural Biotechnology at Ranchi with an investment of Rs 287.50 crore (US$ 52.15 million). The Institute will be a deemed university and will have different schools to import knowledge in genomics, bioinformatics, genetic engineering, nano biotechnology, diagnostics and prophylactics and basic and social sciences and commercialization

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