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Corporate India Making In Roads Into Education Sector , Will It Help ?

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Indian Education Sector(IES)  is by far the largest capitalized space in India with $30bn of government spend (3.7% of GDP; at global average), and a large network of ~1m schools and 18,000 higher education institutes.But, a literacy rate of 61% does not do justice to the government spend, does it?

Government has increased its focus on uplifting the education sector and has upped the government spend on education by 20% to around 34 thousand crores.However, the investments have not seen a huge turnaround in terms of increasing the efficiency and the levels of education in India. Educomp report on the IES sector points out the holes in the government spend on education and the roadblocks for the private sector involvement in IES.

As per the report , the government spend leaves too much for the asking when it comes to the breakdown of the investment in IES.The biggest hindrance cited by the private sector to invest in the IES is cited to be the regulations favouring a ‘Not For Profit’ approach.It is no surprise than that the IES does not enjoy the kind of private sector investment that one would expect to see.

Companies like NIIT,Educomp are some of the successful private players in the commercial education sector in India.However, given the responsibility for these companies to make money and limited cash reserves , the Indian higher education sector still remains hungry for investment and betterment.

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The corporate India provides a tangible answer to the woes of Investment in IES.With corporate India i refer to the gigantic organizations who have a huge market capitalization and are market leaders in the their sectors of operation.Case in point the recent announcement by the Reliance Group to open a World Class university to promote education in India.Reliance has plans in place to open a university meeting international standards and providing facilities to promote research in areas ranging from Liberal Arts To Technology.As per the official statement by Mr.Mukesh Ambani ,

“It will be international in scale and in best practices, but with an Indian soul”

The Commercialization of Education is fraught with a lot of skeptism.A lot of people say that the private education bodies keep money making as their primary aim and yet provide sub-standard education or the real good universities are out of reach for a lot of people.All said and done , with a corporate like Reliance making inroads into the highly lucrative education sector, things might change for the better.These conglomerates have a huge war chest for making the right kind of investments and the return on investment for them is not only in monetary terms.The students passing out of their universities ,should they be trained well will come in handy to become prospective employees of the company.

Reliance is however not alone to board the IES.The Aditya Birla Group,  has already played its hand at commercial education with the Sarala Birla Academy in Bangalore and  Vedanta Group has announced a large university near Puri in Orissa.

If the corporate sector makes Education an important part of their business portfolio and strives to maintain high quality standards, the IES might see a real beneficial turnaround going forward.The affordability might still remain a question but then, it will at least pave way for having world class infrastructure right in the country.The migration of the student community to the west in the want of best of the class facilities might see a decline in time which might also help in reducing the Brain Drain.

What are you thoughts on this? Should more corporate like the Birla’s, Reliance entering the Indian Education Sector signal a change for the better or the focus of profit making will make this a futile exercise.

  1. Madhavan Anidil says

    Good one.

  2. Ravi Shankar says

    Yours is an excellent aritcle. I too have a similar view and would like you to visit the blog.
    I have an article which I have published in a blog site. I would request you to read that and explore how you can help or contribute to explore the opportunities in education. I can send word document for you to read if you reply to my email id. However you can use the link as below. I am looking for educationalists to explore education sector in India and Indian states.

    http://opportunityineducation.blogspot.com/

    I would like to know in what way your organization can help explore education sector. I do not have a proposal but I do have a scenario where a lot can be explored.
    Looking forward to your feedback/ comments on this scenario.

  3. PANKAJ says

    I agree with the fact that the corporate sector can play an important role in upgrading in education system of India as we do need some investment in higher educations but that investment can be well regulated by the government by enforcing the policy of non profit investment. now the problem comes ” why would private sector would contribute to that sector where there is no profit” . For that we can give them incentives such as lands as much cheaper rates for constructing their institutes, reduced taxes, and a well advertising material, their transport system also provided by government. government alone cannot stand for such a big sector. we need to reach to the poor ones who are deprived of this sector so the private sector has to be enrolled in this and government has to keep a check by regulating polcies benificiary to both students and investors. but we do need some honest and hard working bueracracts for this work and land should be assingned in village or urban areas which are close to villages because INDIA is just 30% urbanised!!
    private sector means
    1.improved infrastructure
    2, improved teacher standards
    3, improved teacher-student relations
    4. improved exam pattern
    5. and more concentrated on innovation and ideas.

  4. Rajesh Gupta says

    Ankit,

    This is a great step where Private Corporates are entering the Indian Education sector and it is going to make a significant impact. But I believe that this sector demands more than just Private sector jumping into it. With Govt. reiterating its focus on higher education and a huge demand in the near future (not only from employment standpoint but overall uplifting the economy level of families) I truly believe that a PPP model should be re-looked into and religiously make this drive penetrate deep into our education system.

    It is very unfortunate that we (I am referring to the education bodies owned by Govt. or aided by Govt.) are still living in old age where the teaching outcome is nowhere near to what is currently mandatory for a human being.

    The Corporates with deep pockets should collaborate with Govt. to create Centers of Excellence not only for the students but teachers too. Our current pool of teachers is not provided a means of continuous learning and it is not their fault to not produce well educated future leaders of India.

    Also we should look at not only the students but at a family level. We should put more focus on making the families learn the new things – a new means of living.

    I am very positive that with the initiatives taken by the Govt. we should be on the right path to revamp our IES.

  5. Madhav Shivpuri says

    Its great read the post and the newspapers about the various collaborations that Educomp, Everonn etc., are forging partnerships with foreign universities to bring them to India. Surely it will open up more opportunities and choices for students and parents. Conversely I also hope that the total cost of education comes down as it is the biggest burden for a parent and a deterrent to send children to higher studies.

    To the other point about profitability – uust because there are profitable private hospitals does not mean their services are bad and they just care about their bottomlines. Conversely due to competition they strive to give more for less to keep the customers coming. Similarly imagine if Reliance or Educomp give poor quality will parents or students choose them? So, it’s common sense that education system, processes and quality can only get better over time.
    My 2 cents.

  6. Abhishek Anand says

    Ankit,
    Question here is not whether profit making will make it futile.Profit is being – and will continue to be – made whether government allows it or not.It’s better to recognise it, so that the focus can then be solely on quality and access.
    Businessmen, entrepreneurs and investors have swarmed the education sector in the past few months suggesting that education has become an even better business than it was before.They do make profits but they are not allowed to say so.
    Given the lobbying power and influence of big corporates on government policies,yes i see a better future for Indian Education System.

  7. Rohan says

    Oh…I …seee…….You are in 8th grade!

    What you are doing is “Ranting, whining, etc”. Contains no substance.

  8. Vishal Sanjay says

    I feel its good that private players have entered the market, even if their main aim is profit , they do provide a good quality education. The government should put up some regulations and check for proper standards. And I also believe that the government running its own free schools is useless, children come there only for the free food scheme, so its well and good if the government spends money in funding poor kids to enter into good private schools, what I mean is each private school or college should have a section for poor kids whose fee is paid by the government. In the private sector most of the schools are good, as most parents demand the best quality education and are willing to pay for it, this forces low quality private schools to improve fast.

    1. Vishal Sanjay says

      And I also feel that big private educational institutions provide what I call as true education. The school i go to makes me study things which have no practical use in life, even if I did need it I would find it with one search on the internet. The educational system is one of the main reasons why Indians are not very creative and innovative as Americans. India does very well in the technical side, but we are no good in innovation and creativity which is essential for management, causing us to always work for Americans. This is also a reason for one of your previous posts on ‘why Indian startups stop innovating?’.

      1. Rohan says

        “Indians are less creative” – May be you are an Indian who is less creative. Why think that whole Indian is like you?

        Boy, go and read some stuff so that you can valuate Indians properly. May be we don’t have 20 MBPS broadband @ $.9.99, but that does not mean we are “dumb little” Indians.

      2. Ankit Agarwal says

        Vishal,
        I think you got it a little wrong.I never meant to say that Indians are not creative at any point of time.
        It is just that we do no get access to the best infrastructure and the faculty which could infact catipult the intelligent Indian brains to new heights.Infact, Indians are known to make use of whatever little facilities and they have done wonders only on their creative pursuit and hardwork.
        But, my perspective is that with corporate sector coming into education sector will help provide access to best in class facilities.

        BTW i did not write the ‘Why Indian Startups…’ .It was Rabi :-)

        1. Vishal Sanjay says

          I didn’t mean that, I actually meant that Indian schools do not give importance to creativity, they usually want kids to follow their text books. Infrastructure has no importance in this, its just out of the point. And Rohan I said that Indians are less creative than americans and its actually because Indians do not get opportunities to showcase their creativity, even many parents discourage their kids for making up careers in fields like art and commerce. Many private schools these days are getting better, so that is why I feel its good if education sector gets privatized. I myself am in 8th grade and i study in one of India’s most respected schools, but the only thing they make us do memorize our text books. There is huge difference between the home work an american gets and the home work an Indian gets, Americans kids would be asked to write a story on some subject in english, but we usually get something that says memorize the meanings of this story. Movies like 3 Idiots and Taare Zameen Par have created good awareness. I also remember mentioning that the memorizing type of education is good for being on the technical side, but there has to be another way which would concentrate on the above point, which is essential for entrepreneurship and management. Both of them should be used and then students should be given an option to choose what kind of education they want.

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