Indian Education Sector(IES)Â 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.
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.