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Now Credit Rating for Education Industry Too!

A well-developed and organized Education industry is crucial for bringing socio-economic transformation in the country. The Indian education system is, relatively speaking, quite unorganized and a laggard in terms of its growth and transparency.

However, in recent times there seems to plenty happening in the education space – the renewed emphasis for this industry in the 11th five year plan and an increase in incremental expenditures in every subsequent Union budget by the Government underscores the importance of this industry for the Indian economy.

Malpractices Bill Cleared, Seeks Cabinet Approval

The Group of Ministers has cleared the Prohibition of Unfair Practices in Technical, Medical Education Institutions and Universities Bill, 2009. However, these bills need to be moved to the Parliament’s Budget session. HRD now has three cleared bills related to setting up of educational tribunals, accreditation body for educational institutions, and the last one on malpractices; which needs Cabinet approval.

These efforts to cleanse the educational system were taken by HRD to curb various acts of malpractices like donation, capitation fees, high prospectus charges, misleading promotional advertisements, hurdles in admission procedures, wrong faculty information, etc. The institutions indulging into such malpractices may have to pay hefty fines or even land in jail.

What’s Your School’s Rating?

The Bill on accreditation makes it mandatory for educational institutions to seek accreditation from various private rating agencies. These rating outcomes have to be made public to provide light to the students and parent community about the various practices and procedures as may be followed by these institutions.

Thus, so far we had seen how the role of credit rating changes, providing a unique range of services from providing insight into operative environment, independent information and research and analysis of various business practices, have assisted in bringing sweeping changes in spaces like finance, investment, risk evaluation, economy, advisory services, etc.

Now, this specialized service of credit rating will also include the largely unorganized education sector in order to aid the system in tightening norms and bring maximum transparency.

Do you feel that the role of accreditation will play a turning point in the organizing and development of education industry in the years to come?

Viral Dholakia: Viral Dholakia is a Freelance writer for financial magazines & is passionate about blogging and Capital Markets. Stay in touch with him at bull4bears-at-yahoo.co.in or on Twitter at @viralsss
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