Report on Education Sector in India

Prepared by Perth Education City – India Office

INDEX Particulars Page no

Education Sector in India - Introduction 3

Stages of Education in India 4

Education post independent India – Some milestones 5

Responsibility of Centre, States & local bodies for Education 7

Policy Frame work

The Constitution

Important legislations

National policies on education

Capacity Building: Premier Institutions

8

Education budget 9

Vocational education in India 10

Types of Vocational education training according to National Sample Survey Organisation (NSSO) 11

Challenges for the VET sector in India Points to focus

15

Opportunities in Vocational Education 18

Opportunities in India for private players in Higher Education 19

Indian Students going overseas for Higher Education 21

Foreign Education Bill in India 21

Current trends in the market followed by foreign institutions in India 22

Education Sector in India Introduction Education in India is mainly provided by the public sector, with control and funding coming from three levels: federal, state, and local. Education in India falls under the control of both the Union Government and the states, with some responsibilities lying with the Union and the states having autonomy for others. Most universities in India are Union or State Government controlled. India has made progress in terms of increasing primary education attendance rate and expanding literacy to approximately two thirds of the population. India's improved education system is often cited as one of the main contributors to the economic rise of India. Much of the progress, especially in higher education and scientific research has been credited to various public institutions. The private education market in India is merely 5%, although in terms of value it is estimated to be worth $40 billion in 2008 and will increase to $68 billion by 2012. However, India continues to face stern challenges. Despite growing investment in education, 35% of its population is still illiterate; only 15% of Indian students reach high school, and just 7% graduate. Until 2008, India's post-secondary high schools offered only enough seats for 7% of India's college-age population, 25% of teaching positions nationwide were vacant, and 57% of college professors lacked either a master's or PhD degree. India's higher education system is the third largest in the world, after China and the United States. The main governing body at the tertiary level is the University Grants Commission (India), which enforces its standards, advises the government, and helps coordinate between the centre and the state. Accreditation for higher learning is overseen by 12 autonomous institutions established by the University Grants Commission. As of 2009, India had 20 central universities, 215 state universities, 100 deemed universities, 5 institutions established and functioning under the State Act, and 13 institutes which were of national importance. Other institutions included 16,000 colleges, including 1,800 exclusive women's colleges, functioning under these universities and institutions. The emphasis in the tertiary level of education lies on science and technology. Indian educational institutions by 2004 consisted of a large number of technology institutes. Distance learning is also a feature of the Indian higher education system. Some institutions of India, such as the Indian Institutes of Technology (IITs), have been globally acclaimed for their standard of undergraduate education in engineering. The IITs enrol about 8,000 students annually and the alumni have contributed to both the growth of the private sector and the public sectors of India. However, the IITs barely have any contribution in fundamental scientific research and innovation. Some institutes of basic research like Indian Association for the Cultivation of Science (IACS), Indian Institute of Science (IISC) and Tata Institute of Fundamental Research (TIFR) are acclaimed for their standard of research in basic science. However, India has failed to produce world class universities like Harvard or Cambridge. Three Indian universities were listed in the Times Higher Education list of the world’s top 200 universities — Indian Institutes of Technology, Indian Institutes of Management, and Jawaharlal

Nehru University in 2005 and 2006. Six Indian Institutes of Technology and the Birla Institute of Technology and Science – Pilani were listed among the top 20 science and technology schools in Asia by Asiaweek. The Indian School of Business situated in Hyderabad was ranked number 12 in global MBA rankings by the Financial Times of London in 2010 while the All India Institute of Medical Sciences has been recognised as a global leader in medical research and treatment.

Stages of Education in India

Stages of Education in India , and an indication regarding corresponding age group of students for each stage, are shown in the table below:

S. No Stage Classes / Duration (with exceptions, if any)

Corresponding Age Group of Students (Indicative)

1. School Stages I-XII 6 - 18 Years

1.1 Elementary I-VIII (I-VII a few States) 6 - 14 Years

1.1.1 Primary I – V (I - IV in a few States)

6 - 11 Years

1.1.2 Upper Primary VI - VIII (V - VII in a few States)

11 - 14 Years

1.2 Secondary IX - XII (VIII - XII in a few States) 14 - 18 Years

1.2.1 High School IX - X (VIII - X in a few States)

(I - IV in a few States) 14 - 16 Years

1.1.2 Higher / Senior Sec. School XI - XII 16 - 18 Years

2. Higher / University Education 18 - 24 Years *

2.1 Non-Professional (e.g. Humanities

/ Pure Sciences / Commerce) Degree Courses

2.1.1 Undergraduate 3 Years

2.1.2 Post-graduate 2 Years

2.2 Professional Degree / Diploma

Courses Depends on the nature of the course

*18 - 24 years is usually taken as the age group of students corresponding to university / tertiary education

Education in Post-Independence India: Some Milestones

1947 India achieves Independence

1948-49 University Education Commission constituted; gives Report

1950 India becomes a Republic. Free and compulsory education enshrined as one of the Directive Principles of State Policy in the new Constitution

1951 Decennial Census yields a Literacy Rate (5+) of 18.3% (overall), 8.9% (female) First Indian Institute of Technology (IIT) established at Kharagpur

1952-53 Secondary Education Commission constituted; gives Report

1956 University Grants Commission (UGC) established by Act of Parliament Indian Institute of Technology (Kharagpur) Act passed by Parliament Pandit Jawaharlal Nehru delivers the first convocation address at the first IIT (Kharagpur)

1958 Second IIT established at Mumbai

1959 Third and Fourth IITs established at Kanpur and Chennai, respectively

1961 NCERT established Institutes of Technology Act passed by Parliament to provide a common legal framework for all IITs First two Indian Institutes of Management (IIMs) set up at Ahmedabad and Kolkata

1963 Fifth IIT established at Delhi

1964-66 Education Commission constituted; gives Report

1968 First National Policy on Education (NPE) adopted, in the light of the recommendations of the Education Commission

1963 Third IIM established at Bangalore

1975 Integrated Child Development Services (ICDS) scheme launched to provide for holistic development of children up to the age of six years

1976 Constitution amended to change ‘Education’ from being a ‘State’ subject to a ‘Concurrent’ one

1984 Fourth IIM established at Lucknow

1985 Indira Gandhi National Open University (IGNOU) established by an Act of Parliament

1986 New National Policy on Education (NPE) adopted

1987-88 Many large centrally-assisted schemes like ‘Operation Blackboard’, ‘Educational Technology’, ‘Vocationalisation of Secondary Education’, etc., launched in pursuance of NPE, 1986 All India Council of Technical Education (AICTE) vested with statutory status by an Act of Parliament National Literacy Mission launched

1992 NPE, 1986, revised, based on a review by the Acharya Ramamurti Committee

1993 National Council of Teacher Education (NCTE) vested with statutory status by an Act of Parliament

1994 District Primary Education Programme (DPEP) launched to universalise primary education in selected districts National Assessment and Accreditation Council (NAAC) established by UGC (with headquarters at Bangalore ) to assess and accredit institutions of higher education National Board of Accreditation (NAB) established by AICTE to periodically evaluate technical institutions and programmes Sixth IIT established at Guwahati

1995 Centrally-assisted Mid-Day Meal scheme launched in government and semi-government primary schools all over the country, with central assistance by way of free food grains

1996 Fifth IIM established at Kozhikode

1998 Sixth IIM established at Indore

2001 Decennial Census yields Literacy rate (7+) of 65.4% (overall), 53.7% (female) Sarva Shiksha Abhiyan (SSA) launched to universalise elementary education of good quality all over the country University of Roorkee converted into (the seventh) IIT

2002 Constitution amended to make Free and Compulsory Education a Fundamental Right (yet to be brought into force)

2003 17 Regional Colleges of Engineering converted into National Institutes of Technology, fully funded by the Central Government

2004 Education Cess levied for raising additional finance needed to fulfil Government’s commitment to universalise quality basic education Mid-Day Meal scheme revised to provide central assistance to meet cooking cost as well EDUSAT, a satellite dedicated to education, launched

2005 National Commission for Minority Educational Institutions established by Act of Parliament

2006 Two Indian Institutes of Science Education & Research (IISERs) established at Kolkata and Pune, respectively

2007 Seventh Indian Institute of Management established at Shillong One Indian Institute of Science Education & Research (IISER) established at Mohali The National Institutes of Technology (NITs) brought under a common statutory framework by establishing NIT Act. Rashtriya Sanskrit Parishad Constituted The Central Educational Institutions (Reservation in Admission) Ac Notified.

Responsibility of the Centre, States and Local Bodies for Education Allocation of responsibility for various subjects to different tier of governments is ultimately laid down in the Constitution. From 1950, when the Constitution came into force, till 1976, Education was essentially a State subject, with role of Central Government being limited to running central universities, central institutions of training and research, and institutions of national importance, and coordination and determination of standards in institutions for higher, scientific and technical education and research. The Constitution (42nd Amendment) Act, 1976, shifted Education, in general, from the ‘State List’ to the ‘Concurrent List’, thus giving both Central and State Governments jurisdiction over it, concurrently. The concept of concurrency was fleshed out in Para 3.13 (‘A Meaningful Partnership’) of the National Policy on Education, 1986, which reads as follows: 3.13 The Constitutional Amendment of 1976, which includes Education in the Concurrent List, was a far-reaching step whose implications - substantive, financial and administrative - require a new sharing of responsibility between the Union Government and the States in respect of this vital area of national life. While the role and responsibility of the States in regard to education will remain essentially unchanged, the Union Government would accept a larger responsibility to reinforce the national and integrative character of education, to maintain quality and standards (including those of the teaching profession at all levels), to study and monitor the educational requirements of the country as a whole in regard to manpower for development, to cater to the needs of research and advanced study, to look after the international aspects of education, culture and Human Resource Development and, in general, to promote excellence at all levels of the educational pyramid throughout the country. Concurrency signifies a partnership, which is at once meaningful and challenging; the National Policy will be oriented towards giving effect to it in letter and spirit. By the 72nd and 73rd Amendments to the Constitution, bodies of local self-government – Panchayati Raj bodies for rural and municipal bodies for urban areas, respectively – were accorded Constitutional status, in 1993. Assignment of functions to these bodies is to be

determined by laws enacted by individual State legislatures. However, the 11th and 12th Schedules of the Constitution provide illustrative lists of items which may, by law, be devolved on these local bodies. The 11h Schedule lists education up to the secondary level, vocational education, and adult and non-formal education, among others, for devolution to Panchayati Raj bodies. Policy Framework The Constitution The Constitution of India is the ultimate document which guides State policy in all sectors, including education. Details of provisions contained in the Constitution, which have a bearing on education, have been listed on this website under the caption ‘Constitutional Provisions’. Their more important features are: Provision of free and compulsory education to all children up to the age of fourteen years Education, in general, is the concurrent responsibility of the Union and the States. However, (a) coordination and determination of standards in higher and technical education, and (b) institutions declared by Parliament by law to be institutions of national importance are the responsibility of the Union. Local authorities (Panchayats and Municipalities) are to be assigned a suitable role in education (especially School, Adult and Non-Formal Education) through individual State legislations. State Governments and Local Authorities are expected to provide facilities for instruction in the mother tongue at the primary stage of education. Important Legislations Next to the Constitution, State Policy is articulated through legislations. Some of the important Central legislations having a bearing on the subjects allotted to the Department of Higher Education are:

The University Grants Commission Act, 1956

The All India Council for Technical Education Act, 1987

The National Council for Minority Educational Institutions Act, 2004

The Copyright Act, 1957

The Apprentices Act, 1961 National Policies on Education There have so far been mainly two comprehensive statements of the National Policy on Education, viz. those of 1968 and 1986. The former contained decisions of the Central Government on the recommendations of the National Commission on Education, 1964-66. The latter was a result of the renewed priority assigned to Education by the government of the Late Rajiv Gandhi, who was Prime Minister during 1984-89. The 1986 policy was reviewed by a Committee constituted in 1990 under the chairmanship of Acharya Ramamurti. On the basis of the recommendations of this Committee, certain provisions of the 1986 policy were modified in 1992. Thus, in all, the following three comprehensive national policy statements exist on Education:

National Policy on Education, 1968

National Policy on Education, 1986

National Policy on Education, 1986, as modified in 1992 Capacity Building: Premier Institutions Over the decades, the Department has also established or substantially funded a number of premier institutions, which have come to acquire a reputation for excellence. Some of these are:

13 Indian Institutes of Technology (IITs)

7 Indian Institutes of Management (IIMs)

Indian Institute of Science (IISc), Bangalore

23 Central Universities

Indian School of Mines, Dhanbad

4 Indian Institutes of Information Technology (IIITs)

20 National Institutes of Technology (NITs) The above list does not include premier institutions in the field of Medical, Agricultural and Legal Education, which are looked after by other Ministries of the Government of India. Education Budget India plans to raise its expenditure in the education sector by about a quarter to Rs. 520.6 billion (USD 11.50 billion) in the next financial year, Finance Minister Pranab Mukherjee stated in his budget speech, reinforcing the country's push to create a skilled workforce to keep up with fast-paced growth.

National Education Budget (2011–2012) Budget 52,057 crore (US$11.56 billion)

General Details

Primary Languages Hindi, English, or State language

Literacy (2011)

Total 74.04%

Male 82.14%

Female 65.46%

Attainment

Secondary diploma 15%

Post-secondary diploma 7%

The government will also infuse as much as Rs. 2 billion each in Indian Institute of Technology, Kharagpur, the nation's premium engineering institute, and Maulana Azad Education Foundation, apart from other grants to various institutions. The National Skill Development Council (NSDC) is on course to create a 15 crore skilled workforce two years ahead of 2022, the stipulated target year. The government will also invest as much as Rs. 210 billion in Sarva Shiksha Abhiyan, its elementary education programme.

Vocational Education in India Throughout the post-independence period there have been many attempts to reform the Indian vocational education system and make it more applicable. The list of vocational education policy reforms that have been attempted over the last 60 years is quite extensive. Without raising the standards, efforts have been made to go forward with market-oriented reforms to the vocational education system. Introduction Vocational education consists basically of practical courses through which one gains skills and experience directly linked to a career in the future. It helps students to be skilled and in turn, offers better employment opportunities. These trainings are parallel to the other conventional courses of study (like B.Sc., M.Sc., etc). Time management and meeting deadlines play an important role in success in a vocational course, and during their studies, students normally produce a portfolio of evidence (plans, reports, drawings, videos, placements), which is taken as a demonstration of their capabilities for a job. After finishing the courses, students are often offered placements in jobs. Vocational trainings in a way give students some work related experiences that many employers look for. According to a National Sample Survey Organisation (NSSO) report, two types of vocational trainings are available in India: a) Formal, and b) Non-Formal. Formal vocational training follows a structured training program and leads to certificates, diplomas or degrees, recognised by State/Central Government, Public Sector and other reputed concerns. Non-Formal vocational training helps in acquiring some marketable expertise, which enables a person to carry out her/his ancestral trade or occupation. In a way, through such non-formal vocational training, a person receives vocational training through ‘hereditary’ sources. Often ‘non-formal’ vocational trainings are also received through ‘other sources’. In such cases training received by a person to pursue a vocation is not ancestral and is different from the trade or occupation of his/her ancestors.

Data and graphs used here are all indicative, not exhaustive.

Fig.1: Academic, Technical and Vocational parallel training structure/system in India-a flowchart Source: Skill development in India: The vocational education and training system report no.-22 World Bank Type of Institutions for Vocational training according to National Sample Survey Organisation (NSSO) Different institutions which impart vocational training can be classified into five categories: (i) Government, (ii) Local body, (iii) Private aided, (iv) Private unaided, and (v) not known. According to a NSSO report vocational training is received by only 10% of persons aged between 15-29 years. Out of this only 2% receive formal training, while non-formal training constitutes the remaining 8%. Out of the formal training received by that particular age group, only 3% are employed. The most sought after field of training is computer related training. Only 20% of formal vocational training is received from ITI/ITCs. In India, the technical education and vocational training system follows patterns like graduate - post graduate, engineer - technologists through training colleges, diploma from polytechnics and certificate level training in ITIs through formal apprenticeships. The Vocational Training in India is imparted by mainly two types of bodies:

Public Industrial Training Institutes (ITIs)

Private owned Industrial Training Centres (ITCs) The Indian Government has invested a lot for the development of skills through ITIs. The DGE&T generally regulates these ITIs and ITCs at national level and implements policies for vocational training.

Training statistics of ITI/ITCs - main formal vocational training institutes in India Some of the principal training schemes are:

The Craftsmen Training Scheme (CTS)

Apprenticeship Training Scheme (ATS) According to the Planning Commission Report for the 11th Five Year Plan, there are about 5,114 Industrial Training Institutes (ITIs) imparting training in 57 engineering and 50 non-engineering trades. Of these, 1,896 are State Government-run ITIs while 3,218 are private. The total seating capacity in these ITIs is 7.42 lakh (4 lakh seats in government ITIs and the remaining 3.42 lakh in private ITCs). Figures below this text represent detailed information on the number and capacity of ITIs/ITCs in different states/UTs. A number of vocational training institutes are being run by private training providers. The formal training system of India starts at Grade 8 and above. According to a report of ILO, the quality of DGE&T’s skills development programmes compete with other programmes, such as high vocational schools (10 plus 2 stream), colleges, polytechnics, etc. The share of ITI-based training seems to capture around 10-12% of the total number of school pass outs at Grade10 level. Some training schemes provide by DGE&T other than Craftsmen Training Scheme (CTS) and Apprenticeship Training Scheme (ATS) are:

Craft Instructors’ Training Scheme (CITS),Advanced Vocational Training Scheme(AVTS)

Supervisory/Foremen Training Scheme, Staff Training and Research Program

Instructional Media Development Program

Women’s Training Scheme

Hi-Tech Training Scheme

Number of ITIs under Government and Private Bodies in main states of India

Source: Ministry of Labour DGE&T

From the above graphs we may conclude that Tamil Nadu holds the majority stake in private owned ITCs and Maharashtra holds a similar position for Government owned ITIs. Details about the nature of the training in ITIs etc. are available on the website of:

Ministry of Labour (http://labour.nic.in/)

National Council for Vocational Training (NCVT) (http://dget.gov.in) The National Council for Vocational Training, an advisory body, was set up by the Government of India in the year 1956. The National Council is chaired by the Minister of Labour, with members from different Central and State Government Departments, employers and workers’ organisations, professional and learned bodies, All India Council for Technical Education, scheduled castes and scheduled tribes, All India Women’s Organisation, etc. And State Councils for Vocational Training at the State level and Trade Committees have been established to assist the NCVT. The main mandate of the NCVT, according to DGE&T, is to establish and award National Trade Certificates in engineering, non-engineering, building, textile, leather trades and such other trades which are brought within its scope by the Government of India. It also prescribes standards in respect of syllabi, equipment, scales of accommodation, duration of courses and methods of training. It also conducts tests in various trade courses and lays down standards of proficiency required for passing the examination leading to the award of National Trade Certificate, etc.

Total number and capacity of ITIs and ITCs per million persons in India

Number of ITIs and ITCs available per million persons in different states in India

Source: The Vocational Education and Training System Report No. 22, World Bank

Intake capacity of ITIs and ITCs per million persons in different states in India

Source: The Vocational Education and Training System Report No. 22, World Bank

Paramedical training status for rural India Paramedical courses are one of the largest sources of vocational educated persons in the field of medical industry. Status of the total paramedical manpower in rural India is given in following graph.

Trained paramedical practitioners available in rural India

Source: MHRD, Annual Report India Year Book 2008, Manpower profile

From the Figure above, it is clear that out of total 315,746 paramedical workers in rural India, 47% are female health workers. But extension workers are very few; almost 1%. We also need to focus on the availability of Radio Graphers, Pharmacists and Laboratory Technicians for rural India. To disseminate knowledge of basic health facilities, we need to train more paramedical workers for rural India. But unfortunately at present they are few compared to the large size of the rural population. Challenges for the VET Sector in India Though there is a growing demand for vocationally trained workers, the segment per se has not really picked up in India because of a variety of reasons. Societal Pressures Historically, social stigma has been attached to vocational education and training as manual or industrial jobs were perceived as low paying and meant for low-caste communities. Largely because of this, students who completed their higher secondary education were more inclined towards academic or professional courses. Due to this attitude, the vocational education and training segment has suffered from poor enrolment. Training of Trainers Good trainers have always been an issue with vocational education in India. Because of societal pressures, the segment has failed to attract good mentors. Teachers in general are poorly paid in India and the salaries of teachers in VET have been at the lower end of the spectrum. In many

cases, in rural polytechnics or technical institutes, the teachers themselves have had only basic education. Revision of Existing Curricula and Introduction of New Courses In some states, the course curriculum has not been updated for 20 or more years, so even if students have completed VET qualifications, they may not be employable in modern industry. Due to the transition of the Indian economy from being agriculture-based to knowledge-based, it is all the more imperative to have new and revised courses which fulfil the requirement of modern industries. Of the trained candidates, the labour market outcomes as seen from placement/ absorption rates are reportedly very low. An ILO study done in 2003 reports that in the states of Orissa, Andhra Pradesh and Maharashtra, the percentages of graduates found to be in wage employment/self-employment upon graduation from ITIs were 16.2%, 41% and 35% respectively. The corresponding percentages for those graduating from ITCs were 21.3%, 22.8% and 35.6% respectively. Inflexible Approach The current framework requires minimum qualifications, varying from Class VII-XII, for participation in formal vocational training. While this may be necessary for certain trades, it is unnecessarily restrictive in others. Additionally, once an individual leaves mainstream education for vocational training, there is no provision for him/her to return to the former at a later stage. This not only encourages a general view of work and study being mutually exclusive options, it also increases the perceived risk of taking up vocational training. Moreover, there is not enough emphasis on short training courses designed to impart specific skills. Vocational education and training in India rely exclusively on a few training courses of long duration (2-3 years) covering around 100 skills. In China, on the other hand, there exist about 4,000 short-duration modular courses which provide skills more closely tailored to employment requirements. Association with Industries While there exists a provision for the participation of industry representatives/experts in the setting of curriculum and hiring of apprentices, there is still a significant mismatch between industry skill requirements and the talent pool emerging from ITIs/ITCs. This has contributed to low success in the labour market for VET graduates. The private sector largely undertakes in-house training programmes, but training to outsiders is very limited, restricted to catering to their own felt needs in the nature of captive skill development. This is largely because of the fear of losing trained skilled workers to competition which has resulted in constant shortages in private investment in this area.

Points to focus on

The training courses lack focus on the changing job market. As a result, it was seen from various reports that the number of students is declining for long term vocational courses, mainly in ITIs. The training policy should be focused on the changing job market in order to attract young people. More autonomy needs to be provided to institutes and they should have market linked infrastructure. For publicly funded training, equity distribution is also a problem. But job creation must be done regionally, not centrally; otherwise it will create regional imbalances of trained manpower. According to NSSO report (No. 470, 55th round) about 27% of the Indian population were migrants. The proportion of migrants was higher (33%) in urban areas than (24%) in the rural areas. It was mainly in search of jobs. Creating job opportunities regionally can help maintain the equilibrium in future days.

Funding for the public ITIs is very low as compared to other countries like China and USA which have restructuring-funds, whose share goes for improvement of vocational training systems in order to achieve international quality. However, things have changed for the better in the 11th Five Year Plan with the introduction of the National Skill Development Mission. But it is also desirable to have mechanisms to raise funds privately for up gradation of ITIs.

ITIs must focus on low-literate youth and provide new vocational qualifications/training programmes and also on the unorganised sector. Otherwise it will cause long term losses. To cite an example, the automobile industry is a technology intensive industry but most of the workshops are running without formally trained staff (we have currently no database of that). Sometimes, lack of training skills may harm the delicate instrument of vehicles. A vital challenge is to formally train workers for the crafts industry where a considerable number of informally trained craftsman work together.

Lack of accountability and training/supply management are also major problems for ITI institutes.

In India, different institutes impart vocational training but they do not have coordination among themselves. Information about this sector is not available from a single source. In fact we need to create a central database from where one can get full access on vocational training system right from school level to ITI/ITC institutes.

In the rural sector, radiographers and other trained para-medical persons are very few in comparison to the large number of the rural population. Policy makers should focus on paramedical vocational studies; so that incremental changes in the number of trained paramedical workers can benefit rural masses.

A central vocational training standardisation system, accredited nationally and globally, for maintaining the quality of the vocational education can enhance credibility of vocationally trained persons in the industry.

To attract more students from school level, reorientation of vocational courses is needed.

There should be a bridge organisation to relate R&D institutes and vocational education system. It would help the vocationally trained person to get the benefits of R&D.

Opportunities in Vocational Education

India is emerging as one of the world’s largest consumers of education services with a target population of close to 450 million (in the age band of 5-24 years). This number is expected to increase to 486 million by 2025, exceeding the combined target population in China (354 million) and US (91 million). In India, public and private spending aggregates to approximately US$ 100 billion per annum and private spends on education have grown at a CAGR of 10% since 1994. In fact, compared to other developed countries, private spends in India are relatively higher (4% of GDP, as seen in Exhibit 8).

India’s economy has witnessed continuous positive growth, which has led to a huge demand for a workforce in India. Recent economic surveys show that employment growth has been the largest in the services sector, and this trend is in all likelihood going to grow in the future. Also, technological product and service innovations have fuelled the demand for more skilled workers. This demand has not been met, due to unavailability and poor quality of skilled workers. There is a lack of training facilities and skill development in as many as 20 high-growth industries such as logistics, healthcare, construction, hospitality and automobiles. Exhibit 9 shows the split of people intake over the next 5 years (2008-13) by different sectors.

Encouraging Public–Private Partnership The Central Government too has realised the importance of industries in the creation of a suitably trained workforce for the country’s labour requirement. The Directorate General of Employment and Training (DGET), Ministry of Labour, initiated a pilot programme, Formation of Institute Managing Committee (IMC) for ITIs in 1998 in collaboration with the Confederation of Indian Industry (CII) to improve cooperation between Industry and ITIs. Under this concept, Industry is associated as partners rather than advisors. An IMC is formed at the ITI level, which manages some of the activities of ITIs. An IMC comprises members from State Government, Industry, ITI and others. The chairperson of the committee is a representative of the local industry. This committee works under the supervision and control of the Steering Committee, formed at the state level. The concerned State Secretary in charge of the vocational training at state level is the chairperson of the Steering Committee. The IMCs have already been formed in 515 ITIs in 28 states. Major benefits from IMCs are active participation of industry, organising campus interviews, arranging on-the-job training and industrial visits, training and development of faculty, vocational guidance and counselling, better upkeep of equipment, resource generation and utilisation by the ITI itself. Opportunities in India for private players in Higher Education For India to maintain its economic growth in the global marketplace fuelled by the knowledge economy, the country needs to increase student enrolments in higher education. The country’s demographic differentials reveal that India will have a distinct advantage of the younger age group (where many new opportunities can be fully optimised) over the next few years. To enrol this high number of young population in colleges, the country requires more universities and training institutes. As per our research, the number of universities has grown manifold and a similar trend has been witnessed in the number of student enrolments (up to 14 million) in higher education. The annual student enrolments in higher education are expected to grow at a CAGR of nearly 8.7% during 2010-11 to 2012-13. Further, the market size of higher education will witness a CAGR of approximately 15% to cross US$ 22 billion by 2013. Although the country has one of the largest higher education systems in the world, a report on ‘Indian Education Services - A Hot Opportunity’ has found that there remains a high growth potential for the development of the higher education system in India. Economic growth will lead to a surge in demand for more engineers and management graduates. Along with the quantity of graduates, the quality of education is anticipated to be another focus area for the Indian higher education system. With the entry of foreign players, it is expected that the competition will intensify and correspondingly improve the quality of education. To suffice the health needs of India, there is a huge requirement of nurses and doctors. The country has a nurse to population ratio of 1:1,100 as compared to the developed country average of 1:150. Moreover, doctor to population ratio is approximately 1:2,000. In order to increase this ratio, there is a huge requirement of nursing and medical colleges. According to a study, the number of required medical colleges should reach 295 by 2013 from 271 in 2009. If addressed properly, there are a number of factors which can act as a catalyst for the growth of higher education in India. Availability of education loans, growing demand for skilled personnel and e-learning are few of the growth areas. The country also faces challenges like low pedagogic quality and lack of investment funds in providing quality education. The report provides an in-depth research and rational analysis of the current status and expected position of the higher education system in India. It also gives an overview of the number of universities, technical education institutions and colleges available and required in the country.

Besides, our report gives a prudent analysis of different courses that will remain in high demand over the next few years. The report provides coherent analysis of the need for opening up of universities (particularly foreign) in the country over the next few years. In this regard, the report gives the entry and operation regulations for foreign universities/institutions providing education in India. Over 70% of Indians will be of working age in 2025. In this context, universalising access to secondary education, increasing the percentage of our scholars in higher education and providing skill training is necessary. India has one of the youngest populations in the world. This gives pressure on kindergarten education. In India, the quality of primary and secondary school education is not as per world’s standards. The number of people who are waiting for quality education and availability of top class education has a great imbalance. This is allowing India to become the best target to feed private equity investment in the educational sector. The educational sector is one of those sectors which is not heavily effected in times of financial crisis like Year 2008. The cash flow in education is always assured and schools are not dependent on financing their working capital. This makes the education sector one the most promising sector of 2011 and beyond.

Indian Students going overseas for Higher Education According to a report by ASSOCHAM, Indian students going abroad for higher studies cost a foreign exchange (forex) outflow of $10 billion annually. Nearly 5 lakh students choose to go abroad every year to countries like the UK, US, Canada, Australia, Singapore and New Zealand. The primary reason why a large number of Indian students are forced to opt for foreign universities is that Indian institutions have high capacity constraints.

Source: Open Doors Report Foreign Education Bill in India The Foreign Educational Institutions (Regulation of Entry and Operations, Maintenance of Quality and Prevention of Commercialisation) Bill will allow foreign universities to invest at least 51% of the total capital expenditure needed to establish the institute in India. Such institutes will be granted deemed university status under Section 3 of the Universities Grants Commission (UGC) Act, 1956. The Bill aims to regulate the entry, operation and maintenance of quality assurance and prevention of commercialisation by foreign educational institutions, besides protecting the interest of the student community from sub-standard and ‘fly by night’ operators.

In 2008, around 140 Indian institutions and 156 foreign education providers were involved in academic collaborations. Of the foreign providers, 90 have university status and 20 have college status. Other institutions are those for training or further education. The total number of collaborations was 225, and with each collaboration having more than one programme delivery, the total number delivered is 635. The highest number of collaborations is in management and business administration, 168 of the total of 635, or 26%. The next most offered discipline for collaboration is engineering and technology/computer application/information technology, having 144 or over 22% of such programmes, followed by hotel management and house keeping, with 132 or over 20%. Incidentally, these foreign collaborations are highly concentrated, in Maharashtra and Delhi, followed by Tamil Nadu. Of the 225 existing collaborations, 83 are with educational institutions from Britain, followed by 79 from the US. Industry experts believe 53 institutions from Britain have their presence in India, followed by the US having 46 institutions, through various collaborative arrangements like twinning (exchange of expertise and students), franchisee, joint provisions and link programmes. The Bill is aimed at not only bringing in investment in the education sector, but also draw in foreign students, besides helping check the flight of Indians to study (then work and settle) abroad. Current trends in the market followed by foreign institutions in India International Academic Partnership Program (IAPP) IAPP is becoming very popular in India. The main purpose of IAPP is to foster linkages between Indian institutions and overseas institutions which focus on building academic linkages to help campuses increase academic collaboration, expand curricular offerings, advance joint research and prepare students for a globalised world through partnerships. The US Government has formed a body which is funded by the US Department of Education's Fund for the Improvement of Post Secondary Education (FIPSE). The aim of FIPSE is to assist US institutions that seek to increase the number of international partnerships between higher education institutions in both the countries. Similarly other countries are following the same trend either by approaching the Indian institutions directly or through some government or private agency.