Education and Skill Development The Business Opportunity

The Opportunity

The Demographic Dividend

q  India – fourth largest economy by 2025.

q GDP contribution to World Economy – 5.5%-6%.

q  Population of India by 2020 would be >1.3 billion.

q Working Population by 2020 q  India: 592 million q China: 776 million

q  The median age: q  India<US<<China<<<Japan

SOURCE : National Youth Policy (NYP) Document 2014

The compelling argument – Employment and Education

+15.8 million – Population Increase

-26% i.e. -4.1 million – Remain Illiterate of drop out before 4th Standard.

-6.6 million – Drop out or fail 10th Standard

-2.2 million – Drop out or fail 12th Standard

0.9 million will only complete higher

education

q About 672 million people out of 1.1 billion are in the age group of 15-59 years, the employable age.

q  Every year the population increases by 15.8 million.

11.7 million

5.1 million

2.9 million

The compelling argument – Employment and Education

5%

70%

25%

New Employment Generation in India – 8.7 million

Organized Sector

Agriculture

Unorganized

7 million

Unemployment generated per year

Population Increase

New Employment

Size and Scale

q  The sprawling education landscape has been estimated at $80 billion. (Source: Technopak)

q  The share of Private ventures is only a miniscule $750 million. (Source: CEO Pearson Education India)

q  The lion share of estimated market share will be materialized in forms of schools, which includes running them or supplying educational aids.

q  There 1.3 million schools in India of which 1.1 million are government.

SOURCE : CNN iReport

Size and Scale

q  The GER (Gross Enrollment Ratio) of India for Higher Education stands at a meager 20% compared to USA 34%, UK 59%, Japan 55% and China 28% (GER).

q Of India’s 1.2 billion population, 44% of the population comprises of children. While India spends only 3.3% of its GDP on education.

q Due to RTE the GER in primarily schools is high at 92%, but the dropout ratios are jaw dropping 50% for boys and 58% for girls.

SOURCE : CNN iReport

What the Govt. spends on education?

SOURCE : Azim Premji Foundation – Analysis of State Budgets : Elementary Education

q  Education is a concurrent subject with states holding the primarily responsibility for implementation.

q  State Government therefore contribute the majority share. Eg: In fiscal 2009-10 74% of the Public spend on education was borne by the states.

State wise Expenditure on Education as a percentage of Aggregate Expenditure

₹2.6 lakh crore Estimated Aggregated Budget Allocation in 2012-13 for States

Union Govt. spend on Education

q Government of India spends on the upside of ₹90,000 Cr in youth through a wide range of programs.

q On the targeted side more than 80% of the funds are allocated through MHRD and MoSJE primarily in forms of grants and scholarships.

q  The public spending on education (% of total government expenditure) was 11.3% in 2012, which should ideally be around 20%.

SOURCE : NYP Document 2014, World Bank Data

Expenditure on Education

0  

50,000  

1,00,000  

1,50,000  

2,00,000  

2,50,000  

3,00,000  

3,50,000  

4,00,000  

4,50,000  

Elementary  Educa5on  Secondary  Educa5on  University  and  Higher  Educa5on  and  

Distance  learning  

Technical  Educa5on   Others  

₹  in  M

illion  

Central  Expenditure  in  Educa2on  During  the  11th  Plan  

Continuing and New Schemes- Govt. of India

Schemes Continuing from Xth Plan

1. Sarva Shiksha Abhiyan (SSA) 2. National Programme of Mid-Day Meals in Schools (MDM)

3. Navodya Vidyalaya Samiti (NVS) 4. Kendriya Vidyalaya Sangathan (KVS)

5. Strengthening of Teachers Training Institutions 6. Information and Communications Technology in Schools 7. Mahila Samakhya

Introduced in XIth Plan

1. Rashtriya Madhyamik Shiksha Abhiyan (RMSA) 2. Scheme for setting up of 6000 Model Schools at Block Level

3. Scheme for providing quality education in Madrasas (SPQEM)

4. Appointment of Language Teachers

No. of schemes according to scheme sizes

Size of Scheme

Elementary Education

Secondary Education

University, Higher Education and Distance

Learning Technical Education Others

2007-08 (RE)

2011-12 (RE)

2007-08 (RE)

2011-12 (RE) 2007-08 (RE) 2011-12 (RE) 2007-08

(RE) 2011-12

(RE) 2007-08

(RE) 2011-12

(RE)

Group 1 (Schemes above ₹5000 million)

2 2 2 5 1 3 2 5 0 1

Group 2 (Schemes b/w ₹1000-5000 million)

2 2 2 4 1 1 2 7 1 1

Group 3 (Schemes b/w ₹500-1000 million)

0 2 2 1 1 3 3 7 2 3

Group 4 (Below ₹500 million) 3 1 8 6 15 10 22 14 20 21

Total 7 7 14 16 18 17 29 33 23 26

Classification of Schemes

Group 4-Over ₹5000

million

SSA

MDM

NVS

KVS

RSMA

Model Schools

Group 3-Between ₹1000-5000

million Strengthening

of Teacher Training

Institutions

ICT @ Schools

SPQEM

Group 2-Between ₹500-1000

million

Mahila Samakhya

Group 1-Below ₹500

million

Appointment of Language

Teachers

0

10

20

30

40

50

60

70

80

Elementary Education

Secondary Education

University Education,

Higher Education

and Distance Learning

Technical Education

Others

Perc

ent

ag

e

2007-08

2011-12

97.99%

1.65% 0.31%

0.06%

Group 1

Group 2

Group 3

Group 4

Groupwise Percentage Expenditure on Education

2011-12 – Expenditure on

Education

Contribution of Cess to Elementary and Secondary/Higher Education Expenditure

   

2007-­‐2008   2011-­‐2012  

Expenditure  (₹ in  

million)  

Cess  (₹  in  million)  

Cess  Going  to  SSA  and  MDM  (%)  

Expenditure  Met  by  Cess  

(%)  

Expenditure  (₹  in  million)  

Cess  (₹ In  million)  

Cess  Going  to  SSA  and  MDM  (%)  

Expenditure  Met  by  Cess  

(%)  

Sarva  Shiksha  Abhiyan  

131710   83160   74,7   63,1   210000   119920   65,4   57,1  

Mid  Day  Meal   66780   28120   25,3   42,1   103800   63420   34,6   61,1  

Secondary/Higher   92900   27160       29,2   292510   42920       14,7  

Distribution of Govt. of India Education Expenditure by type

       

2007-2008 (RE) 2011-2012 (RE)

No. of Schemes

Allocation (₹ in millions)

No. of Schemes

Allocation (₹ in millions)

Group 1 Enrollment Increasing Scheme 7 122.382,20 6 213930

Group 2 Dropout Reducing Scheme 7 61.794,20 8 103047,3

Group 3 Quality Improving Scheme 19 7356,2 17 20314,6

Group 4 Equity in Education 8 3103 11 11678,9

Group 5 Institutional Grant 40 76501,3 43 212943,7

Group 5a School Education 5 20228,8 6 50129,3

Group 5b Higher Education 35 56272,5 37 162814,4

Group 5b(i) University Grants Commission 1 35819,4 1 89274,1

Group 5b(ii) Non-Technical Higher Education 16 4236,6 15 16140,7

Group 5b(iii) Technical Higher Education 18 16216,5 21 57399,6

Group 6 Grant for North-East State 19 23661 29 49707

Group 7 Other Administrative Expenditure   844,1   2029,9

Future Imperatives – Govt. ü  Promoting PPPs implementing the National Skills Qualification

Framework (NSQF). ü  Progressively increase spending on education to 6% of GDP.

ü  Increasing regional equity and access and improving apprenticeship program.

ü  Leveraging maximum efficacy of the dedicated ministry for “Entrepreneurship and Skill Development”.

ü  3 key areas: ü  Ensuring youth can benefit from Skill Devp. Opportunities. ü  Clearly defining stakeholder roles ü  Building interlinkages b/w systems and stakeholders.

Targeted Opportunities

ü  Government has plans to equip over 1 million schools with digital infrastructure, while only 10% have been covered so far.

ü  The expenditure for facilitating such technologies at schools has been estimated at ₹ 1.9 million over 5 years shared between central and state governments.

ü  EDUCATIONAL SERVICES

ü  Provide Content to facilitate education services.

ü  Leverage experience in Indian Education Industry through ICT projects in Govt. schools and Model schools to generate high margin revenue stream.

ICT at Schools

Targeted Opportunities

ü  Govt. of India targets a massive 500 million skilled youth by 2022. (Youth : 15-29 years defined by NYP 2014)

ü  The erstwhile govt. allocated ₹ 1000 crores towards National Development fund (NSDF).

ü  Setup 1500 ITIs in district with uncovered blocks in PPP mode (VGF – ₹ 1500 crores)

ü  Establish 125 new Polytechnics ( ₹ 580 Cr), 580 new community Polytechnics (₹ 1125 Cr).

ü  Vocational Education in 10,000 Sec. Schools (₹ 1000 Cr)

ü  Organized training for 25 lakh BPL youth (₹ 1875 Cr)

ü  Urban Skill and Employability Programs (₹ 2500 Cr)

ü  Skill Building and economic assistance (₹ 3000 Cr)

Vocational Education

Projected Demand by Sector

2015 Sector   Demand  (in  Mn)  Auto   2  to  2.5  

Construc5on   15  Retail   4  to  5  

Healthcare   4  to  4.5  Banking  &  

Financial  services   4.5  to  5    Crea5ve  Industry   0.5  to  0.8  

Logis5cs    

Drivers:  51  Mn    

Total     81  to  83.5    Mn  

Sectors   Incremental  Human  Resource  Requirement  

Mines  &  Minerals   1,754,881  Construc5on   55,191,568  Engineering   1,813,790  

Banking  and  Insurance   3,947,139  Drugs  and  Pharma   1,383,721  

Biotech   1,209,489  Healthcare   20,684,530  Tex5les   86,545,390  

IT  and  ITeS   14,806,299  Tourism   12,478,386  

Agro  and  Food  processing     169,782  Paper   57,976  

Chemicals  and  Fer5lizers    

1,391,948    

Total   201,442,899  

2022

The above shown figures were projected by CII and hence estimate a total demand of 300 million by 2022.

Targeted Opportunities

ü  Provide Quality education to rural children by setting up 6000 Model Schools as benchmark of excellence at block level at the rate of one school per block.

ü  3500 Schools to be setup by State Govt./ UT Govt. in as many Educationally Backward Blocks (EBBs).

ü  2500 Schools to be setup under PPP mode in blocks which are not educationally backward. (Initiated from 2012-13)

ü  Objective:

ü  To have a pace setting role. ü  To try to innovate curriculum and pedagogy. ü  To be a model in infra, curriculum, evaluation and

school governance.

Model Schools

Bricks that have been falling for long

SOURCE : ASER

Stuck between the Outlays, Time for Outcomes

§  It legislates a 9 point approach to measure the infrastructure

facilities at Government Schools. §  Only 4.8% of the schools have all the nine facilities. §  Only in 11.8% there are 8 of 9 facilities. §  Only 33% schools have 7 of 9 facilities. §  More than 30% schools have less than 5 facilities. §  More than 1/3rd of the schools have unusable toilets and the rest

which have are in worst and unhygienic conditions not meant for school children.

SOURCE : Ketki Angre Survey for NDTV

Aspirational Middle Class – The rising Curve

SOURCE : ASER

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