Market Research India - Higher Education Market in India 2009


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Market Research India - Higher Education Market in India 2009

  1. 1. Higher Education ‐Higher Education IndiaAugust 2009
  2. 2. Executive Summary  Higher education space is regulated by University Grants Commission (UGC)   Market valued at USD 6.5 bn in 2008;  Expected to grow at 12% p.a. to USD 10.3 bn Market  77% of the institutes in higher education are privately owned  Engineering is the predominant course offered by colleges in India Engineering is the predominant course offered by colleges in India  Fundamental shortcomings in the higher education space  Low Gross Enrolment Ratio   Low public spending on higher education Current   Not‐for‐profit mandate of the government and the approach adopted by private players Not for profit mandate of the government and the approach adopted by private players Scenario  Lack of co‐operation between public and private sector  Lack of large players in the market   Introduction of National Commission For Higher Education and Research (NCHER) as the apex  regulatory body in education regulatory body in educationGovernment   Foreign Educational Institutions Bill of 2007 Initiatives  Provisions for higher education under the 11th Five Year Plan  Passing of the Right of Children to Free and Compulsory Education Bill  GGrowing middle class with the ability to afford a private education i iddl l i h h bili ff d i d i  India’s demographic advantagesFundamental   India: Services dominated economy Drivers  Poor perception towards alternative education streams  Growing private players due to large demand‐supply gap  Expenditure on foreign education  HIGHER EDUCATION – INDIA.PPT 2
  3. 3. •Education System in India•Market Overview•Current Scenario•Fundamental Drivers•Government Initiatives•Competition•Key Developments•Key Developments•Appendix HIGHER EDUCATION – INDIA.PPT 3
  4. 4. Indian education system comprises of formal and informal  network of educational institutes Indian Education System Formal Education System Informal Education System Higher  Coaching  Vocational  Schools (K12) Pre‐ Schools Education* Classes Training Multimedia  Public  Private Public  Private in schools  Books and colleges • Under the purview of the Ministry of Human Resource  Development • Higher education comprises graduate/ diploma/  • Informal Education system is free of any regulations professional courses regulated by University Grants  • Not governed by any regulatory body Commission (UGC)  • Professional colleges must operate as not‐profit institutes  set up under a Trust/ SocietyNote: * Graduate and Post‐graduate courses HIGHER EDUCATION – INDIA.PPT 4
  5. 5. Major developments over the years has allowed India to have a well structured regulatory system in place University Education Commission constituted in 1948 UGC established by an Act of Parliament in 1956 UGC established by an Act of Parliament in 1956 Establishment of National Council of Education Research and Training in 1961 Indira Gandhi National Open University (IGNOU) established by an Act of Parliament in 1985 In 1988, the AICTE bill made AICTE the statutory body for planning and development of technical education NCTE vested with statutory status by an Act of Parliament in order to educate teachers in 1993 Establishment of National Assessment and Accreditation Council to access and accredit HEIs in 1994 In 2004, Education Cess levied for raising additional funds. EDUSAT, a satellite dedicated to education, launched In 2009, the government plans on introducing the Foreign Education Bill allowing FDI inflow in higher education HIGHER EDUCATION – INDIA.PPT 5
  6. 6. Indian higher education is decentralized with separate councils responsible for the regulation of different institutions Ministry of Human  Resource Development Department of Higher  University Grants  Education Commission (UGC) All India Council of  Indian Council for  Dental Council of India  Bar Council of India Technical Education  Agricultural Research  Medical Council of  di l il f National Council for  i l il f Pharmacy  Council of  h il f India  Teacher Education  India  Central Council of  Central Council of India Nursing Council  Council of Architecture  Rehabilitation Council  Homeopathy  Distance Education  State Councils of Higher  Central Council for  Council  Council Education Indian Medicine  HIGHER EDUCATION – INDIA.PPT 6
  7. 7. University Grants Commission is the major regulatory body for education in India and receives assistance from various councils University Grants Commission (UGC) • Responsible for the coordination, determination and maintenance of standards of teaching, examination and research in universities • Manages the disbursement of grants obtained from the central government • Monitors developments in the field of collegiate and university education • Constantly advises the Union and State governments on development measures that can be undertaken to improve the higher education system Central Government  Major  Bodies • Provides grants to UGC • Establishes central universities • Responsible for the declaration of education institutions as ‘Deemed to be University’ on the  recommendation of the UGC State Government  • Establishes State Universities and colleges • Provides plan grants for development and non‐plan grants for maintenance of these State  institutions The Central Advisory Board of Education acts as a bridge allowing for coordination and cooperation between  The Central Advisory Board of Education acts as a bridge allowing for coordination and cooperation between the Union and the States with respect to education  HIGHER EDUCATION – INDIA.PPT 7
  8. 8. Major Councils (1/5) All India Council of Technical Education (AICTE)  • Establishes, maintains and regulates the norms and standards in technical education • Its purview includes training and research in engineering, technology, architecture, town p g g g gy planning, management, pharmacy, applied arts and crafts, hotel management and catering technology • Comprises of various bureau’s namely: Faculty Development, Undergraduate Education, Postgraduate Education and Research, Quality Assurance, Planning and Co‐ordination, Research and Institutional Development Administration Finance and Academic Bureau Development, Administration, Major  Council Medical Council of India (MCI)  s • Maintains uniform standards in medical education for undergraduate and postgraduate  programmes • Responsible for recognition/de‐recognition of medical qualifications of medical institutions  in India or those beyond the purview MCI (foreign institutions)  • Registers doctors (permanent/provisional) with recognized medical qualifications Indian Council for Agricultural Research (ICAR)  • Apex body coordinating, guiding and managing research and education in agriculture  including horticulture, fisheries and animal sciences HIGHER EDUCATION – INDIA.PPT 8
  9. 9. Major Councils (2/5) National Council for Teacher Education (NCTE)  • Established as a statutory body in 1995 under the National Council for Teacher Education Act, 1993 • Plans and coordinates development of the teacher education system in India • Its mandate includes equipping teachers to teach at pre‐primary, primary, secondary and senior secondary stages in schools, and non‐formal education, part‐time education, adult education and distance (correspondence) education courses Major  Council s Dental Council of India (DCI)  • Established as a statutory body in 1949 under an Act of Parliament ‐ the Dentists Act, 1948 • Maintains uniform standards of dental education for undergraduate and postgraduate levels  Its roles includes the inspections/visitations of existing Dental Colleges. They must be consulted during  the establishment of new colleges, increase of seats and during the introduction of new P.G. courses  • Prescribes the standard curricula and examinations to be conducted during the training  programme HIGHER EDUCATION – INDIA.PPT 9
  10. 10. Major Councils (3/5) Pharmacy Council of India (PCI)  • Established as a statutory body with the passage of the Pharmacy Act in 1948 g g p g • It regulates graduate level education programmes in Pharmacy y • Its functions include   Maintaining a uniform education standard  Prescribing minimum standard of education required for qualifying as a pharmacist  Setting conditions for the establishment of new pharmacy institutions  Institutions require their approval regarding the study material and examination pattern   Major   Approves qualifications granted outside the territories to which the Pharmacy Act extends i.e. the  Council approval of foreign qualification s  Maintains the Central Register of Pharmacists Indian Nursing Council (INC)  • Established under the Indian Nursing Council Act, 1947 of parliament • Establishes and monitors a uniform standard of nursing education for nurses midwife, Auxiliary Nurse‐Midwives and health visitors Nurse Midwives • Responsible for the registration of Indian and Foreign Nurses possessing foreign qualification • Prescribes the syllabus & regulations for Nursing programs • Power to withdraw the recognition of qualification from an institution maintaining low standards t d d HIGHER EDUCATION – INDIA.PPT 10
  11. 11. Major Councils (4/5) Bar Council of India (BCI)  • Established under the Advocates Act, 1961 as the Apex Body for regulating the legal  profession as well as supervise the standard of legal education in India • Promote legal education and maintains standards in consultation with the Universities in  India and the State Bar Councils Central Council of Homeopathy (CCH)  Major  • Established by the adoption of The Homoeopathic Central Council Bill in 1973 Council • Maintains uniform standards of education in Homoeopathy  s • Registers all practitioners of Homoeopathy in order to maintain the quality of services  provided • Regulates diploma, degree, graduate and post graduate courses • Establishes minimum requirements for the development of such educational institutions Central Council for Indian Medicine (CCIM)  Central Council for Indian Medicine (CCIM) • Established in 1971 under the Indian Medicine Central Council Act • Prescribes minimum standards of education in Indian Systems of Medicine with regard to   Ayurved, Siddha, Unani Tibb • Advises the Central Government in matters relating to recognition (inclusion/withdrawal) g g ( ) • Maintains a Central Register on Indian Medicine which is constantly updated HIGHER EDUCATION – INDIA.PPT 11
  12. 12. Major Councils (5/5) Council of Architecture • Established under the provisions of the Architects Act in 1972 p g p p g • Responsible for the regulation of education and practice of the profession throughout India • The Council overseas the registration of architects, standards of education, recognized  qualifications and standards of practice to be complied with by the practicing architects • Empowered to make recommendations to the Government of India with regard to  recognition and de‐recognition of a qualification Major  Distance Education Council  Council s • Develops a network of open universities/distance education institutions across India  • Establishes an innovative system of University level education by creating an open and Establishes an innovative system of University level education by creating an open and  flexible system with regard to courses offered, eligibility for enrolment, age of entry and  examination system  • Identifies  specific client groups and the types of programmes to be organized  • Decides on the basis upon with financial assistance is received by open universities/ distance Decides on the basis upon with financial assistance is received by open universities/ distance  education institutions  • Co‐ordinates and develops instruction material and designs the fee structure • Sets‐up a Review Committee to asses the performance of various institutions • Oversees procedures and practices of admission evaluation completion of course Oversees procedures and practices of admission, evaluation, completion of course  requirements and transfer of credits HIGHER EDUCATION – INDIA.PPT 12
  13. 13. •Education System in India•Market Overview•Current Scenario•Fundamental Drivers•Government Initiatives•Competition•Key Developments•Key Developments•Appendix HIGHER EDUCATION – INDIA.PPT 13
  14. 14. The education industry in India has been growing strongly with major contributions from K‐12 and higher education segmentsOverview Total Education Market Size and Growth• The education industry in India is valued at USD 50  bn in 2008 USD bn +12% 80 80• It is expected to grow at a 12% CAGR to USD 80 bn by  70 63 2012 60 50 56• Current public spending on education in India is ~  40 3.5% of GDP 20  Central government accounts for 15% of the total Central government accounts for 15% of the total  expenditure while State government accounts for 85% 0• India’s literacy rate stands at 61% 2008 2009e 2010e 2011e 2012eHigher Education Segmented Education Industry (USD 50 bn) Total Expenditure (USD 20 bn) K-12 20% Higher Education Informal Education 40% Foreign  Foreign Indian institutions  Capitation Fee*  institutions  (USD 6.5 bn) (USD 1.5bn)  (USD 12 bn) 40% *Note: Capitation fee are cash transaction between students and  institutes giving the student direct admission without  any evaluation procedure HIGHER EDUCATION – INDIA.PPT 14
  15. 15. The higher education market is expected to develop further due to large scale private and public participationOverview Higher Education Market Size and Growth• The expenditure on higher education in India is  estimated to be USD 6.5 bn in 2008 USD bn 12 +12%• Expected to grow at 12% CAGR to reach USD 10.3 bn  10.3 10 9.2 by 2012 8.2 8 7.3 6.5• Private institutions have been focusing on the area of  6 professional courses like engineering and medical as  4 well as post graduation courses like MBA well as post graduation courses like MBA 2  Private set‐ups account for ~50% of the total medical seats  0 and ~80% of the engineering seats available to students 2008 2009e 2010e 2011e 2012eGrowth in Higher Education Institutions Market Segmentation ‘000 Private Institutes Engineering 23%25 Public Institutes MBA +9% 20.6720 18.81 Medical 17.20 15.75 Others15 14.50 14 50 77% 13.30 11.14 12.15105 1.5% 75.0% 16.7%0 7.8% 2000-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 HIGHER EDUCATION – INDIA.PPT 15
  16. 16. The institutes located in southern and western India account for  the largest intake..  Master of  Bachelor  Master of  Bachelor of  Master of  Bachelor of  Master of  Region  States Engineering/  of  Business  Engineering Pharmacy Architecture Architecture Technology Pharmacy Administration  Andhra Pradesh Andhra Pradesh 170897 19320 15160 625 310 80 10158 Karnataka 58977 12627 10176 2117 360 NA 21270 Kerala 83470 4599 NA NA 180 NA 3960 SOUTH Orissa 20810 3526 1005 416 116 NA 3724 Pondicherry 3201 304 NA NA NA NA 240 Tamil Nadu 132562 28605 2490 906 300 NA 20370 Gujarat G j 16276 1642 NA NA 220 60 540 WEST Maharashtra 76070 9178 7705 1062 NA NA 12225 Rajasthan 25021 2509 2880 390 120 NA 6620 Chhattisgarh 11520 538 NA NA 40 NA 300 CENTRAL Jharkhand 3100 242 60 30 NA NA 180 Madhya Pradesh 52100 4191 NA NA 140 NA 4080NOTE: Data refers to the intake of students for 2008‐09  All States in India have not been covered HIGHER EDUCATION – INDIA.PPT 16
  17. 17. .. of students in the higher education sector Master of  Bachelor  Master of  Bachelor of  Master of  Bachelor of  Master of  Regions States Engineering/  of  Business  Engineering Pharmacy Architecture Architecture Technology Pharmacy Administration  Delhi 5708 1499 216 58 138 345 1280 Haryana 34630 3340 2040 106 74 NA 6085 Himachal Pradesh 2010 282 670 NA NA NA 630 NORTH Jammu & Kashmir J &K h i 2995 438 30 NA NA NA 600 Punjab 22286 3192 NA NA NA NA 1740 Uttar Pradesh 68367 2140 NA NA 210 210 4480 Uttarakhand 3660 312 NA NA NA NA 300 Arunachal Pradesh 180 78 NA NA NA NA NA Assam 1190 351 100 20 NA NA 180 EAST Bihar 2075 324 45 NA 22 NA 730 West Bengal 19408 3289 730 84 54 NA 2425NOTE: Data refers to the intake of students for 2008‐09  All States in India have not been covered HIGHER EDUCATION – INDIA.PPT 17
  18. 18. •Education System in India•Market Overview•Current Scenario•Fundamental Drivers•Government Initiatives•Competition•Key Developments•Key Developments•Appendix HIGHER EDUCATION – INDIA.PPT 18
  19. 19. Summary Fundamental shortcomings in the higher education space Low Gross Enrolment Ratio Low public spending on higher education Current  Scenario ` Lack of co‐operation between the government and the private sector  Mandate of the government and the approach adopted by private players Lack of large players in the market HIGHER EDUCATION – INDIA.PPT 19
  20. 20. Fundamentally, this segment is encompassed by bureaucracy and inefficiency which is deterring growthFundamental shortcomings in the higher education space• The regulatory bodies for higher education in India are perceived to be extremely corrupt and with bureaucratic  complexities ingrained in them• The situation is a case of over‐regulation but under‐governance• This makes the entry of new players and the expansion of operations for existing players difficult• Involvement of politicians with respect to ownership and the large scale lucrative cash transactions due to the shortage  of quality institutes has led to sub‐standard education being imparted to students of quality institutes has led to sub standard education being imparted to students  75% of the educational institutes in Maharashtra are operated by politicians• The curriculum for various professional courses is outdated and is incomparable to global standards• Examination system looks at testing a students capabilities at memorizing information rather than application of the Examination system looks at testing a students capabilities at memorizing  information rather than application of the  discipline learnt• Focus has always been on mechanical learning with minimal inclination towards developing a link with industrial  applications of the subject• Most institutions lack a good faculty which is primarily due to the lack of incentives and the meager salary earned by  teachers in comparison to their counterparts around the world• This is an oversubscribed sector, consisting of many small institutions, with most colleges providing low quality  education which is thus unable to lead to employment generation   80% of the graduates in general streams (B.Sc./ B.A.) are unemployable which has made students weary of enrolling into  professional courses HIGHER EDUCATION – INDIA.PPT 20
  21. 21. India’s low gross enrolment ratio provides opportunity for new and existing players in the marketLow Gross Enrolment Ratio (GER)• India has the third largest volume of enrollments in higher education, after China and the US• However, India’s GER compares poorly to its global counterparts • Furthermore, high dropout rates in primary education has affected the enrolments in higher education   Grade 1‐5 : 29%; Grade 6‐8: 50%; Grade 9‐12: 62%• The planning commission is targeting a GER of 15.5% by 2012 which is an increase from 11% in 2008  National Knowledge Commission has recommended that the Government will need to establish ~1500 universities to  meet their GER target t th i GER t t  The expenditure required in higher education will have to increase to 1.5% of the GDP from the existing level of 0.7%• This translates into a huge potential for about 22 mn students enrolling in higher education institutions by  2012 Enrolment GER (2008) GER (2008) mn % 60% 25 +16% 22.0 60 20 18.6 40% 16.1 15 13.9 40 12.0 10 21% 20 11% 5 0 0 2007‐08 2007 08 08‐09 08 09 09‐10 09 10 10‐11 10 11 11‐12 11 12 India BRIC Developed  US & Canada Developed US & Canada European Countries  HIGHER EDUCATION – INDIA.PPT 21
  22. 22. Public expenditure focussing on primary education has led to an underdeveloped higher education sectorLow public spending on higher education• Public spend on education in India amounts to ~5.2% of the world’s cumulative public spend, but India is  home to 20% of the population in the target group• The investment in the higher education sector increased from 0.67% of the total GDP in FY07 to 0.7% of the  total GDP in FY08 • The share of higher education expenditure as a percentage of total education expenditure has  declined to   19.1% in FY08 from 19.4% in FY06• L k f hi h Lack of higher education infrastructure has made it extremely difficult for India to act as a hub for  d ti i f t t h d it t l diffi lt f I di t t h bf professional education   The current higher education infrastructure can admit only 7‐8% of the college‐age students  India attracts ~ 20,000 foreign students yearly, whereas China attracts more than 0.15 mn students annually• Even though public expenditure on education has been rising the investment per student is one of the Even though public expenditure on education has been rising, the investment per student is one of the  lowest among other major countries Annual public expenditure on higher education per student USD 15,00015 000 11,790 9,62910,000 8,502 4,830 3,986 5,000 2,728 1,024 406 0 Malaysia USA UK Japan  Brazil China Russia India HIGHER EDUCATION – INDIA.PPT 22
  23. 23. Lack of co‐operation between government and private sector entities has hampered public private partnerships  The ‘not‐for profit’ policy of the government has drastically affected scalability in this sector  Issue leading to lack of public private partnerships • Real Estate/Infrastructure partnerships – Building new institutions can be used by private  players in order to generate third party revenue • Technical Partnerships – Link between industries and educational institutions in order to  impart skills in accordance with the needs of the industries addressing the large  i t kill i d ith th d f th i d t i dd i th l employability gap  Media Institute with studio facilitiesOpportunities  Fashion Institute in partnership with a leading retail brand  Engineering college in a tie up with an IT Product company Engineering college in a tie up with an IT Product company • Commercial Partnerships – Creating a self sustaining revenue generation stream which  would fund various capacity building initiatives within educational institutions • Foreign University Partnerships – Collaboration with foreign institutes and universities  towards ensuring high quality education meeting global standards • The unavailability of large scale commercial return has led to an untapped market which  Impact has strong potential HIGHER EDUCATION – INDIA.PPT 23
  24. 24. Private players are working around the governments policies towards generating profits and disbursing dividendsMandate of the government and the approach adopted by private players• The ‘not for‐profit’ mandate of the government towards the establishment of institutions requires  educational institutions to operate as a Society or a Public Trust wherein the profits accrued must be  invested back into the institution with no scope of a profit sharing model i t d b k i t th i tit ti ith f fit h i d l• This has acted as a deterrent for major corporates from investing in this segment  Multi‐layered regulatory approach in this industry has led to 80% of opportunities in the formal education space to be  elusive to commercial activity• Players in the industry are addressing this challenge by using a two‐level structural approach in order to Players in the industry are addressing this challenge by using a two level structural approach in order to  extract profits accumulated by the Trust through an indirect channel Revenue Channel 1: The payment of lease rentals to S1 which provides land, services and infrastructure to the trust 1 Subsidiary 1 (S1) Tuition Fee Trust: non‐profit body generating a Parent Company surplus Teachers Salary Subsidiary (S2) S b idi (S2) Trust need not be directly related  to the subsidiaries 2 Revenue Channel 2: The payment of management fees to S2 which operates the trust providing IP/ content and management services such as content, delivery, canteen, transportation, text books etc.• This allows players to distribute dividends or use it to fund other ventures towards scaling up operations HIGHER EDUCATION – INDIA.PPT 24
  25. 25. In comparison with international markets, India lacks large players due to domestic policiesLack of large players in the market• In comparison to the US which boasts of some of the largest private players in the globe such as Apollos or  Devrys  India lags considerably with the largest private player being namely Manipal University Comparison of revenue figures USD mn 3,000 3 000 2,700 2 700 2,000 993 1,000 180 0 Apollo Devyrs Manipal  University Manipal University• The governments mandate which requires these establishments to operate as not‐for‐profit trusts coupled  with over‐regulation by various bodies has not created any incentive for players to enter or expand  operations towards generating high revenues• The infrastructure required to develop a higher education institute is very capital extensive which deters  players from entering and expanding operations  A medical college requires an investment of ~ USD 5 bn • Long gestation period is a major problem. It has been estimated that it takes approximately 6 years to build  brand equity in this space HIGHER EDUCATION – INDIA.PPT 25
  26. 26. •Education System in India•Market Overview•Current Scenario•Fundamental Drivers•Government Initiatives•Competition•Key Developments•Key Developments•Appendix HIGHER EDUCATION – INDIA.PPT 26
  27. 27. Summary Growing middle class with the ability to afford a private education Demographic advantages India: Services dominated economy Drivers ` Poor perception of alternative education streams Growing private players due to large demand‐supply gap High expenditure on foreign education  HIGHER EDUCATION – INDIA.PPT 27
  28. 28. The rising income levels among the middle class coupled with their willingness to spend on education will drive the marketGrowing middle class with the ability to afford a private education Impact• Education is the second largest expenditure  Distribution of expenditure among the middle class group for the middle class• Economic growth is expected to drive   0 5 10 15 20 25 household income among the middle class  % Food & Grocery 24.5• These two factors namely the willingness to  Education 8.9 spend on education and the rise in purchasing  Entertainment 8.3 power will allow the growing middle class to  power will allow the growing middle class to Mobile Phones 7.7 bid for an education from private institutes Fuel & Transportation 4.3 Stationery 4.3 Aggregate Annual Disposable Income (INR tn) Personal Care 4.2 Communication 3.7 Globals >1000 90 Healthcare 3.2 Strivers 500‐1000 24% Footware 3.1 Seekers 200‐500 90 200 90‐200 Toys & Gifts 3.0 Aspirers 23% Deprived <90 44 Apparels 2.8 15% Loan Repayment 9% 2.3 24 9% 34% 34% Cable & Internet 7% 2.2 49% 13% 33% 15% Household Help 2.2 23% 9% 3% Others 15.4 2005 2015 2025 HIGHER EDUCATION – INDIA.PPT 28
  29. 29. The population breakdown in India suggests that it is one of the most promising global destinations for higher educationDemographic advantages Impact• A large section of the Indian population is at  the age at which an individual would enroll into  Population aged 15‐24 a higher education course a higher education course 0 100,000 200,000 300,000• This number is expected to increase further in  the future driving demand for more institutes ‘000 543• In comparison with other major destinations for  Singapore 689 higher education, India has the strongest  higher education India has the strongest opportunity for growth due to its population  2,815 distribution Australia 2005 2,917 2010 7,841 Distribution of population opting for higher education UK 8,147 mn 42,935 500 449 USA 423 44,880 388 20 24 20‐24 400 353 121 120 112 25‐29 101,544 300 104 111 118 30‐34 Europe 200 94 103 92,976 101 110 35‐39 82 92 100 218,813 73 81 91 100 India I di 0 233,977 2005 2010 2015 2020 HIGHER EDUCATION – INDIA.PPT 29
  30. 30. Dominance of services sector and the perception among individuals towards other forms of learning India: Services dominated economy Impact• The Indian economy has been growing substantially with an average GDP of 8% over the last 3  years• The growing  services sector has led to a large demand for skilled manpower which is expected  to induce growth in the higher education sector 1996‐97 2007‐08 Services 100 100 Industry 44% Agriculture 53% 28% 29% 28% 18%Poor perception of alternative education streams• Individuals prefer to invest in traditional forms of learning, namely professional courses, in order  to attain employment rather than enrolling into vocational training courses• Individuals are not keen on vocational training courses as a diploma course in India is not  comparable to a degree course at the time of employment Share of labour force receiving vocational training % 96 85 86 88 100 50 25 8 0 India Korea Japan Germany Canada Mexico HIGHER EDUCATION – INDIA.PPT 30
  31. 31. The potential in the market is being tapped by private players capitalizing on the demand supply gapGrowing private players due to large demand‐supply gap Impact• The demand supply gap in the market has led to large scale private participation in the higher  education sector in order to tap into the opportunities presented by the ever increasing  demand d d• Over the period 2002‐07, the share of enrollments in private higher education institutions has  risen from ~ 33% to over 50%• Private institutes account for over half the medical and engineering colleges in India and this  share is expected to grow  share is expected to grow• The aversion among students towards institution established by the government will further  the growth achieved by the private players• Large scale private expansion is expected in the higher education space by 2012  800 more private engineering colleges 800 more private engineering colleges  60 medical colleges   300 MBA colleges HIGHER EDUCATION – INDIA.PPT 31
  32. 32. Every year a large fraction of Indian students spend huge sums on a foreign education due to a better system of education High expenditure on foreign education  Impact• Approximately 450,000 Indian students spend ~ USD 13 bn every year on higher education in  the overseas market• Major foreign destinations include Major foreign destinations  include  US: Accounts for 56% of the total students going outside the country to study  France: Accounts for 8.8% of the total  Other major destinations are Australia, Canada, Singapore, China, Korea , Italy, Japan, New Zealand and  South Africa• Thi This creates a strong opportunity for existing players and new entrants to develop quality  t t t it f i ti l d t t t d l lit educational institutions so as to capture a substantial share of investment made on education  abroad Distribution of fields opted for by international students  in the US (2007‐08) Others 100% 13% Education, humanities and agriculture 8% English Language 5% 5% Health professions 6% 8% Fine and applied arts Fine and applied arts 9% Mathematics and computer science 9% Social sciences 17% Physical and life sciences Engineering 20% Business and management B i d HIGHER EDUCATION – INDIA.PPT 32
  33. 33. •Education System in India•Market Overview•Current Scenario•Fundamental Drivers•Government Initiatives Go e e a es•Competition•Key Developments•Key Developments•Appendix HIGHER EDUCATION – INDIA.PPT 33
  34. 34. Introduction of  the National The Right of Children to Free and  Compulsory Education Bill  Commission For Higher Education  and Research Government  InitiativesProvisions for higher education  Foreign Educational Institutions  under the 11th Five Year Plan Bill of 2007 HIGHER EDUCATION – INDIA.PPT 34
  35. 35. Establishment of an independent apex body in India will lead to a major transformation in the higher education spaceIntroduction of an independent National Commission For Higher Education and Research (NCHER) as  the apex body in education  • Oversee the functioning of universities and act as a facilitator for growth in higher Oversee the functioning of universities and act as a facilitator for growth in higher  education and research Role • Responsibilities will entail regulation of quality standards in all branches of higher  education • Universities are expected to become completely autonomous, guarded from interference  by external agencies allowing then to establish good governance, transparency and quality  in education • Universities will   Act as self‐regulatory bodies  Design and the function and structure of programmes Impact  Institutions will be empowered to offer various courses including medical and engineering  programmes • Ending the current regime of multiple regulators thus streamlining the entire education  system • Abolishment of other regulatory bodies namely University Grants Commission (UGC), All  India Council of Technical Education (AICTE) and Medical Council of India (MCI) India Council of Technical Education (AICTE) and Medical Council of India (MCI) HIGHER EDUCATION – INDIA.PPT 35
  36. 36. The bill will allow for a high standard of professional education due to the operational flexibility given to foreign institutions Foreign Educational Institutions (Regulation of Entry and Operation, Maintenance of Quality and  Prevention of Commercialization) Bill of 2007 This bill was proposed in order to allow foreign educational institutions to enter the Indian  This bill was proposed in order to allow foreign educational institutions to enter the Indian Purpose market independently • Allows for profit‐making,  towards making this segment attractive for foreign investors. Major AspectMajor Aspect However, the law does not allow the capital to be taken out of India. • Foreign institution will be in a position to pursue their own methodology and evaluation  system  system • They will have complete freedom to choose the faculty as well as to decide the salary  packages, allowing them to rope in experienced teachers from across the globe • High quality foreign education is expected to lead to the retention of investments in the  Impact country which is otherwise spent on educational institutions abroad country which is otherwise spent on educational institutions abroad • Stronger focus on practical industry oriented learning against the theoretical form of  education in existence • Major repercussions in the Indian education system, domestic (private and government)  q p y g , y institutions will be required to provide better education by revising curricula,  syllabi and  changing the teaching methodology to meet international standards HIGHER EDUCATION – INDIA.PPT 36
  37. 37. Provisions for higher education under the 11th Five Year Plan • Increased the budget for the expansion of higher education facilities to INR 850 bn from  INR 96 bn allocated during the 10th Five Year Plan Budgetary  • Setting up 30 central universities ‐ including one in each of the 16 States so far uncovered Expansion • Expanding and upgrading 200 State Technical Institutions, 8 IITs, 7 IIMs, 10 NITs and 20 IIITs to  accommodate a larger fraction of students in the higher education space d t l f ti f t d t i th hi h d ti • Create a common platform for admission through a Common Entrance Test and/or other  relevant criteria for professional courses under central universities  Admission,  • Adoption of the semester system across institutionscurriculum, and curriculum, and • Ch i th Changing the method of assessment from annual examination to internal evaluation th d f tf l i ti t i t l l ti assessment • Introduction of the Credit System making the system flexible for students  • Dynamic curriculum expected to change every 3 years with industry developments • Introduction of a mandatory accreditation system for all educational institutions y y Accreditation  • Creation of multiple rating agencies with a body to rate these rating agencies and ratings • Department‐wise ratings in addition to institutional rating • Restructuring teacher training programmes towards creating good quality teachers Teachers  T h • C t tl Constantly upgrading the capabilities of teachers through short and long term courses di th biliti f t h th h h t dl t Training • Expansion of research programmes/projects and creating incentive for growth in research  faculty through publicly funded projects/research • Provide quality education in rural areas focusing on skill development by encompassing  Macro  Macro 10 mn students every year and making them  industry ready 10 mn students every year and making them ‘industry ready’Considerations • Plans on reducing the drop out rates to 20% and increase literacy rates to 85% HIGHER EDUCATION – INDIA.PPT 37
  38. 38. The passage of the bill is expected to directly lead to larger demand for professional courses The Right of Children to Free and Compulsory Education Bill  The passage of this bill in 2009 has made education a fundamental right for children in the  Purpose age group of 6‐14  age group of 6‐14 • Provide elementary education to the economically and socially underprivileged class of  y y y p gMajor AspectsM j A t society • Elementary education forms the basis upon which a child is in a position to generate  employment in the long run • Larger enrollments in higher education is expected as a result of a growing fraction of  Impact students who will receive elementary education • This is e pected to lead to a fall in drop o t rates This is expected to lead to a fall in drop out rates  • Restructuring of basic education will make students equipped for higher education system HIGHER EDUCATION – INDIA.PPT 38
  39. 39. •Education System in India•Market Overview•Current Scenario•Fundamental Drivers•Government Initiatives•Competition•Key Developments•Key Developments•Appendix HIGHER EDUCATION – INDIA.PPT 39
  40. 40. Many other private players are also scaling up their operations in   order to capitalize on the strong opportunities in the… Current  Institute Established Streams Offered Business Outlook Network • Plans on investing between INR 3‐4 bn on  developing campuses in Dubai, US and  Amity University Singapore Engineering, Management,  2003 38 colleges • Plans on developing a campus in Ethiopia  Law, Biotechnology with the support of Ethiopian Government • Tie‐ups with international educational  institutions to build brand value Apeejay Education  Management, Engineering,  • Strong associations with industry leaders Society Information Technology,  • Major emphasis on enhancing soft skills 1967 15 colleges Architecture, Fine Arts,  • Encourages student exchange programmes  Communication giving students a global perspective  Gyan Vihar Universe Engineering,  Management  • Creating job oriented courses with constantly  (ISBM), Hotel Management,  1994 6,000 students developing course material through  Pharmacy, College of Post  interactive studies and extensive research Graduation Indian Institute of  Planning and  Management (IIPM) 9 colleges, 5,100  Management and Corporate  • Plans further expansion in their international  1973 students Trainings operationsNote: This list is not exhaustive HIGHER EDUCATION – INDIA.PPT 40
  41. 41. … higher education segment which is being driven by the  demand for professional courses by students in India Current  Institute Established Streams offered Business Outlook network Institute of Chartered  • Plans on expanding operations to 9 States at  Financial Analysts of  an investment of INR 10 bn by 2010 an investment of INR 10 bn by 2010 India  (ICFAI) Engineering, Law,  1984 7 campuses • Foraying into the distance learning segment  Management by offering courses such as MBA , CFA, MCA,  PG, Master in Retail and Pharma Manipal University Medicine, engineering, g g • Plans include building its own campus in Plans include building its own campus in  information sciences, allied  Dubai by 2010 20 colleges, 195  health sciences,  1993 courses across  • Strong focus on research and is the largest  management, mass  14 streams private recipient of funds for research from  communication, hotel  management, fashion design the government Rai University • Strong industry  partnerships towards  25 campuses  developing hands‐on‐learning for students (across India,  13 under‐grad and post‐grad  2005 • Allowing students to access training modules  UK, USA and  courses  through their Rai Open Courseware initiative  Dubai) free of cost Sikkim Manipal  University Diploma, Bachelors • Focusing largely on distance education  550 learning  programmes and Masters courses in  1995 centres, 100,000  InfoTech, Management, Allied  • India’s first university to be built on PPP  students Health ModelNote: This list is not exhaustive HIGHER EDUCATION – INDIA.PPT 41
  42. 42. •Education System in India•Market Overview•Current Scenario•Fundamental Drivers•Government Initiatives•Competition•Key Developments•Key Developments•Appendix HIGHER EDUCATION – INDIA.PPT 42
  43. 43. Key DevelopmentsDate Development The Tamil Nadu Government plans on constituting  a committee to draft a charter for upgrading Government and aided Jul  ‐ 2009  colleges to Universities and enacting a legislation on setting up a Common University.  The HRD Ministry has forwarded certain guidelines allowing for transparency and accountability in deemed universities.  The HRD Ministry has forwarded certain guidelines allowing for transparency and accountability in deemed universities They have proposed that all institutes granted deemed to be university status by the University Grants Commission Jul – 2009  (UGC) must come up with a website with full and complete disclosure of information‘. This move will act as a check  against educational institutions imparting low quality education with inadequate infrastructural capabilities. The Orissa government plans on formulating a new education policy by 2010 to streamline the higher education system.  Policies are expected to include recommendations for curriculum, research, publication, inter‐university synergy,  p , ,p , y y gy,Jul –Jul 2009 rationalization of courses, fee structure, self financing courses, skill development, resource generation, faculty  improvement, programmes with public private partnership.  AICTE approved 85 new self‐financing engineering institutes in Tamil Nadu. This takes the tally of total private engineering Jul – 2008 colleges in the State to 420.Jul Jul – 2008 The incorporation of the the Gujarat Private Universities Bill, 2009 has allowed private universities to enter the State.  The incorporation of the the Gujarat Private Universities Bill, 2009 has allowed private universities to enter the State. Manipal Education, with the introduction of EduNxt, plans on imparting skill development training. EduNxt is a new Jun – 2008 technology infused learning system, which enables a collaborative and interactive environment for learning and includes  small group mentoring, virtual classroom, stimulation and other interactive content. New Zealand has become one of the preferred destinations for Indian students pursuing higher education. Over the last Jun – 2008 six years the number of students going from India to New Zealand has seen a three‐fold increase.  six years the number of students going from India to New Zealand has seen a three fold increase Haryana state government enacted the Private University Act to encourage private sector investment in higher education. Oct – 2008 HIGHER EDUCATION – INDIA.PPT 43
  44. 44. •Education System in India•Market Overview•Current Scenario•Fundamental Drivers•Government Initiatives•Competition•Key Developments•Key Developments•Appendix HIGHER EDUCATION – INDIA.PPT 44
  45. 45. Appendix I – Key Aspects of the bills initiated by the governmentForeign Educational Institutions Bill of 2007• All foreign universities are expected to become Deemed Universities, regulated by UGC• Regulate the entry, operation and maintenance of foreign education providers in order to  protect the  students from sub‐standard quality of education • Foreign education providers a re expected to take an undertaking to maintain a corpus fund of not less than  INR 100 mn and certificate of validation from Embassy or High Commission of IndiaThe Right of Children to Free and Compulsory Education Bill Th Ri ht f Child t F dC l Ed ti Bill• Private schools are required to allocate 25% of seats to the weaker sections of society• Children of the specified age are entitled to be enrolled in the vicinity in their domicile y y g p p p y• For the first five years of the elementary stage, as far as possible, teachers are expected to employ the  childs mother tongue as the mode of instruction • Development of an independent accreditation body for elementary education and major reforms in  examinations conducted • Establishment of a fixed student‐teacher ratio• It is applicable to all of India except Jammu and Kashmir• School teachers are required to obtain an adequate professional degree within 5 years or else will be  dismissed• School infrastructure must improve (if required) within 3 years else recognition will be cancelled• No child shall be held back, expelled, or required to pass a board examination until completion of  elementary education HIGHER EDUCATION – INDIA.PPT 45
  46. 46. Appendix II – State‐ wise segregated information of the students enrolled into various courses in higher education  Bachelor of Engineering Master of Engineering/Technology Index ` Bachelor & Master of Pharmacy Bachelor and Master of Architecture  Master of Business Administration  HIGHER EDUCATION – INDIA.PPT 46
  47. 47. The institutes located in southern and western India account for  the largest intake..  Master of  Bachelor  Master of  Bachelor of  Master of  Bachelor of  Master of  Region  States Engineering/  of  Business  Engineering Pharmacy Architecture Architecture Technology Pharmacy Administration  Andhra Pradesh Andhra Pradesh 170897 19320 15160 625 310 80 10158 Karnataka 58977 12627 10176 2117 360 NA 21270 Kerala 83470 4599 NA NA 180 NA 3960 SOUTH Orissa 20810 3526 1005 416 116 NA 3724 Pondicherry 3201 304 NA NA NA NA 240 Tamil Nadu 132562 28605 2490 906 300 NA 20370 Gujarat G j 16276 1642 NA NA 220 60 540 WEST Maharashtra 76070 9178 7705 1062 NA NA 12225 Rajasthan 25021 2509 2880 390 120 NA 6620 Chhattisgarh 11520 538 NA NA 40 NA 300 CENTRAL Jharkhand 3100 242 60 30 NA NA 180 Madhya Pradesh 52100 4191 NA NA 140 NA 4080NOTE: Data refers to the intake of students for 2008‐09  All States in India have not been covered HIGHER EDUCATION – INDIA.PPT 47
  48. 48. .. of students in the higher education sector Master of  Bachelor  Master of  Bachelor of  Master of  Bachelor of  Master of  Regions States Engineering/  of  Business  Engineering Pharmacy Architecture Architecture Technology Pharmacy Administration  Delhi 5708 1499 216 58 138 345 1280 Haryana 34630 3340 2040 106 74 NA 6085 Himachal Pradesh 2010 282 670 NA NA NA 630 NORTH Jammu & Kashmir J &K h i 2995 438 30 NA NA NA 600 Punjab 22286 3192 NA NA NA NA 1740 Uttar Pradesh 68367 2140 NA NA 210 210 4480 Uttarakhand 3660 312 NA NA NA NA 300 Arunachal Pradesh 180 78 NA NA NA NA NA Assam 1190 351 100 20 NA NA 180 EAST Bihar 2075 324 45 NA 22 NA 730 West Bengal 19408 3289 730 84 54 NA 2425NOTE: Data refers to the intake of students for 2008‐09  All States in India have not been covered HIGHER EDUCATION – INDIA.PPT 48
  49. 49. Bachelor of Engineering HIGHER EDUCATION – INDIA.PPT 49
  50. 50. Course: Computer Science Developed Market Nascent Market  0 10,000 20,000 30,000 40,000 50,000 0 1,000 2,000 3,000 4,000 Andhra Pradesh 45,344 West Bengal West Bengal 3,990 3 990 Tamil Nadu 30,025 Gujarat 2,715 Kerala 18,370 Chhattisgarh 2,470 Uttar Pradesh Uttar Pradesh 15,970 5,9 0 Delhi 1,250 Maharashtra 14,985 Pondicherry 720Madhya Pradesh 13,110 Jammu & Kashmir 690 Karnataka 13,010 13 010 Jharkhand 660 Haryana 8,670 Bihar 580 Rajasthan 6,223 Himachal Pradesh Himachal Pradesh 420 Punjab 5,760 Orissa 4,840 Assam 170 Others 13,695 Arunachal Pradesh 30NOTE: Data refers to the intake of students for 2008‐09  HIGHER EDUCATION – INDIA.PPT 50
  51. 51. Course: Electronics & Communication Developed Market  Nascent Market 0 10,000 20,000 30,000 40,000 50,000 0 500 1,000 1,500 2,000 2,500 3,000 Andhra Pradesh 45,374 Gujarat 2,820 Tamil Nadu 31,678 Orissa 2,473 Kerala 19,785 Chhattisgarh 1,140 Uttar Pradesh Uttar Pradesh 14,590 ,590 Delhi 1,100 1 100 Karnataka 12,710 Uttarakhand 930Madhya Pradesh 9,210 Pondicherry 780 Haryana 7,890 7 890 Jharkhand h kh d 660 Haryana 7,700 Maharashtra 420 Rajasthan 6,400 Jammu & Kashmir 390 Punjab 5,801 Himachal Pradesh 360 West Bengal 3,568 Assam 120 Others 11,223 Arunachal Pradesh 30NOTE: Data refers to the intake of students for 2008‐09  HIGHER EDUCATION – INDIA.PPT 51
  52. 52. Course: Electrical & Electronics Developed Market Nascent Market 0 10,000 20,000 30,000 0 300 600 900 Andhra Pradesh Andhra Pradesh 27,869 Rajasthan j 840 Chhattisgarh 840 Tamil Nadu 21,461 Pondicherry 570 Kerala 8,375 Uttarakhand 570 Uttar Pradesh 7,530 West Bengal 450 Punjab 450 Karnataka 5,565 Delhi 420Madhya Pradesh 4,410 Bihar 360 Haryana 1,500 Jharkhand 240 Gujarat G j t 180 Orissa 1,490 Himachal Pradesh 180 Others  5,160 Assam 60NOTE: Data refers to the intake of students for 2008‐09  HIGHER EDUCATION – INDIA.PPT 52