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Quick Guide to India’s Education Industry

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Indian Education Industry

Literacy in India is one of the key deterrents to socioeconomic progress of the country. The Indian literacy rate currently stands at 74%, which is very well below the world average literacy rate of 84%.

In India the median age is 25 years, which results in over 550 million people below the age of 25 years and over 32% of the 1.1 billion Indian population between the age group 0-14. The numbers are pretty shocking as it indicates that the number of people in India who need primary and secondary education in itself exceed the entire population of the United States.

Segments of the Indian Education sector

The Indian Education sector can be segmented under four broad heads as elucidated as under:

  • Schooling
  • Higher Education
  • Vocational
  • Education & Skill Development and Ancillary (Test Prep and Techno Solutions).

The schooling segment which is the most basic education requirement for the development and upbringing of the child covers the largest population of our society as compared to any other form of education. The segment is also the largest education segment valued at USD 44 billion in 2011 and is expected to reach USD 144 billion by the year 2020.

The Indian Education sector Statistics

We have the highest Kindergarten to Grade 12 (K-12) population globally, the number of enrolment in schools across pan India is one of the lowest. In senior secondary level too, the enrolment numbers are quite shocking and is very low. Data from Ministry of Human resource clearly indicates that the enrolment percentage has fallen from 113% at primary level to 81% at middle school. The numbers have fallen significantly as we go higher in the ladder with 31% at secondary & higher secondary levels.

It is a well known fact that India has a huge population which is residing in the rural areas. Under development or less development in such areas has resulted in low enrolment and high drop-out rates. These are mainly caused by factors such as low availability of schools, low awareness, prevalence of child labor among lower income strata, gender inequality, and child marriage which still prevails in some of the most backward areas in India. It is reported that currently about 11 million students are in the Higher Education system which represents just 11% of the of the 17-23 year old population. Indian government with its five year plans and other budgetary policy aims to increase the number to 21% by the end of 2012 which will still remain highly below the world average.

Read about Education Companies in India – Bad Government School Education offers Huge Market.

Issues of the Indian Education Sector

By now it is very well understood that the sector suffers from imbalanced growth across the country:

  • The rural areas which represent about 65% of the total population, have just 20% of the total professional colleges
  • Similarly about 58% of all Higher Education Institutions (HEIs) are located in six states of south India
  • R&D expenditure is low at 0.81% of GDP compared to 1.13% in China & 2.60% in US
  • The student- teacher ratio at 26 is high compared to BRIC avg. of 16 and developed economy average of 15.3 which further adds to the complexities.

Faculty shortage continues to be a major problem in the Indian economy which highly impacts the quality of Higher Education in the country. Currently, about 25% of Faculty positions in Universities remain vacant while 24% of faculty in universities and 57% in colleges are without PhD degrees. This represents a lack of quality graduates in the country. Change in the attitude of individual towards teaching or research as a profession has affected the sector hugely. Private investment in setting up educational institutions has been see recently from past few years in the country but there remains a glaring mismatch in demand and supply which is high in case of quality institutions.

If we talk about the management institutes for example we see that currently only 1 out of approximately 150 applicants get admission into the elite Indian Institute of Management (IIMs) as compared to the ration of 10 for MIT. The fact very well proves the recent data which reported 450,000 odd Indian students spending over USD 13 billion each year in acquiring higher education overseas.

Government’s Role in the Indian Education

The role of the Indian government has improved over several years. It has been actively involved in encouraging private participation for vocational education. Government uses the methods of both PPP and private enterprises for such development in the country. Incentives like financial assistance for public private participation in Industrial Training Institutes were also announced by the government to invite active participation. AICTE and Ministry of Human Resource  Development (MHRD) jointly launched the National Vocational Education Qualification Framework (NVEQF) to be implemented in polytechnics, engineering colleges and other colleges in the university system from 2012-13, which is expected to cater to see at least 5 million students  applying for vocational degrees and diplomas every year.

This improve in the numbers will result in increasing self-employment and other meaningful employment thus helping the economy to grow at a rapid pace. Because of lack of infrastructure and severe competition for quality education, there is a large and rapidly growing market for coaching and tutoring services imparted through new and innovative means, particularly the internet. Also the corporates are increasingly outsourcing skill training activities to specialized institutions.


Thus as last but not the least to conclude we can say that the state of Indian economy in terms of education industry has been highly unacceptable. The recent reforms has definitely brought in new home for the sector but transforming education in India cannot be met by quick-fix solutions or isolated reforms. It needs to be accomplished in a timely and phased manner with proper planning and policy making which invites leadership skills that is ready to take the challenge only to see better and shining India tomorrow.

I strongly believe in spreading education among the underprivileged kids. BN Foundation is formed to help the underprivileged children on a monetary basis to continue their education. The Chairman strongly believes that Education is not just a preparation for life; it’s a life in itself.


Niraj Satnalika

Niraj is an MBA in International Business (Finance). Prior to this he completed B.Tech in Electronics and Instrumentation. He is currently working with Confederation of Indian Industry (CII), Kolkata in capacity of Consultant. Satnalika is actively involved with an NGO and works towards promoting education among the underprivileged.

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