foreign investment on indian education

7/28/2019 Foreign Investment on Indian Education

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FOREIGN

INVESTMENT ONINDIAN EDUCATION

PRESENTED BY

Tanveer Kaur

Roll No. 2432B.Com (Professional)


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INTRODUCTION

Education in India is among various other elements thathave helped the country to develop. Indian educationsystem is fascinating and it has gradually reached thepresent status with several other contributions.

EDUCATION SYSTEM REQUIRED IN INDIA

Students in India study various subjects and learn basics ofeach subject. Due to this very strong base, Indian studentsshine everywhere.

Current Education System in India With the advancement of the time, Indian education

system is changing and now several schools have startedadopting western style teaching methods.
http://hubpages.com/hub/Is-Modern-Style-Education-System-Required-in-Indiahttp://hubpages.com/hub/Is-Modern-Style-Education-System-Required-in-Indiahttp://hubpages.com/hub/Is-Modern-Style-Education-System-Required-in-India


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History of Indian Education

Not many people know that the first ever university wasresided in India itself, known by the name Takshashila.

In the earlier days, schools were there to educate the child,but now it seems schools are simply running a business toattract parents

EDUCATIONAL FRAMEWORK AND POLICIES University Education

Academic Degree Course

Professional Course

Medical Courses Engineering Course

Management Course

Distance Education in India


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INDIA - HIGHER EDUCATION SECTOR OPPORTUNITIESFOR PRIVATE PARTICIPATION

The Market

Presently about 11 million students are in the Higher Educationsystem. This represents just 11% of the of the 17-23 year oldpopulation. The government hopes to increase this to at least 21%by 2017- a target which still falls short of the world average

Demand-Supply Gap

Indias public expenditure on education (centre plus stateexpenditure) has ranged between 3.26 % and 3.85% from 2004-05till 2009-10 and this needs to increase if it were to come at par with

the expenditure incurred by the developed economies. To reduce the demand supply gap in school education, it has been

proposed in the 12th FYP (2012-17) to set up 6,000 schools at blocklevel as model schools to benchmark excellence.


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Policy Regime

100% FDI in education allowed through automatic route.

A high-powered advisory body - National Knowledge Commission (NKC) set up

Government has identified expansion, inclusion and rapid improvement in

quality throughout higher and technical education system

For higher education, an expenditure of USD 37.13 billion has been projected to

achieve the proposed objectives during the 12th Five Year Plan (2012-17)

The Opportunity for Private

ParticipationGovernment resource allocation

is inadequate to meet its own

targets (30% GER by 2020)leaving enough scope for private

participation.


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REGULATORY FRAMEWORK

Central theme of Regulators and Courts: Education should be a not for profit

activity

The key policy making agencies for higher education are:

Ministry of Human Resource Development

(Higher Education Department)

Central Advisory Board of Education (CABE)

State Councils for Higher Education

University / College Education

A University can be set up only through a legislation passed by Parliament or a State

Legislature. Colleges are either affiliated to a University or are independent.


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University / College Education

A University can be set up only through a legislation passed byParliament or a State Legislature.

Vocational Education The Government has been actively encouraging private

participation in vocational education both through privateenterprises and public private partnerships.

Services in the Education Sector Given regulatory constraints, lack of infrastructure and severe

competition for quality education, there is a large and rapidlygrowing market for coaching and tutoring services impartedthrough new and innovative means

Regulatory Framework- Foreign Institutions Entry of Foreign Entities

While 100% FDI in companies engaged in higher education isallowed on the automatic approval route, regulatory issues haveconstrained the actual flow of FDI.


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AICTE regulations for Foreign Universities

The broad features of these regulations are:

Franchise is not permitted

Fee/seats prescribed by AICTE

Degree/institution to be recognized in the home country Compliance with affirmative action mandatory

For degree granting institutions, affiliation / tie-up with Indian Universitymandatory

Foreign University Campuses Legislation Awaited

The Foreign educational institutions (Regulation of entry and operations) Bill, 2010has been tabled in Parliament.

Key features of the Bill (based on newspaper reports) are:- Own Campus

Franchise route not permitted

Prior Central government approval mandatory

Embassy to certify antecedents of the University

Reservation applicable Fee and admission policy will be regulated

No profiteering/commercialization allowed

Some relaxations for universities of excellence if they fulfill certain conditions

Requirement of a deposit of INR 50 crore (~ USD 10 million) as corpus fund


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Possible Collaborations by a Foreign University / Institution in the

current regulatory framework

GROWTH, KEY ISSUES & CHALLENGES


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Key Issues and Challenges for Foreign Participation

The Not-for-Profit entry barrier for private capital.

UGC not open to recognizing Foreign Universities

Limitations on intake of students (quotas, foreignstudents, mode of admission etc.)

Limited choice of entity Trust, Society or Section 25company

Lack of availability of trained faculty

Low industry interface

Excessive and multiple regulators and regulations


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OPPORTUNITIES FOR PRIVATE SECTOR INVESTMENT

PUBLIC EXPENDITURE NOT ENOUGH TO MEET THE BURGEONING REQUIREMENTS

The Government of India has set itself an aggressive target of achieving 30% GER

in Higher Education by 2020, which translates into doubling the GER in the next 8

years.

To give a perspective, the total allocation to the entire education sector under the

11th Five Year Plan (2007-12) was Rs. 2.7 lakh crore (USD 55 bn) out of whichhigher educations share was only about 30%.


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GROWING ROLE OF PRIVATE SECTOR

The private sectors role in the higher education

sector has been growing at a rapid pace over the last

decade and needs to further expand at anaccelerated rate in order to achieve the GER target.


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EXISTING & FUTURE OPPORTUNITIES FOR PRIVATE & FOREIGN SECTOR

PARTICIPATION

The number of people entering the Indian higher education sector is growing at a

significant rate.

According to MHRD data, enrolments have increased from 15.5 mn (GER of 12.4%)in 2006-07 to 17.3 mn (GER of 15%) in 2009-10*. These figures also reflect an

increasing number of young working-age people who continue in the education

system instead of dropping out.


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In case of PPP, the Government is actively considering the followingmodels

Basic Infrastructure Model

Outsourcing Model

Equity/Hybrid Model Reverse Outsourcing Model

GOVERNMENT INITIATIVES FOR PROMOTING EDUCATION SECTORIN INDIA

The Ministry of Human Resource Development plans to set up tencommunity colleges in collaboration with the Government ofCanada in 2012.

The Government of Gujarat plans to set up a farming educationalinstitute in collaboration with Israel, offering post-graduation andPh.D programmes

The Government of India also plans to set up an Indian Institute ofAgricultural Biotechnology at Ranchi


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FUTURE OF INDIAN EDUCATION SECTOR

Consulting firm Technopak is very positive about the growth

of the sector and estimates private education sector alone to

grow to US$ 70 billion by 2013 and US$ 115 billion by 2018 inits study A Report Card on Indias Education Sector.

There are clear investment opportunities for private players

to enter the Indian education space.

Indias education sector is expected to witness hugeinvestments from PE funds over the next couple of years on

the back of increased Government spending and expansion

plans of private players.
http://www.oifc.in/Investing-in-India/Investment-Opportunitieshttp://www.oifc.in/Investing-in-India/Investment-Opportunitieshttp://www.oifc.in/Investing-in-India/Investment-Opportunitieshttp://www.oifc.in/Investing-in-India/Investment-Opportunities


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CASE STUDY

GLOBALIZATION OF HIGHER EDUCATION THROUGH FDI: A STEP TO BETAKEN OR NOT IN INDIA

Higher education is assuming an upward significance for developingcountries, especially countries including India which is experiencingservice-led growth.

DISCUSSION STRUCTURE OF HIGHER EDUCATION

STRUCTURE OF HIGHER EDUCATION

Knowledge is the driving force in the hastily changing globalized economyand society.

According to United Nations Educational, Scientific and CulturalOrganization (UNESCO), public spending on higher education in India hasone of the lowest public expenditure on higher education per student atUS 406 dollars


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GOVERNMENT INITIATIVES FOR PROVIDING HIGHER EDUCATION

The main governing body at the tertiary level is the UniversityGrants Commission (India), which enforces its standards, advises

the government, and helps coordinate between the centre and thestate.

The foreign universities then have to invest at least 51% of the totalexpenditure for such establishments.

GATS AND HIGHER EDUCATION: India has no multilateral obligation under the WTO to open up

higher education services to foreign participation.

JUDICIAL PRONOUNCEMENTS

The regulation of fee charged by foreign universities is advocatedon the grounds of affordability. However, competition itself canensure that fees remain affordable while promoting quality ofhigher education.


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RECOMMENDATIONS AND SUGGESTIONS

Should form an apex body (with public and private participation) toexercise control over the institutions entering in India

Should monitor the quality of the programmes

Verify the credentials of the investor-institutions

Should ensure that what comes in is real money

That the programmes offered are in accordance with the prioritiesin this country

Revenue generated by foreign institutions should be invested inprimary education so that the base will also get stronger

Alternate education must be promoted

Impediments in the way of setting up for-profit private colleges tobe removed

Repatriation of profits not to be permitted


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CONCLUSIONS

Regulation of higher education in India should beachieved through the correct approach in facilitatingthe attainment of high quality through interaction ofthe profit motives of various providers, private

domestic as well as foreign. A growing number of Indian educational institutions

are commencing to export to other markets.

So, globalization of education services should also be

seen as an opportunity. In short, a pro-active ratherthan defensive approach is required to benefit fromthe liberalization of higher education services.


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THANK

YOU

foreign investment on indian education

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