Deloitte Touche Tohmatsu Report Finds FDI Needed To Transform Indian Education Sector

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Indian Education Sector Needs FDI A report by Deloitte Touche Tohmatsu entitled ‘Indian Higher Education Sector: Opportunities aplenty, growth unlimited’ says that, higher education is the one of the largest opportunity in the Indian education sector and it is important for foreign direct investment (FDI) to flow in this sector in order to transform Indian higher education institutions into the world’s top league. Success in leveraging knowledge and innovation that could contribute to hi-tech manufacturing and high value-added services is only possible with a sound infrastructure of higher education. As per projections, the sector is expected to register a CAGR of 12% from 2008 to reach a size of $31.47 billion, the report says.

With the estimated number of students at 16 millions enrolled in the academic year 2010-11 in the formal system, consisting of regular universities and colleges and excluding the enrollment in open universities and distance learning, the Indian higher education system stands only third in the world after US and China.

India is also believed to have the largest higher education systems in the world in terms of number of institutes. The university and higher education system comprises 610 universities and in addition, there are 33,023 colleges. An estimated $13 billion is spent outside the country.

The government has set an aggressive target of doubling the GER (gross enrollment ratio) in higher education from the existing 15% to 30% by 2020. To meet such a target, huge investment will be required in terms of capital and operating expenditure which the government alone will not be able to provide. Thus the role of private sector in higher education has significantly increased in the last decade. However due to various impediments the amount of FDI attracted by this sector since 2000 is dismally low at just $ 400 million.

According to a Deloitte spokesperson, “The foreign education bill and other regulatory reforms when approved will be an icing on the cake”.

Under the regulatory framework, innovative opportunities exist for Indian private and foreign sector players. These could be establishing formal educational institutes under PPP mode and expanding the existing ones and twinning arrangements/ academic and financial collaborations with Indian institutions, course content development, training (faculty and students) and other innovative service offerings for the higher education sector also importantly providing infrastructure services including construction or development.

Also Read : Michigan State University Study on Public & Private School Education In India

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