INDIAN EDUCATION SYSTEM

The Indian higher education system is facing an unprecedented

transformation in the coming decade. This transformation is being driven by
economic and demographic change: by 2020, India will be the worlds third
largest economy, with a correspondingly rapid growth in the size of its
middle classes. Currently, over 50% of Indias population is under 25 years
old; by 2020 India will outpace China as the country with the largest tertiaryage population.
Despite significant progress over the last ten years, Indian higher
education is faced with four broad challenges:

The low quality of teaching and learning: The system is

beset by issues of quality in many of its institutions: a chronic
shortage of faculty, poor quality teaching, outdated and rigid
curricula and pedagogy, lack of accountability and quality
assurance and separation of research and teaching.
Constraints on research capacity and innovation: With a
very low level of PhD enrolment, India does not have enough
high quality researchers; there are few opportunities for
interdisciplinary and multidisciplinary working, lack of early stage
research experience; a weak ecosystem for innovation, and low
levels of industry engagement.
Uneven growth and access to opportunity: Socially, India remains
highly divided; access to higher education is uneven with
multidimensional inequalities in enrolment across population
groups and geographies.

The three central pillars of the governments plans for education reflect
these realities: expansion, equity and excellence. Over the next five years,
every aspect of higher education is being reorganized and remodeled:
funding, leadership and management, quality assurance, accountability,
relationships with industry, international collaboration and the way teaching
and research are conducted. Emphasis will be placed on strengthening
existing institutions. In arguably the biggest reform in the governance and
funding of state universities, an ambitious program is underway to devolve
authority and budgets for higher education from federal government to the
state governments

The private sector, which currently accounts for 59% of all tertiary
enrolment, continues to grow rapidly, providing most of the professional
courses, particularly engineering and management. Many more providers are
waiting for legislation which would allow them to enter the market. The
private sector is expected to play a significant role in the future expansion of
higher education in India.

K to 12 education institutions in India: a brief

overview
A brief overview of the Indian higher education system provides an essential
backdrop for the following research findings and comments.
There are three main types of tertiary institution in India: 1) CBSCE schools,
2)ISCE schools, 3) State schools.
TYPE OF
INSTITUTION
CBSCE
ICSE

NUMBER OF
SCHOOLS
15000
2400
TOTAL

AVG. NO OF
STUDENTS
1200
800

TOTAL
18000000
1920000
19920000

Kindergarten to Grade12 (K-12) is Indias core education market. The failure

of the public education system to provide high quality education (and even
universal education), together with a high propensity within Indias middle
class to spend on education, results in a shortage of quality private schools
relative to demand. It is the most attractive segment for private sector
investment within the education sector. In estimating market potential, we
have broken our analysis into four parts the number of children, the
number of private schools, the breakdown of students between public and
private schools and those not in school, and potential demand for private
schools. We estimate unaided (no grants from the government) private
school education amounts to about US$29bn market, with aided private
schools another US$3bn, for a total K-12 market of about US$32bn.

Market size estimation for private schools

Armed with data on the number of private schools (85,000) and
enrolments(1,200 students on average), we approximate the market size at

US$30bn.This does not include one-time admission fees charged by a large

number of institutions, and we have assumed three categories of private
schools:
Unaided premium = 25,000 schools, monthly fee of Rs 2,500
Unaided standard = 35,000 schools, monthly fee Rs 1,350
Aided = 25,460schools, monthly fee of Rs 450

K-12 - Estimate of market size

Total private schools in India
Unaided premium segment, number
of
schools
Annual average fee
Annual income (Rsm)
Annual income (US$m)
Unaided standard private
Annual average fee (Rs)
Annual income (Rsm)
Annual income (US$m)
Aided private schools
Annual average fee (Rs)
Annual income (Rsm)
Annual income (US$m)
Total private K-12 market (US$m)
Total private K-12 market (US$B)

85000
25000

30000
900000
16364
35000
16200
680400
12371
25460
5400
164980.8
2999.6
48560.6
31.7