Opportunities for Private and Foreign Participation in Higher Education

The emergence of India as a knowledge-based, service driven economy has made its human capital its major strength and put the spotlight on severe inadequacies in India’s infrastructure for delivery of education, particularly higher and vocational education. Our report focuses on the potential and opportunities for private and foreign participation in the higher education segment.

While the regulatory regime continues to be onerous, prohibiting a for-profit delivery of formal education and limiting foreign collaboration we believe that the private sector can, and is, legitimately participating in the delivery of higher education. Rapid globalisation, driven largely by technological advancements, has opened up a plethora of new areas in education and training. There has been rapid growth in innovative services to the formal and informal education sectors. We estimate the unregulated market at INR 11,300 crores (USD 2.5 billion) for just three services: skill enhancement and vocational training; test preparation; and textbooks and content.

The key messages of this report are:
• There are immense opportunities for participation of the private sector – both domestic and foreign.
• It is possible to legitimately provide “for-profit” services. This is probably the fastest growing segment in higher education.
• Government should seek to harness the creativity, energy and capability of the private sector and create synergies by working with, rather than in competition with it.

To attract quality private participation, it is essential to allow investors a reasonable and legitimate return on their investment. In the absence of a legal mechanism to earn a reasonable rate of return on investments made, investors are induced to resort to illegitimate practices to secure and siphon off their profits. It is, therefore, critical that the government puts in place a regulatory regime that would oversee the functioning of both public and private institutions in a transparent manner.

 

Report with IAS logo