Areas of Service
GENERAL INDUSTRY BACKGROUND
The education sector in India is undergoing a gradual makeover since the last few years. Once viewed largely as a charitable or philanthropic activity, it has since metamorphosed into an 'industry' in its own right. Thus far, basic primary education and certain technical institutions for higher education, like the Indian Institutes of Technology and the Indian Institutes of Management have been the mainstay of the Indian education sector. However, due to the rapidly globalizing competitive marketplace, coupled with the increasing need to expand quality education at the grassroots level and spur innovative thoughts, the education sector in India has slowly but surely set itself on the path of modernization. The private sector is leading the way. Several well-known private equity and venture capital funds have also shown interest in the education services and traditional education space. Education is a unique opportunity since it balances investor returns with social responsibilities and aims to uplift communities.
Various segments of the education sector may be represented in the form of a pyramid with the bottom of the pyramid being the least regulated and the top being the most regulated:
IMPORTANT TRENDS IN THE INDUSTRY
India needs to adopt reforms in the education sector at a fast pace. Use of technology in providing online and distance education can be a big game changer in India. In our view, the government needs to improve and support the government education network and at the same time free the private education sector from its current regulatory shackles.
MAJOR PLAYERS IN INDIA1
Some of the successful higher education private sector institutions include Manipal University, Amity University and the Indian School of Business.
Private equity funds such as Premji Invest, Avendus, Kaizen PE, Matrix Partners and Gaja Capital have been focusing on the education sector.
University Grants Commission Act, 1956
University Grants Commission (Institutions Deemed to be Universities) Regulation, 2010
University Grants Commission (Establishment of and Maintenance of Standards in Private Universities) Regulations, 2003 and separate State Acts
University Grants Commission (Promotion and Maintenance of Standards of Academic Collaboration between Indian and Foreign Educational Institutions) Regulations, 2016
All India Council for Technical Education Regulations for Entry and Operations (Grant of Approvals for Technical Institutions) Regulations, 2011
Central Board of Secondary Education Affiliation Bye-laws/Council for the Indian School Certificate Examinations Guidelines for Affiliation/separate State Acts, Rules, Regulations, etc.
Exchange Control Regulations
Income Tax Act, 1961
Transfer Pricing Regulations
Research and Development Cess Act, 1986
University Grants Commission (UGC)
The UGC was set up under the University Grants Commission Act, 1956 to make provisions for the co-ordination and determination of standards in universities. Its mandate includes:
All India Council for Technical Education (AICTE)
The AICTE was set up under the All India Council for Technical Education Act, 1987 (AICTE Act) with a view to ensure:
Distance Education Bureau (DEB)
Statutory Professional Councils
Statutory Professional Councils are responsible for recognition of courses, promotion of professional institutions and providing grants to undergraduate programmes and various awards. The Medical Council of India, for instance, is empowered to prescribe minimum standards for medical education required for granting recognized medical qualifications by universities or medical institutions in India. It is also responsible to give its recommendations to the Government for establishing new medical colleges. Similarly we have other statutory councils, some of which are as follows:
Each of these statutory councils has been empowered to prescribe standards and formulate regulations with respect to their field of jurisdiction.
Central Board of Secondary Education (CBSE)
The CBSE functions under the overall supervision of the Controlling Authority which is vested with the Secretary of Education, Ministry of Human Resource Development, Government of India. It was set up with the view of
schools intending to partake in the pattern of examinations prescribed by the CBSE are required to be associated or affiliated with the CBSE.
State Boards (under State Acts/Regulations/Authorities)
Education is governed by both the Central and the State Governments. While boards such as the CBSE prescribe standards for education under the aegis of the Central Government, the State Governments regulate the education sector within their respective States through State-specific legislations.
Although investment in the sector may be plagued with challenges (in terms of investing, extracting returns and exiting), it offers great opportunity to investors. A number of studies and reports indicate the strong returns that could be expected from the sector. With about 50% of India's population being below the age of 25 years and the presence of a severe shortage of institutions delivering high quality education and training across segments, what is present before the investors is a timely opportunity. With good foresight, strategic planning and by retaining legal counsel with prior experience in dealing with these issues, investors interested in investing in education could overcome these challenges and generate favorable returns.
1 The list herein is not meant to be exhaustive
2 The list herein is not meant to be exhaustive
3 The list herein is not meant to be exhaustive
4 The list herein is not meant to be exhaustive