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Knowledge Exchange | The Knowledge Exchange | Service Tax


By Ms. Neel Mistry

Food, Shelter, Clothing and Education are now the basic requirement of every individual. Right education can bring a paradigm shift not only in a individual's life but also brings a cultural shift in the country as a whole!

India! Is a country of its own kind. Also, considering its potential as an emerging economy, the Indian Education Industry deserves a close look.


The Indian education market is estimated to be worth INR 5.9 trillion in 2014-15 against the expected increase to Rs 602,410 crore ($109.84 billion) by FY15, due to the expected strong demand for quality education. However it suffers from a big time issue called 'Brain Drain'.


Brain Drain Effects

It is worth discussing about how, to redress the significant financial loss in India - not to forget talent drain, when Indians remain in foreign countries to work after completing degrees there – caused by the great number of Indians getting their education abroad.

Hexagon:  Brain drain has become a major concern of the developing countries especially, India. The term, which was emerged in 1960s when the skilled workforce started emigrating from the poor countries to the rich countries in search of better job opportunities and living conditions, became a hot topic of discussion over the years. 

When the expatriates are going abroad in search of greener pastures, India has been losing its major skilled workforce that includes doctors, engineers, scientists and technicians. If we analyse the brain drain trends in India, we could find that there are many reasons why the country fails to hold back its talented youth. 


In the recent years, the cut-offs for admissions became close to 100% in the best Indian universities. While the institutes are in the race of getting the best students in the country, the ambitious youth who fail to meet the "irrational" demands

had to compromise on their dream of occupying a seat in any of the prestigious Indian universities. This leads them to explore the scope of higher education abroad. Most of the students who try their luck in higher studies abroad get into good universities as they have an edge over the students from other countries in terms of skills and knowledge.

While this is the case of young students, the academically well qualified people prefer going abroad for higher research because they don't get the best chances, resources and facilities for research in India. 

ASSOCHAM wants “more and more quality educational institutions to be set up in India on the lines of IIT and IIM in order to restrict the outgo of students.” They also say "good quality foreign universities should be encouraged to [set up shop in] India."

Both of these prospects for expanding Indian education capacity, however, appear to be constrained by strict government controls.


'Educate In India' Initiative

“Prime Minister Narendra Modi is scheduled to meet bureaucrats today to discuss the feasibility of allowing foreign universities to set up campuses in India. Apart from setting the ground for positioning India as a possible hub for higher education, such a move can also incorporate plans for an 'Educate in India' programme to the "Make in India" initiative.” June 11, 2015 Economic Times

Hexagon:  Outdated ideology prevents us from reforming the system to provide better education at a fraction of the cost incurred abroad. The jungle of laws and procedures puts a pall of gloom over every economic activity, including the knowledge industry.

Thus, the focus must, therefore, expand from 'Ease of Doing Business' to 'Ease of Educating' in India.

This Should Work The key to success is the removal of bureaucratic controls and interference with aggressively-promoted competition by professionally-empowered regulators (not controllers).

A policy framework for the competitive supply of education by non-government organisations needs the following elements: Rating Agencies: The University Grants Commission (UGC), All India Council for Technical Education, National Accreditation Council, Medical Council of India and professional councils will register or license rating agencies in their area of authority or expertise. Alternatively, a completely new organisation could be set up for the purpose of accrediting and monitoring rating agencies.

Some of these rating agencies will specialise in specific subjects, but others could cover multiple topics or broad areas. These agencies would devise a system for rating the quality of educational institutions and offer their services to all education service providers, both private and public.

Private Entry: Free entry of registered societies (non-profit) and publicly-listed companies in all fields of education should be subject to the following conditions:

i) Quality Rating: Compulsory rating by accredited agency prior to accepting any fees from students. Ratings must be renewed every year at least for the first 3-5 years. Periodicity of compulsory rating can be reduced thereafter.

ii) Transparent Fees and Accounts: Fees must be published and known in advance. Accounts must be audited and results made public if revenues/fees received exceed Rs 10 lakh. Unaudited institutions must publish their basic accounts (revenues, expenditure, profits, capital investment, number of students, average fee per student) in a prescribed format.

Subsidy Accounting: Any education society that gets below marketprice land or other assistance must give means-cum-merit scholarships to needy students equal in value to the effective subsidy.

Government Grants and Scholarships: An impartial system for determining what would be a fair and affordable contribution of parents to children’s education based on their family income. This system would also calculate eligibility for education loans and grants.

Such an integrated system can be modelled on the government-run online system that exists in the US, but modified to suit Indian circumstances.

The system would ensure that students from the poor and lower middle-classes get the grants and the middle-classes the loans they need to educate youngsters to the level of their capabilities and interest.

Removal/Minimization of Controls and Restrictions: Specifications of particular infrastructure and number of teachers etc would be redundant, as rating agencies would evaluate institutions based on output, peer evaluation and other relevant aspects.


What do we say!

India has witnessed a massive expansion of its educational infrastructure and today it has one of the largest education networks, and third largest reservoir of science and technology manpower in the world. 

India has a large school going population. To accommodate this school going population, it requires a strong educational infrastructure in order to keep pace with the developing economy and provide it with quality manpower

The central issue with the Indian Education system is of the quality and its relevance in the Indian Economic scenario. Followed by, problems of infrastructure and industry participation.

Education can accelerate economic growth and investment is the key indicator to expand and improve quality of education. Thus, the Indian Education industry required more investment, which can lead to good quality education.

The National Mission on Education through Information and Communication Technology (ICT) envisaged by the Central Government shall be instrumental to leverage the teaching and learning process for the benefit of all the learners in Higher Education Institutions in any time any where mode.

This shall also further, prove to be major catalyst for an enhancement in the Gross Enrolment Ratio (GER) at all levels including at Higher Education level, which was only 5 percentage during the XI Five Year Plan period.

Technology enabled learning, has a great scope in the Indian Education market! However, one of the reasons for slower growth than expected is the lack of clear understanding of the problems in the education sector in India, due to which online courseware products fade away very quickly.

The online courseware portals including m-education market explorers, should focus not only, on providing convenient based learning, but also on giving recognized degrees and certificates, for which the Indian Government is already taking steps by incorporating the same along with the PPP-Model, in the National Education Policy.

Further, for online courseware portals, though a majority of their users are from India, they have also witnessed, a significant number of users from abroad also, indicating massive potential market overseas, which remains untapped to a great extent.

Initiatives like e-Yantra, would not only encourage research and development in the Indian Education Industry, but also help in improving the Net flow ratio (%) of -0.6%.

The large outbound mobility ratio, that India has; cannot be ignored. Major reason for the enormous Brain Drain that India is facing, is that the Indian student after studying outside India, is unable to cope with the needs of the Indian economy, since he has no idea about the Indian scenario, which intimately makes him go back to the host country and earn better, ultimately making unable to perform within his home country, India! Hence, India looses its talented, dedicated and hardworking youth to its major destination countries being United States followed by United Kingdom!

In order, to make full of the country’s potential, there is a need to balance and integrate the 'Make in India' with "Educate in India"! Also a cultural shift is required not only for the people involved in the system , including teachers but also on the part of the citizens and learners, which inculcate an attitude of respect towards the contributors of the Education Industry, and also would encourage an environment of constructive learning, which would ultimately bring improvisation on the quality of education industry as a whole!

So dear citizens, Go do your bit!!

To read the full report click here