a quarterly report by - Technopak

perspective
a quar terly repor t by
Volume 02 / 2009
| Volume 02
university over 300 acres of land, with a capacity of 40,000 students is estimated at ~US$ 312 Mn. For the
MBA and engineering institutes, the land value is assumed at ~US$ 520 Bn per acre and for the university
at US$ ~291 Bn per acre. In these ventures, financial returns are attractive, with EBITDA levels of 30% plus
and project IRRs ranging from 25% to 35% levels.
Regulation
Shortage of quality education institutions is a product of India’s tightly controlled regulatory structure.
Education is regulated at both the central and state government levels. Higher education has several
regulatory bodies, including AICTE and UGC, but there is no umbrella regulation for K-12 schools, nor a
uniform law for schools. There are considerable entry barriers and regulations that need to be met, and a
thorough understanding of these is advised.
New Developments in Regulation
in Indian Education
Right to Education Bill Adopted by Parliament
The Indian Parliament has adopted ‘The Right of Children to Free and Compulsory Education Bill, on 4th
August 2009,’ which envisages free and compulsory education to children in the 6-14 years age group.
As per this bill, every school will have to earmark at least 25% seats in class-1 for free and compulsory
elementary education. The bill seeks to do away with the practice of schools taking capitation fees before
admission and subjecting the child or parents to any screening procedure. The bill also seeks to ban private
tuition by teachers and ensure that no child is subjected to physical punishment or mental harassment. It
shall be the duty of every parent or guardian to admit the child to a neighbourhood school for elementary
education and no child should be denied admission for lack of age proof. Seeking to carry out radical
changes in the primary education pattern, the bill states that no child shall be required to pass any board
examination till completion of elementary education.
Stressing the need for a big boost to children’s education, HRD Minister Mr. Kapil Sibal said that out of
every 100 children attending elementary school only 12 reached the graduation level; in Europe it was 50 to
70 (students reaching college from the elementary level) and the global average is 27. The Centre wanted
to increase India’s average to 15 by 2012 and to 30-35 by 2020, he said.
Proposed Reforms in Higher Education
The three-fold objective of expansion, inclusion and excellence has been adopted by the 11th Five Year
Plan, to deal with multiple problems related to access, quality, curriculum and faculty shortage in higher
education. The 11th Plan expects to deal with the problem of access to higher education through expansion.
However, since access is only a part of the problem, simultaneous efforts have to be undertaken not only
to improve the quality of all elements in higher education, but also to address the obvious demand-supply
differences and establish national & international quality standards in all Higher Education Institutions(HEI).
The proposed liberalization in higher education and allowing FDI in the sector, makes the issue of a single
window regulatory body for HEIs even more imperative to facilitate quality expansion.
Mr. Kapil Sibal has stated that the Ministry would reform the current regulatory structure and would push
for a SEBI like regulatory body for the education sector, as well as campaign for FDI to be invested in
education sector. In his words, “We need to create an authority like SEBI in the education sector, which
actually deals with regulation and we need to have an independent credit rating agency that accredits at
the entry point by giving a provisional certificate and when the institution is built, to give a final certificate so
that the intake can take place and we need to get the government out of this and give it to an independent
Forecasting the Financial Potential in Education | 72