| New Delhi: India Ratings and Research Pvt. Ltd, a part of the Fitch Group, on Wednesday maintained a stable outlook for the Indian education sector citing improved enrolment in schools and higher education, more government investment and better job prospects.
The rating agency estimated the Indian education market to be worth Rs.5.9 trillion in 2014-15 as against Rs.3.33 trillion in the 2011-12 financial year.
“India’s young demographic would continue to benefit the sector even as protracted infrastructure upgrades and regulatory issues delay timely benefits,” said India Rating in its FY15 outlook for the sector. India has at least 250 million students in schools and some 27 million in higher education. The country has some 1.4 million schools and over 36,000 colleges.
Sunil Sinha, director of India Ratings, said that in the last five years, the higher education sector has expanded significantly but the quality and promise of some of them some colleges have not been up to the mark. In school education, some of the benefits of flagship schemes like right to education and model-school scheme in public-private-partnerships haven’t come through, he said.
This was the reason the agency had pegged the market size of the sector at Rs.5.9 trillion, marginally lower than an earlier estimate of Rs.6.02 trillion, Sinha said. The approved intake of all courses—undergraduate, postgraduate and diploma—grew by 19.8% annually between 2007-08 and 2012-13.
The job scenario in 2014 is better than in 2013, and will further improve in the second half of the year, said Rituparna Chakraborty, senior vice president at staffing and training company Teamlease Services Pvt. Ltd. She said more marketing and sales jobs will become available as companies expand their base to non-metros.
The inherent nature of the education business (strong operating margins) remains intact even when the enrolment slows down. Maintaining operating margins depends on institutes’ ability to reduce costs, India Rating said in a statement. It added that strong and established players are comfortably placed to manage high debts. India ratings, however, didn’t give any estimate of outstanding debt of education sector. Sinha said that a better education loan environment can help the sector and welcomed the provision for extending the education loan subsidy scheme in the interim budget.
On Monday, Union finance minister P.Chidambaram said the government will pay the interest amount of all eligible education loans that were taken till 31 March 2009, but remained unpaid by 31 December 2013. “Timely availability of education loans to students could boost the education sector and provide comfort to enrolment as periodic revision in fees by both the government and private colleges have been eroding affordability,” said India Ratings.
The agency said education expenditure in both urban and rural India grew steadily. In rural areas, it increased annually by 14.8% between FY05-FY12 and in urban areas by 14.62% in the same period. |