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Higher education sector needs more FDI: Deloitte report

November 16, 2012

Endowed with the third largest higher education system in the world in terms of enrolments, after China and the US, India needs more foreign direct investment (FDI) to meet its target of doubling the gross enrolment ratio (GER) by 2020, said a report released by global consultancy firm Deloitte Touche Tohmatsu, India, on November 13, in Mumbai, titled ‘Indian higher education sector: Opportunities aplenty, growth unlimited’.

“The private sector’s role in the higher education sector has been growing at a rapid pace over the past decade and needs to further expand at an accelerated rate in order to achieve the GER target,” it said.

The government has set an ambitious target of achieving 30 percent GER in higher education by 2020 from the current level of 15 percent. According to projections, the sector is expected to register a compound annual growth rate (CAGR) of 12 percent from 2008 to reach a size of US $31.47 billion (Rs 1,733,370 crore).

To achieve the target of 30 percent GER according to recent National University of Educational Planning and Administration (NUEPA) estimates, an additional investment of US $190 billion (Rs. 1,046,926 crore) which includes capital expenditure and operating expenditure, is required to be made over the next eight years. “Therefore, given the limited support, which government can provide to this sector in terms of investment, the private sector needs to play a much larger role,” the report said.

Stating that the role of the private sector in higher education has significantly increased in the last decade, the report said, however, due to various impediments, the amount of foreign direct investment attracted by this sector since 2000 stood dismally low at just US $400 million (Rs.2202 crore). Therefore, it is important for foreign investment and experience to flow in this sector in order to transform the domestic higher education institutions into the world’s top league”.

The number of students enrolled in the universities and colleges (formal system) has been reported to be 16 million in the academic year 2010-11, the report said adding,” this does not include enrolment in higher education offered through open and distant learning.

The university and higher education system in India comprises 610 universities and 33,023 colleges.

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