The Indian government spends more than 14% of its total expenditure on education. During Union Budget 2012-13, the Finance Minister Pranab Mukherjee announced plans to spend Rs. 61,472 crore to strengthen school education. The projected spend is 18% higher than last year’s allocation of Rs. 52,000 crore. India spends 3.85% of its annual GDP on education vis-à-vis the developed countries which spend upwards of 10% of their GDP on education.

The opportunity presenting itself before India’s education sector is immense in potential and depth. India is a country of 1.21 billion people with a socially and economically progressive middle class. Education is one of the largest sectors of the Indian economy. And the nation’s prime focus today is the 13-million student population. Education is estimated to be a US$ 120 billion business opportunity in India. The country’s sustained economic growth ensures there’s enough and rising demand for quality education. With India’s GDP rising and rural market customers moving up the value chain, consumption is seen rising, which will further push up India’s spend on education.

The education sector is growing by leaps and bounds. To give an estimate of how big the market is: Maharashtra alone has nearly 15 lakh students (9 lakh vernacular medium; 6 lakh English medium) appearing for Xth standard examination every year. Another almost 2.5 lakh students appear for XIIth standard science examination every year

Some key facts

  • Annual education spend (US$ 100 billion) by Indian government and households is larger than that of the U.S at comparable prices.
  • Revenue growth from education is one of the fastest worldwide. Since 2000, education spend has grown at a median rate of 15% per year.
  • India’s education sector is among the world’s top 10 in value terms.
  • Cost of educational services is one of the lowest in the world – less than one-sixth of the global average.
  • Estimated CAGR of private revenue at 19% during 2011-15 is also one of the fastest in the world.
  • Addressable market for private investment in education is ~ US$ 30 billion. This is growing at an annual rate of 17% and is likely to accelerate to 19% during 2012-15Education

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