Why Investors Need to Invest in Education Business?

The education sector is considered as the most sought after sectors for investment in India. India is currently a home to over 1.7 million schools, which is one of the largest higher education systems in the world. Every year more institutes are adding up to the list and new edtech companies popping up to join in this big business world of education in India.

The country has become the second largest market for e-learning after the US. The sector is expected to reach US$ 1.96 billion by 2021 with around 9.5 million users.

Even though there is a strong network of the education business, still there is a gap between the education provider and the students, which according to the education ministry can be filled by the investors, in reducing the gap.

How can the gap be reduced? Let’s find out in the following points:

Opportunity to Startups

The education gap can be seen majorly between rural and urban education system. Even the government is finding it difficult to identify the root cause and implementation of new rules and regulations just push the problem beyond reach.

Thus it is important to encourage the startup ideas and potential franchisees, which are willing to bridge the gap. But they always fall short of funds, which is why investors can play a major role in providing the fuels to the startup ideas which die due to lack of funds.

Opportunity to Tie Up with Government

Investors who are willing to invest in Indian education will also get an opportunity to tie up with the government in different initiatives and schemes, which will be fruitful in the long term.

O The government of India made an allocation for school education under the Union Budget 2018-19 is expected to increase by 14 percent, to focus on accelerating existing schemes and quality improvement.

O In order to boost the Skill India Mission, two new schemes, Skills Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) and Skill Strengthening for Industrial Value Enhancement (STRIVE), have been approved by the Cabinet Committee on Economic Affairs (CCEA), Government of India, with an outlay of Rs 6,655 crore (US$ 1.02 billion) and will be supported by the World Bank.

O Prime Minister, Narendra Modi launched the Skill India initiative – ‘Kaushal Bharat, Kushal Bharat’. Under this initiative, the government has set itself a target of training 400 million citizens by 2022 that would enable them to find jobs. The initiatives launched include various programs like Pradhan Mantri Kaushal Vikas Yojana (PMKVY), National Policy for Skill Development and Entrepreneurship 2015, Skill Loan scheme, and the National Skill Development Mission.

O Indian education sector witnessed 18 merger and acquisition deals worth US$ 49 million in 2017.

O The Ministry of Human Resource Development, Government of India is also planning to raise around Rs 1 lakh crore (US$ 15.52 billion) from private companies and high net worth individuals to finance improvement of education infrastructure in the country.