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Edu Sector Access Perspectives on education, skill and employment For private circulation only Quarterly Newsletter on the Indian Education Sector January 2013 www.deloitte.com/in

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Page 1: Edu Sector Access Perspectives on education, skill and ... · Edu Sector Access Perspectives on education, skill and employment ... India reaching unmanageable proportions, the focus

Edu Sector Access Perspectives on education, skill and employment

For private circulation onlyQuarterly Newsletter on the Indian Education SectorJanuary 2013www.deloitte.com/in

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Foreword: Education Sector Team 3

Face to Face: Interview with Mr. J.P. Rai, NCSD 4

D Expert: Deloitte's expert viewpoint 6

Industry Updates 12

•RecentTaxUpdates 12

•RegulatoryUpdates 12

Sectorial Nuggets 16

About Deloitte and our service offerings 18

Contents

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Edu Sector Access QuarterlyNewsletterontheIndianEducationSector3

Foreword

Welcome to the first edition of Edu Sector Access!

TheIndianeducationsectorhasbeenwitnessinganumberofregulatorydevelopmentsintherecentpast.AlthoughmostofthesereformsareyettobeapprovedbytheParliament,suchmoveshighlightthepositiveintentoftheGovernmenttoradicallytransformtheexistingframeworkgoverningthissector.Forsometimenow,theIndianprivatesectorhasmanagedtogainastrongfootholdinthissector,however,theforeigninvestment has not been in line with the expectations oftheGovernment.Theforeigninvestors,althoughattractedbythehugepotentialofferedbytheIndianmarket,havenotbeenveryactiveduetovariousregulatorychallenges.AsperthelatestFDIstatistics,theIndianeducationsectorhasattractedameagerinvestment of $661 mn since April 2000. Whilst the servicessector,consistingofoutsourcing,financialservices,testingetc,hasreceivedatotalinvestmentof $36bnduringthesameperiod.

The Indian education sector has over centuries transformed from a gurukul (vedic school), where students resided with the guru (teacher) in the same house to learn, to virtual class rooms wherein a teacher isabletoimpartlearningtostudentslocatedinanypartoftheworldthroughsatellites.ThistransformationhaslargelybeenduetothededicatedeffortsofsomeinnovativeIndianentrepreneurswhohavemanagedtochangetheentirelandscapeofthisindustry.ThesignificantreductionindominanceofGovernmentfundedinstitutionsduetoestablishmentofqualityprivateinstitutionshasalsobeenoneofthekeyreasonsforthischange.

Till2008,thefocusoftheGovernmenthaslargelybeenonformalschool,collegeanduniversityeducationhoweverduetothenumberofunemployedyouthinIndiareachingunmanageableproportions,thefocushasnowshiftedtoskilldevelopmentandvocationaleducation sector. The Government has formulated theNationalSkillDevelopmentPolicytogiveamuchneededimpetustothissectorandhassetanaggressivetargetoftraining500mnpeopleby2022.ThePrimeMinisterhasrecentlysetupastrategicbodyintheskill

development sector, under his direct Chairmanship, to ensuretherightpolicydirectionforthisinitiative.TherewasalsoanannouncementbytheGovernmentforestablishmentofNationalSkillsAuthorityinthenearfuture.

Inthisbackdrop,wearepleasedtointroducethefirsteditionofEduSectorAccess–Deloitte’sfortnightlynewsletter on the Indian education sector. The newsletter will feature an interview with an eminent personfromthissectoralongwithanarticlebyasenior member of the firm. In this edition, we are pleased to present an interview with Mr.J.P. Rai (ex-IAS), Executive Director at Prime Minister's National Council onSkillDevelopment(NCSD),whichisanadvisorybodyentrustedwiththetaskofdevelopingstrategy,envisioningreformsandmappingthegapsintheskilldevelopment sector. We are also pleased to include anarticlebyMr.VedamoorthyNamasivayam,HeadofGUIDe(Government,Utilities,Infrastructure&Development)practiceatDeloittefocusingontheEducationsector,whohasworkedverycloselywiththe Central and State Governments in this sector. The newsletter will also provide information on latest sector newsandtax&regulatoryupdates.

TheeducationsectorinIndiaisatanevolvingstagewithanumberofimportantinitiativessuchasRighttoEducation,NationalCommissionforHigherEducationandResearch(NCHER)andForeignEducationBillfacinganumberofchallengesinapprovalandimplementation.Despitethesechallenges,weareoftheviewthatthesearetrulysomeexcitingtimesfortheIndianeducationsectorandsincerelyhopethatEduSectorAccessservesitspurposeofcontributingtotheknowledgeofitsreaders.

Wewouldbepleasedtoreceiveyourfeedbackandsubscription requests on [email protected].

HappyReading!

Deloitte Education Sector Team

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Face to Face

TheGovernmentsattheCentral&Statelevelhavealwaysbeenfocusingontheskilldevelopmentinitiativesastheydirectlyimpactthelivelihoodofouryounggeneration.TheNationalSkillDevelopmentPolicywasformulatedbytheGovernmentinthisregard.TheNationalCouncilonSkillDevelopment(NCSD)hasfurther been set up under the Prime Minister’s Office withtheprimaryobjectiveofdevelopingstrategyforskilldevelopment at the national level in order to address theskilldeficit.The Deloitte in India team, led by Mr. K. R. Sekar, Education Sector Leader, including Mr. Vedamoorthy Namasivayam, Leader Public Sector and Mr. Rohin Kapoor, Senior Manager, recently met Mr. J. P. Rai (ex-IAS), Executive Director, NCSD, leadingallstrategicefforts,togetadetailedoverviewoftheprogressmadesofarandthewayforward.Excerpts:

Q1: Can you guide us on the role, vision and objectives of the PM’s NCSD?Ans:PM’sNationalCouncilonSkillDevelopmentwasanorganizationsetupundertheNationalSkillsPolicyof2009.TheCouncilischairedbythePrimeMinisterandmanyofthehonorableCabinetMinistersareitsmembers.Thereareafewexpertsfromtheindustryandtrainingassociationswhoareonboardasadvisors.Thecouncilisanapexbody,whichlaysdownbroadpolicyframeworkandguidesthePrimeMinisterintheskilldevelopment sector.

Therearetwootherorganizationsthatplayavitalroleinthissector.OneistheNationalSkillDevelopmentCoordinationBoard(NSDCB),housedinthePlanningCommissionandchairedbytheDeputyChairmanofthePlanningCommission.Theroleofthebodyistoensurecoordinationamongthe18oddministrieswithinthegovernmentofIndiaandtheStateGovernmentswhoareimplementingskilldevelopmentprograms.

TheotheroneistheNationalSkillDevelopmentCorporation(NSDC),whichisaprivatesectorbodywith51percentequityownershipbytheprivatesectorand49percentbythegovernment.Itismandatedtocatalysethecreationofadditionaltrainingcapacitywithintheprivatesectorthroughsoftloans.

Q.2: The Government’s focus on the skill development sector started about 4 years back with enactment of the National Policy on skill development. The policy has set an aggressive target of training 50 crore people by 2022. Do you

think that this target is attainable and how satisfied are you with the results of the last 4 years?Ans:ItisaverytoughtargetbutIamsureifweworkhardenough,everythingisattainable.WhiletherehasbeenanincreasedfocusonSkillDevelopmentinthelastfouryears,itisnotanewinitiative.Thevariousministries,whethertheyareorganizedonsectoriallines,functionallinesortargetpopulationlines,allofthemhavehadschemesforimpartingskillstocitizens,enablingthemtoengageineconomicallyproductiveactivity,andinthatsense,thesewereallpartofSkillDevelopment.Whathashappenedinthelast4yearsisthatthefocusonskilldevelopmenthasbeensharpened,andthereisanaddedsenseofurgency.

Thetargetof50crore,inmyview,isanaspirationalnumberandmyunderstandingisthatifIndiaisgoingtorealizethefulleconomicpotentialofferedbyitsyouthfuldemographics,50croreisthenumberofpeoplewhowillneedtobeskilledorup-skilledby2022sothateverycitizenintheworkingagebracketof15-59isactuallyworkingandiscontributingpositivelytotheeconomy,andisnotdependentonanyoneelse.Thatwouldbeonthesupplysiderequirement,basedonourpopulation.

Thedemandsideoftheequationisrepresentedbywhattheeconomycanabsorbby2022.SkillgapanalysiscommissionedbyNSDCinrespectof20keysectorsoftheeconomyprojectsanaggregaterequirementof34croretrainedmanpowerby2022.Iftheeconomyweretogrowatamuchfasterpacethanassumedinthesestudies,itispossiblethattheentire50crorepeoplecouldbeabsorbed.So,the50crorenumberhastobeseen in this certain context.

Q3. What are the major challenges which can be encountered during this journey?Ans:Challengesaremanifold.Clearlythebiggestchallengeiseffectivelymusteringtheresourcesneededforskillingthisverylargenumberofpersons.Morethanthefinancialresources,adequatenumberandqualityoftrainingprovidersandtrainersposesanevenbiggerchallenge.Thiscan’tbeagovernmentinitiativealoneandhastobecomeeverybody’sprogram,withindustryplayingapivotalrole.

Further,about90percentofourworkforceisintheunorganizedsector.And,reachingouttothisworkforceorupgradingtheirskillsisahugechallenge.

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Edu Sector Access QuarterlyNewsletterontheIndianEducationSector5

WeareengagingwiththeNGOsandutilizingtheiroutreachabilitiestoworkwiththeinformalsector.WeareexploringwaysinwhichwecanusethePanchayatiRajbodiestoreachouttotheinformalsector.Whenyouareskillingpeopleonelaysemphasisonhowbesttotrainandabsorbthepeople,asfaraspossible,locally.Butagainmovementsandmigrationsacrossthecountryare inevitable.

Q4: You were talking about industry playing a role in overcoming this challenge. Do you believe that a PPP model will come into play and will work more effectively?Ans:IthinkthePPPmodelisindispensibleineverysphere of this endeavour. The Government is encouragingandaggressivelypromotingpublic-privatepartnerships, whether it is the formation of NSDC, which is a PPP model or the next lot of ITIs is to be set upinthecountry.Thereare3000ofthemplanned;1500immediatelyand1500later–allthisisbeingdoneunder the PPP model.

TheHRDministryiscomingupwith‘ModelSchools’,whichareonceagainbeingdoneinthePPPmodel.Industry’sroleinthePPPmodelisnotmerelyintermsofmobilizingresourcesoractingasemployersbutalsoworkingonlayingthekeycertificationandaccreditationnormsforeachsectorthroughthesectorskillcouncils.Thesearesupposedtobeownedbyindustry.Industryissupposedtolaydownanddefinewhataretheskillsetsneeded,whatshouldbestandardsbywhichthecapabilityofanindividualwillbemeasuredsothathe/shecanbecertifiedtobeappropriateforagivenjobrole,andwhatshouldbetherequisitesforatraininginstitutiontobeabletoimparttheseskills,sothatthetraininginstitutioncanbedulyaccreditedforthesame.

Q5: The existing regulatory regime does not seem to be consistent with the present economic requirements. So what is the reform path, being considered by the Government to ensure that the skilled manpower meets the current demand of the industry and is there a structured way forward?Ans:Clearly,theentireecosystemisundergoingachangeandeveryonedoesrealizethatuntilyoumakeyourecosystemmoreefficientandstreamlined,achievingoutcomesisgoingtobedifficult.Butintermsofreplacingwhatisbecomingobsoletewithsomethingthatismorerelevant,amajorparadigmshiftthathasalreadyhappenedistherecognitionthatIndustryneedstoassumeleadershipoftheentireskilldevelopmenteffort.

Ifyoulookatanysector,thekeyaspectistodeterminewhataretheskillsthatneedtobeprovided,thentranslatingthemintorelevantcurriculumanddetermininghowtotestthecredibilityofthatcertification, which are the institutions that can deliver acertainkindofcapability,whatarethecapabilitiesthattheorganisationneedstohavetobeabletoimparteachaccreditation.Onceyouentrustthesectorstotakeupallthesecriticalelements,therewillbeatimewhentheoldandthenewwillco-existandwewillgothroughthephaseoftransition.Andlikeanytransitionalphasewemightfacecertainissuesbutthedirectionisclear.Inthisentireprocess,clearlyIndustrywillberequired to step forward and assume leadership of the relevantsectorinordertoensurethattrainedyouthareemployable.

Q6: Given the said scenario, what about the aspirations of the people who participate? Today many people, for instance, are being trained in

In conversation: (L to R) Mr. J. P. Rai (ex-IAS), Executive Director, NCSD; Mr. Vedamoorthy Namasivayam, Leader Public Sector; Mr. K. R. Sekar, Education Sector Leader and Mr. Rohin Kapoor, Senior Manager, Deloitte in India

Mr. Rai reading Deloitte's recently published thoughtpaper titled "Indian Higher Education Sector - Opportunities aplenty, growth unlimited!"

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the ITIs but there is a gap between what they are trained on and what is their employability? Secondly, mobility of job holders and seekers lacks considerably, given the absence of a proper framework for people to move up both horizontally and vertically. Goal of motivating and encouraging people to learn is also an important issue. How does the Government plan to address such issues?Ans:ANationalSkillsQualificationFrameworkisbeingformulated.Itwillbridgeandallowmultipleentryandexitpoints,linkingwhatarenowtwoverydiscretesilosofvocationaltrainingandgeneraleducation.Assessmentofcapabilitywillnotbebasedonhowmanyhoursorhowmanyyearsorhowmanysubjectsonelearnt,butontheactualcapabilitytodothejob.Accumulationofcreditswillbebasedontheindividual’scapabilitytoperform.Whetherthisabilitytoperformwasacquiredthroughaformaltrainingprocess,orwhetheritwaslearntthroughdoingthingsis immaterial. The individual is certified for the said level basedonhisability,andinthisway,thesystemwillhaveanin-builtmechanismtorecognizepriorlearningaswell.Fromthatlevel,iftheindividualwantstomoveuptothenextlevelintheothersilo–beitgeneraleducationorvocationaltraining,hewillbeabletodoso.

Q7: In India, we have the “Right to education” but in countries like China, the right to get skilled has been guaranteed. Do you think India is ready for that kind of framework? Or do you see it as a prospective direction to be.Ans:Thatisclearlyaveryimportantpolicydecisionthatonlythetopleadersofthecountrycantake.However,wearealreadymovinginadirectiontotryandequipeverymanorwomanwithskillsneededtobecomeeconomicallyproductive,andthecountryiscommittingthenecessaryresourcesandisdoingeverythingpossibletoreachallsectionsofthesociety.

Q8: A lot of things are happening in this space and a lot of institutions like the NCSD, NSDC, NSDCB etc have been formed and are playing an important role. But there is surely a need for an empowered statutory authority to lead and coordinate and monitor this multi-faceted reform program. Do we propose to have an over-arching body to ensure that our target of skilling 50 crore people by 2022 is achieved?

Ans: Optimisation of the institutional structure, is somethingthatisbeingdiscussed.ThePrimeMinisterinhisRepublicDayspeechdidmentionthattheGovernmentisconsideringcreationofaNationalSkillsDevelopmentAuthority.

Q9: In the future what kinds of policies or regulations are expected in this sector? Will the industry and the academia like ITIs/ITCs, be given the opportunity to participate in the deliberations on the policy aspects?Ans: It is now a standard practice within the Governmentthatwheneveranewpolicyordraftisunder consideration, it is put out on the website to elicit everybody’sviews.Thus,anopportunityisavailableforeveryonetoparticipate.Atthesametime,wearetalkingtovariousstakeholders,includingNGOs,onhowbestcanwepushtheagenda.Theeffortisclearlyontoleverageonthestrengthsofeachstakeholderandbeabletoreachouttoeverygroup,everycommunity,andeverygeographicalarea.Thereisaroleinthisforeverycitizeninthecountry.

Q10: As you are aware, Deloitte is one of the largest professional services firm in the world having a strong global network. According to you, what role, as an organization, can we play in entire skill development sector?Ans:Deloittecanplayakeyrole.Agreatamountofpolicyformulationworkthatisgoingon,andDeloittecould harness its intellectual capital to contribute to this effort.Youalsohavealargepoolofcorporateclients-reachouttothemandgetthemactivelyinvolvedinskilldevelopment efforts in their respective sectors.

Q11: You message to recipients of this newsletter on how could they participate or exploit this programme.Ans:Ithinkthereisaroleforeveryone–fromanindividualtoacorporate.Thevariouswayspeoplecan participate are available on our website (www.skilldevelopment.gov.in).Andweareopentoallsuggestionsandideasthatpeoplewishtosharewithus.Thereisalsoagreatopportunityforthosewishingtogetintothefieldofskilldevelopment.Thedemandisonlygoingtogrow,andboththeCentralandStateGovernmentsareclearlyseekingpartnersfromtheprivate sector to participate in the endeavour.

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Edu Sector Access QuarterlyNewsletterontheIndianEducationSector7

D ExpertSkill development and inclusive growth in India

Vedamoorthy NamasivayamLeader – Public SectorDeloitte in India

IntroductionIndia’sdevelopmentpolicyplannersnowrecognizethatwhilesustainingthehigheconomicgrowthachievedoverthepastfewyearsisimportant,ourpriorityasanationhastobeonmakingthegrowthprocessmoreinclusive.Thishascomeoutquiteprominentlyinthecountry’s11thFiveYearPlanandisalsoexpectedtoguidethevariouspoliciesandprogrammesofthe12thPlan.

Educationisanimportantvehicleforenhancingpeople’scapacities. A proper education foundation provided inschoolsequipschildrenwithappropriateskills,attitudes and values to contribute as effective social andeconomicagentsinthesociety.Universalizingschool education continues to be a thrust area in the countrythroughvariouslegislativeandprogrammaticinterventions(suchastheRighttoEducationact,SarvaShikshaAbhiyaanandRashtriyaMadhyamikShikshaAbhiyaan).

Arecentincreaseoffocushasalsobeenonskilldevelopmentandjob-orientededucation,providedtraditionallythroughvocationaltrainingandotherhighereducationinstitutes,andthisiswhatweintendtofurtherhighlightinthecontextofIndia’scurrentdevelopment realities in this article.

ContextOverthenext15years,theworking-agepopulation(18-59years)inIndiaisprojectedtogrowfrom74.7croreto89.9crore.Withthesenumbers,thisage-groupwillconstitute64%ofthecountry’spopulationin2026,marginallyupfrom63%in2011.Asexpected,UttarPradeshhasthelargestshare,with16%ofthecountry’stotal15-59agegrouppopulation,followedbyMaharashtra(10%)andBihar(8%).Therelativeshareinworking-agepopulationamongstatesisprojectedto remain at almost the current levels up to 2026. The dividendexpectedtoaccrueoutofthisdemographicstructurewilldepend,toalargeextent,ontheabilityofthisgroupofpopulationtoparticipateandcontributepositivelyinthecountry’seconomicgrowthprocess.

Agriculture,asasectorofeconomy,haswitnesseda decline in its share of the national GDP, from 20% to14%between2004-05and2010-11.Duringthisperiod, the Services sector has seen an increase from 53%to58%,whileIndustrysectorhasincreasedmarginallyfrom26%to28%.TheaggregateGDPgrowthintherangeof7-9%overthepastdecadehaslargelybeenbroughtaboutbyagrowthintheServicessectoroutputattheaveragerateof9.3%andIndustrysectoroutputat7.3%.

Theemploymentstructure,ontheotherhand,isstilltiltedtowardsagriculture,whichcontinuestoemploy53%oftheworkforce,mainlyasmarginalcultivatorsandlabourers.ThehighergrowingServicessectoremploys25%oftheworkforce,butabulkofthem(45%)areemployedintherelativelylowproductivesub-sectors, such as trade, hotels and restaurants. ThisistrueevenoftheIndustrysectorwhere36%ofemploymentiscontributedbythelowerpayingconstructionsub-sector.Inalmostallmajorstates,therateoftransformationoftheemploymentstructurehaslaggedbehindthetransformationoftheeconomystructures,resultinginadisproportionatelyhighdependenceonagriculturewheregrowthhasbeensluggishandincomesarelow.AcomparativeanalysisoftheemploymentstructuresamongBRICcountriesshowthatIndia,withabout57%labourforceengagedinagriculturehasthehighestpercentageshareofworkersemployedinagriculturein20081. The comparative figuresforChina,RussiaandBrazilareabout42%,28%and22%,respectively.

1TotalEconomyDatabase,TheConferenceBoard

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Thismisalignmentofeconomyandemploymentstructuresuperimposedontheprojectedchangesindemographicstructureimplythatasignificantgrowthinemploymentopportunitiesinthegrowingandmoreproductivesectorsofeconomywouldberequiredtorealizethegoalofinclusivegrowth.Thisisespeciallyimportantandcriticalgiventhefactthatduringthelastfewyears,theemploymentelasticityofgrowthhasbeen-0.02,thatisforevery1-percentagepointofadditionalGDPgrowth,totalemploymenthasdecreasedby0.02percentagepointsbetween2004-05and2010-11.ThetrendistrueofstateslikeMaharashtra,whosecontributiontocountry’sGDPat16%ishigherthanitsshareinworking-agepopulationat10%,aswellasUPwhichcontributes8%toGDPwitha16%shareofworking-agepopulation.

Therapidlydecliningshareofagricultureasacontributortotheeconomyandthelowerproductivitylevelsindicateitsinabilitytoabsorbtheworkforceintoproductiveopportunities.AlargeproportionofworkforcewillcontinuetomoveoutofAgricultureintomoreproductivesub-sectorsofIndustryandServices.ThetrendisalreadyevidentwhenweseeAgricultureoutputgrowingalongwithareducedworkforce

whileIndustryandServicesgrowthisaccompaniedbyadditionofemploymentopportunities.AsperNSS(66thRound,2009-10),employmentgenerationintheIndianeconomydeclinedsharplywithonly1.25millionnewjobsrecordedinthecountrybetween2004-05and2009-10.

To enable a successful movement into more productive economysectors,thetransitioningworkforcewillrequireskillsappropriateforthetargetsub-sectors.WhilethemajorityofIndianagriculturecontinuestobetraditionalskill-based,thoseinthesectorsexpectedtogrowinfuturewillrequirespecializedtrainingandre-training.Moreover,over90%ofthoseemployedinIndiaareintheunorganizedsector,which,byitsverynature,hasnothadeasyaccesstokeyinstitutionalsupportsystems,includingthoseforskilldevelopment.WithaGrossEnrollmentRatio(GER)inhighereducationatonly13(UNESCO2007),Indiaisstillwellshortoftheworldaverageof26andotherBRICnations.IntermsofvocationaltrainingtooIndialagswellbehindthedevelopedworldwithonlyaround5%ofthelabourforceinthe20-24yearoldagegroupestimatedtohavereceivedformaltrainingin1994whilethefigurewas28% in Mexico (1998) and 96% in South Korea (1998).

Figure 1: International comparison of Higher Education GER and proportion of vocationally trained labour force

Source:ReportoftheTaskForceonEmploymentopportunitiessetupbythePlanningCommission

Source:UNESCOGED2010

5%

28%

64%

68%

75%

80%

87%

96%

0% 20% 40% 60% 80% 100%

India 1994

Mexico-1998

Australia-1998

UK-1998

Germany-1998

Japan-1997

Russian-1998

South Korea-1998

% of Labour force ( 20 -24 yrs)

Cou

ntry

International comparison of proportion of vocationally trained (formal) labour force (20-24 yrs)

13

23

26

34

57

58

77

83

0 20 40 60 80

India (2007)

China

World

Brazil

UK

Japan

Russia

US

GER

Cou

ntry

Higher Eduction GER in different countries (2008)

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Edu Sector Access QuarterlyNewsletterontheIndianEducationSector9

Table 1: Region-wise number of ITIs and seating capacity

The Indian skill development system and key challenges SkilldevelopmentandvocationaltrainingisaconcurrentsubjectundertheIndianConstitutionandboththecentralandstategovernmentsshareresponsibilityonvariousaspectsofthesame.Conventionally,theDirectorateGeneralofEmployment&Training(DGE&T)intheMinistryofLabouristheapexorganizationfordevelopment and coordination at national level while theday-to-dayadministrationofIndustrialTrainingInstitutes(ITIs)restswithstategovernments.ThecentralgovernmentisadvisedbytheNationalCouncilofVocationalTraining(NCVT),atripartitebodyhavingrepresentativesfromemployers,workersandcentral/stategovernmentsonaspectslikeprescribingtrainingstandards, evaluation, certification, and accreditation.

Toequiptheworkforcewithtechnicalcapabilitiesandvariedskillsconsistentwiththedemandsarisingfromindustry,the11thFive-YearPlanhaslaidoutalong-termpolicyframeworkthroughtheNationalSkillDevelopmentPolicy(NSDP)2009.Thepolicyhasoutlinedavisionofdesigningaskillsystemforcreating500millionskilledpeopleby2022whilebridgingthedividesofgender,rural/urban,organized/unorganizedemployment.A3-tierinstitutionalstructureconsistingofthePrimeMinister’sNationalCouncilonSkillDevelopment,SkillDevelopmentCo-ordinationBoardandNationalSkillDevelopmentCorporationhasbeensetuptotakethisagendaforward.NSDCaimstofosterprivatesectorandindustryparticipation,as

wellas,developinganenablingenvironmentforskillsdevelopment,includingpromotionofSectorSkillsCouncils(SSCs)forkeysectorsoftheeconomy.

TheprocessforformulationofaNationalVocationalQualificationFrameworkhasalsobeeninitiated.OthercomponentsoftheskilldevelopmentsystemincludeskilldevelopmentandlivelihoodinitiativesbyNGOs,privatetrainingcentresthatimpartinternaltrainingandCSRinitiatives of corporate bodies.

Infrastructure:VocationaltraininghasbeentraditionallydeliveredthroughITIsthatoperationallyreporttoandarefundedbythestategovernmentsaswellasIndustrialTrainingCenters(ITCs)thatareeitherprivatelyfundedorare‘Government-aidedinstitutions’.TherehasbeenasteadygrowthinthenumberandseatingcapacityofITIsinthecountry.ThenumberofITIshasgrownfrom59in1959to8687in2011.Theseatingcapacityhasincreasedfrom3.89lakhin1992to12.06lakhin2010.Acomparisonoftheregionalspreadofvocationaltraininginfrastructureandproportionofworkingagepopulationshowsthatthesouthernstateshaveperformedbetterthanotherregions,bothintermofnumberofinstitutesandseatingcapacity.Thetablealsohighlightstheneedtofocusonstrengtheningthevocationaltraininginfrastructureintheeasternregion,whichaccountsfor26%oftheworkinggrouppopulation,buthasonly19%oftraininginstituteswithan18%seatingcapacity.

Number ofGovt. ITI

SeatingCapacity (Govt.)

Number of Pvt.ITCs

Seating Capacity (Pvt.)

Total ITIs/ITCs Total SeatingCapacity

Approx. Working age population

NorthernRegion 777 118,818 1,828 204,529 2,605(30%) 323,347(27%) 30%

SouthernRegion 394 90,460 2,802 306,070 3,196(37%) 396,530(33%) 22%

EasternRegion 200 49,242 1,046 173,645 1,246 (14%) 222,887(18%) 26%

WesternRegion 818 194,826 822 76,458 1,640 (19%) 271,284(22%) 23%

Total 2189 453,346 6,498 760,702 8,687 1214,048

Source:AnnualReport2010-11,MinistryofLabourandEmployment

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Expansionoftheinfrastructureshouldconstituteakeycomponent,consideringtheexpectedincreaseinthestudentpopulationemergingoutoftheschoolsysteminthecomingyears.Thisshouldincludephysicalandtechnicalinfrastructuresuchasbuildings,equipment,laboratories,aswellas,othersupportinginfrastructurerequired for all round development of students.

Inaddition,shortageoffacultyandtheirinadequatequalificationsconstituteamajorproblemineducationalinstitutesinIndia.Thereisaneedtofacilitatecapacitybuildingthroughfacultydevelopmentprogramsandfacultyexchangeprogrammes.

Industry orientation:ThetwoflagshipschemesunderthevocationaltrainingsystemaretheCraftsmenTrainingScheme(CTS)andtheApprenticeshipTrainingScheme(ATS).Thereare63engineeringand53non-engineeringtradescoveredundertheCTS;whileATScovers235tradesforschoolpassedcandidates,122engineeringandtechnicaltradesand122fieldsfortechnical (vocational) apprenticeships. Other schemes includetheSkillDevelopmentInitiativeScheme(SDIS)with a focus on modular courses.

Improvingindustrylinkagesis,however,animportantrequirementforenhancingtheskilldevelopmentsystemespeciallyinthecontextofgrowingconcernswithemployabilityoftrainedandeducatedyouth.Curriculumrevisiontomakeitmoreindustryrelevantaswellaseffectiveindustry-academiacollaborationsthroughavenuessuchasapprenticeships,jointprograms,trainersfromindustry,etc.andstrategiestopromoteentrepreneurshipareonesideofthestory.Theotheraspectofindustryorientationisthecreationofindustryreadyworkforceasanoutputoftheskilldevelopmentsystem.Thiscanbeassessedbythequantityandqualityofplacementofcandidatespassingoutofthesystem.Theaimistocreateastructuredbasisforconductingindustry-instituteinteractionsthroughtheentirelifecycleofthetraining.

Access:Skilldevelopmentsystemsmustbeopenandinclusivetogiveeventhemostunderprivileged,includingwomenandpeopleinruralareas,accesstolearningandtraining.TheWomen’sTrainingCellofDGE&Tisaimedatdesigningandpursuinglongtermpoliciesrelatedtowomen’svocationaltraining.Thereareabout1898WomenITIsandwomenwingsingeneralITIsamountingtoaseatingcapacityof70,062

Map 1: State-wise number of ITIs and seating capacity

trainingseatsforwomen.Theopportunityforpeoplefrom all communities / areas to train themselves to lead productivelivesisessentialforreducingpovertyandenhancingtheprosperityofthepeople.Accessshouldbeenhancedalongtheaspectsoffinancialaccess,physicalaccess,informationaccessandaccesstodisadvantagedgroups.

Quality:Qualityintechnicaleducationisakeyfactorthatneedstobeaddressedbythepolicy.Upgradationof500ITIsintoCentresofExcellence,andupgradationof1396ITIsinPPPmodeandnewtraininginstitutesthroughPPPhavebeensomeinitiativestoaugmentinfrastructure facilities at ITIs. There is a need for continuousresearchintothefactorsthatimpactqualityineducationsuchascurriculumdesign,teachingmethodsandassessmentmethodologies.Qualityisanallpervasivedimension;so,performanceofaskilldevelopmentsystemacrossvariousdimensionslikefaculty,infrastructure,industryorientation,etc.determinestheoverallquality.

Management and governance:Thisincludesstrategiesfordevelopingappropriateinstitutionallinkagesamonginstitutes,guidelinesfortheadmissionsprocess,scholarships,studentapprenticeshipprogrammesand tie-ups with national and international institutes.

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RegardingGovernance,aspectslikefinancialandadministrativeautonomy,privateparticipation,accountabilityandstrategiestoensureeffectivemonitoringandevaluationhavetobeaddressed.

Conclusion WhileNSDP2009bringsthefocustoskilldevelopment,thepaceanddiversityofinitiativesrequiredtoachievetheambitiousgoalsofthepolicyisunprecedented.Theprimacytoscaleupthecapacity(infrastructure)andcapabilitiestoskill,up-skillandreskillthecountry’sworkforceshouldnotletthequalityandaccessissueslagbehind.Thereisaneedtocreateanenablingecosystemwithappropriatefocusoncriticalfactorslikefaculty,physicalinfrastructure,managementandgovernanceetc.,whichwillultimatelydeterminethecredibilityofthesysteminthenationalandgloballabourmarkets.Theapproachshouldbepunctuatedbyaconsultativeprocessinvolvingexpertinputs,aswellas,withtheconsiderationsofkeystakeholders,fromboththedemandandsupply-side,alongtheabovementionedaspectstoensurethatthecountry’sresponseto an inclusive and sustainable development is robust and comprehensive.

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Industry Updates

Recent tax updates ADIT v. The Delhi Public School Society ITA No 4344/ Del/2011 dated 28 September 2012 Theassessee,aneducationalinstitutionregisteredu/s12AAoftheIncometaxAct,1961(‘theAct’)runs number of schools under its umbrella. It has also grantedpermissiontoseveralotherentities(‘satelliteschools’)acrossthecountrytoopenschoolanduseitsbrandname‘DPS’.Thesesatelliteschoolshaveadifferentmanagementfromthatoftheassessee.Duringtheyearunderconsideration,theassesseereceivedfranchise fees from the satellite schools.

TheAssessingOfficer(‘AO’),intheabsenceofbooksofaccounts stipulated under section 2(12A) of the Act and resultantlyhavingnotmetthestipulationundersection11(4) of the Act, held that the amount received from the satellite school as franchisee fee is liable to be taxed under section 11(4A) of the Act.

On appeal, the Income-tax Appellate Tribunal (Tribunal’) observed that provisions of Section 10(23C)(vi), refers to"anyincome"andisthereforelargerinscopethanthe provisions of Section 11 of the Act. The assessee wasdulyapprovedasanEducationalInstitutionforthepurposetheaforesaidsectionoftheAct.Anyincome

of an educational institution notified under section 10 (23C)(vi) is exempted.

Further,oneoftheobjectsoftheassesseeistoestablishprogressiveschoolsorothereducationalinstitutionsinDelhioroutsideDelhi.Aperusaloftheagreementunderwhichsatelliteschoolswerebeingsetupbytheassesseealsoindicatesthatapartfromallowingthesatellite schools to use the name of Delhi Public School anditsLogoandMoto,theassesseealsoundertookrenderingofseveralservices.Theseservicesincludeimpartingofeducationandprovidingthenecessarystafftoimparteducation.Hence,itcouldnotbesaidthatthepurposesoughttobeachievedthroughthisagreementforestablishingsatelliteschoolsisnoteducational.

Onconsideringtheotherissuesrelatingbooksofaccount etc., the Tribunal held that the amount received bytheassesseeasfranchisefeesfromvarioussatelliteschools was not liable to tax.

Regulatory updatesAICTE (Grant of Approval for Technical Institutions) Regulations, 2012 and AICTE Approval Process Handbook 2013-14AICTE,thegoverningbodyfortechnicaleducationin

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thecountryhasrecentlyreleaseditsrevisedregulationsandapprovalprocesshandbookfortheacademicyear2013-14.AbriefsynopsisofkeychangesintheapprovalprocessprescribedbyAICTEisgivenbelow:

AICTE Approval Process Handbook 2013-14APrivateLimitedorPublicLimitedcompany/industryhavingturnoverofatleastRs100croresperyearforprevious3yearsshallbeeligibleforestablishingdiplomaorundergraduateorpostgraduateinstitute.TheInstitutesetupbysuchaPrivateLimitedorPublicLimitedcompany/industrycanonlybesetupasaSociety/Trust/Section25companywithalltherelatedrestrictions.

MandatoryappointmentofOmbudsmanineverytechnicalinstituteforgrievanceredressal.

AICTE (Grant of Approval for Technical Institutions) Regulations, 2012•MaximumbatchlimitforPostGraduatePrograminEngineering/Technology/Pharmacy/HotelManagement&CateringTechnology/AppliedArts&Crafts/Architecture/TownPlanninghasbeenincreased to 30 seats (from 18 seats earlier). Also, AICTE has added a batch of maximum 60 seats in Dual DegreeCoursesinManagement(MAM)andMCAtothe definition of the term “Division”.

•AICTEhasdefinedtheparttimeprogramsasactivitiesconductedineveningtimei.e.5.30pmto9.30pm(sixdaysaweek)whereverFirst/Generalshiftworkingexitsandaremeantonlyforworkingprofessionalsorprofessionalswithatleasttwoyearsofworkexperience.

•RestrictingAICTE’smandatetogoverncollaborationsandtwinningarrangementsbetweenIndianandforeignuniversitiesinthefieldoftechnicaleducationonlyinsteadofregulatingentryandoperationofforeigninstitutionsinIndia.

•DeletionofprovisionstatingthatallpromotersoftechnicalInstitutionsandorPolytechnic(TechnicalInstitutionofferingDiplomas)shallrequirepriorapprovaloftheCouncilforconvertingtheexistingAICTE approved technical institutions into a technical campus.

•InsertionofanewclausestatingthatallpromotersoftechnicalinstitutionsandorPolytechnic(TechnicalInstitutionofferingDiplomas)shallrequirepriorapprovaloftheCouncilforchangeofsite/locationoftheexistinginstitution.Therefore,AICTEhasnow

permittedchangeofsite/locationofanexistinginstitutionalsosubjecttoitsapproval.

•TheCouncil,whichearlierdidnotpermitanytechnicaleducationprogramtoberunaseitheraneveningorparttimeprograminanytechnicalinstitution,shallnowpermitonlyUniversityaffiliatedTechnicalEducation/ManagementProgramstoberunasparttimeprogramsinanyAICTEapprovedTechnical/ManagementInstitution.

•InstitutionsnothavingqualifiedPrincipal/Directorfor a period of more than 18 months shall now be liable to be placed under no admission status for oneacademicyear(thisperiodhadnotbeendefinedearlier).

•TheAICTEhasissuedstricterpunitiveactionsagainstthoseinstitutionsnotfollowingtheguidelinesissuedbytheCouncilregardingrefundoffeesoncancellationsofadmissionsordelayingrefunds.Additionalactionsnowproposedinclude-placingthe institution under no admission status for one academicyearandwithdrawaloftheapprovalgrantedbyAICTEfortheprogram/course.

UGC to grant innovation university tag to worthy institutesThe Indian Express; Oct 3, 2012

Impact Assessment:InnovationUniversitywouldberecognitionofexcellencebytheGovernmentforanyinstitute/center.TheuniversitieswillbeprovidedcompleteautonomyinappointingaforeignerasVC,choosingitsownqualitystandardsandadmissionprocessetc.Suchrecognitionwillbecomeakeydifferentiatingfactorbetweentheinstitutesthatprovidebetterqualityofeducationfromothers.

AftermakingwayforforeigninstitutestocollaboratewithIndianones,theUniversityGrantsCommission(UGC)isallsettohelpchartanalternativeroutetosetup‘worldclass’innovationuniversitiesinthecountry.Atarecentmeeting,theUGCdecidedtolaunchaschemeforconferringthetagof“innovationuniversities”and“innovationcentres”toworthyinstitutes. To be implemented in the 12th plan period,theschemewillfundexistingCentralandstate universities as well as the best of deemed to be universitiestoupgradetoaninnovationuniversity/centrestatus,providedtheymeetcertainparametersrelated to innovative research.

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Theminutesofthemeetingsaythatgovernmentvarsities apart, those deemed varsities that were classifiedascategory‘A’bytheTandoncommittee—indicatingthattheymeetallspecifiedcriteria—willalsobeeligibleforaninnovativeuniversitytag.However,nograntsorfundingwillbereleasedtoself-financingdeemedtobeuniversities.TheUGCintendstoextendtheschemetocolleges.

TheUniversitiesofInnovationBill—intheworkssince2009andintroducedintheLokSabhainMay2012—aimsatestablishingvarsitiesthatwillencouragesuperlativeacademicqualityandresearchoutput.Theseweretobesetupeitherbythegovernment,privateentitiesorthroughpublicprivatepartnershipsandofferunmatched academic freedom.

TheBillprovidesforupgradationofuniversities/institutes to the status of innovation universities, providedtheymeetcertaincriteria—asuggestionmadebythePlanningCommission.Itpromisesaflexibleframeworkallowingfreedomtoappointaforeignacademicianasavice-chancellor,inviteapromisingstudenttojoinasfaculty,allowvarsitiestodevicetheirownmerit-basedadmissionprocess,individualqualitystandardsfreefromUGC,andtokeepthevarsityoutofCAG’s ambit.

CBSE to launch vocational courses in classes 9 & 10The Times of India; Nov 23, 2012

Impact Assessment: Introduction of vocational coursesfromsecondarylevelwillprovidetheschoolchildrenanexposuretoskilltrainingatanearlystageandopenupvariousavenuesforthembythetimetheycompletetheirschooling.Thisdefinitelyis a positive step which will help the Government in creatingacompetentpoolofskilledmanpowerandintellectual capital in the next decade.

TheCentralBoardofSecondaryEducation(CBSE)willsoonlaunchtheNationalVocationalEducationalQualificationFramework(NVEQF)inclass9and10inschoolsalloverthecountry,includingthenortheastinabidtoincreasecompetencyamongstudents.TheNVEQFwillincludecoursesininformationtechnology,retailmanagement,automobile,securityandfrontdeskmanagement.Themainaimofthesevocationalcoursesistoimpartknowledgeandtrainingthatwillstrengthenthecoreskillsofstudents.

CBSEregionalofficerKKChoudhurysaid,"Thenewlyframedcurriculumcanbetakenupbystudentsasadditionalsubjects,buttheyshouldregarditascompulsorysubjectsasexamswillbeheldonthesesubjectsandthemarkswillbegivenintheirfinalmarksheet."

"Weareplanningtoimplementthesecoursesfromthissession itself. We have sent letters to all the schools in thenortheastregardingtheimplementationofthesevocational courses. We have received a response from 13schoolsinthenortheast,"Choudhuryadded.Vocationalcoursesforclasses11and12havealreadybeenintroduced,hesaid,addingthatthereare34vocational courses in classes 11 and 12, but this is the first time that vocational courses will be introduced in classes9and10."Wewillbestressingonthesetwoclasses more," he said.

"The curriculum for these vocational courses is prepared keepinginmindthepresentjobmarket.Thereisalwaysasaturationpointinthegovernmentsector.Around94percentjobsavailabletodayareintheprivatesector.Sostudentscanstarttakingupvocationalcoursesinclasses9and10itself.Earlier,studentscouldstudythesecoursesonlyafterpassingclass12,butnowtheycantakeupthesecoursesinschoolitself,"theregionalofficer said.

UGC hints at a separate board for undergraduate educationThe Times of India; December 15, 2012

Impact Assessment: The introduction of separate undergraduateboardalongwiththeoverhauloftheexistingaffiliationprocessofcollegescanpotentiallyimprovethequalityofundergraduateeducationinIndia.Thecollegeswillbeforcedtoimprovethequalityandinfrastructureasregulatedbytherespective board. This will help the universities to focusmoreonpost-graduateresearchandeducationwhichislackingintheIndianeducationsystem.

IfanideamootedbytheUniversityGrantsCommission(UGC)isbroughtintoaction,allthestatesmighthaveaseparateundergraduateboardonthelinesofschoolboardssuchasICSE,CBSEandstateboards.The implementation of such a plan will result in universitiesgettingmoretimeforpostgraduateresearchand education.

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Inaquestionnairesentouttocollegesanduniversities,theUGChasaskedthem,amongotherthings,whetherit would be "appropriate to have a state board of undergraduateeducationonthelinesofCBSE/schoolboardsoranundergraduateboardineachuniversity"sothatvarsitiescanfocusonpostgraduateeducationandresearch.

UGC'sjointdirectorforthewesternregionGSrinivassaid,"Wehavesoughtopinionofcollegesonseveralissues and this is one of them. The idea is aimed at strengtheningcollegiateeducation,"hesaid.TheUGCisalsotryingtooverhaultheprocessofcollegeaffiliationandensurethatmorecollegesbenefitfromitsfunding.Inabidtotakefeedbackfromallthestakeholders,theUGChasbeenholdingseminarsforcollegesanduniversitiesonthecurrentaffiliationsystem.OnesuchseminarwillbeheldinPuneonDecember14-15.

Initsquestionnaire,theUGChasaskedcollegesanduniversities to list reforms that can be introduced toimprovetheeducationsystem."Cancollegesbeaffiliatedtoanyuniversityinthecountryandnotbeboundbygeographicaljurisdiction?Cantherelationshipbetweenacollegeandauniversitybedefinedasthatofamaster-slave,amother-childoranyother,"thecommissionhasaskedinitsquestionnaire.

"Collegesarebeingneglectedbyuniversities.Outofthe33,000-oddcollegesinthecountry,only7,000arerecognizedbytheUGCandreceivefundsfordevelopment.Mostcollegesdonothavepermanentaffiliation,whichiswhytheyarelosingout.TheexerciseistogetmanymorecollegesundertheUGC'spurview,"Srinivassaid."Temporaryaffiliationfeehasbecomeasource of revenue for universities," he added.

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Sectorial Nuggets

‘FDI must to boost higher edu’ Times of India; Nov 02, 2012Deloitte Touché Tohmatsu India Private Limited has recentlyreleasedathoughtpaperontheeducationsector–titled‘IndianHigherEducationsector:Opportunitiesaplenty,growthunlimited’.Thereportstatesthatsuccessinleveragingknowledgeand innovation that could contribute to hi-tech manufacturingandhighvalue-addedservicesisonlypossiblewithasoundinfrastructureinhighereducation.Thereporthighlightstheroleofprivatesectorinhighereducationhassignificantlyincreasedinthelastdecade.However,duetovariousimpedimentstheamountofFDIattractedbythissectorsince2000isdismallylowatjust$400million.

Cell formed to spur government colleges for NAAC accreditationTimes of India, Nov 16, 2012ThehighereducationdepartmenthasrecentlyformedaState-LevelQualityAssuranceCell(SLQAC)withtheobjectiveofencouraginggovernmentcollegestogoforaccreditationfromtheNationalAssessmentand Accreditation Council (NAAC). NAAC is set up to monitor the performance of educational institutions onthebasisofafewparameters.However,severalinstitutionsdonottaketheaccreditationfromtheNAAC in the absence of proper awareness. The SLQAC willholdworkshopsandseminarstoteacheducationalinstitutionsaboutthebenefitsofhavingaccreditationfromtheNAAC.TherecognitionfromNAACwouldhelpgovernmentinstitutionsattractstudentsinlargenumbers.

'Skewed ratio of student intake a concern'Times of India, Nov 07 2012Foreveryfivestudentswhojoinengineeringcourses,thereisonlyonestudentwhotakesuppolytechniceducation.Theidealratioofstudentintake,however,isthreestudentsinpolytechnicforonestudentjoiningengineeringeducation.Oversupplyfromengineeringinstitutionsandundersupplyfrompolytechnicinstitutionshasledtostudentswhograduateasengineersfindingemploymentastechnicians.TheratioisalsoanoutcomeofthegrowthoftheIndianeconomyinthelastfewdecadeswiththeservicessectoroutperformingthemanufacturingsector.

Two Indians among Forbes' top 15 education innovators listTimes of India, Nov 10, 2012Indian-originCEOofDatawind,themakerofIndia'slow-costtabletAakash,SuneetSinghTuliandMassachusettsInstituteofTechnologyandProfessorAnantAgarwalhavebeennamedbyForbesmagazineamongthe15"classroomrevolutionaries"whoareusinginnovativetechnologiestoreinventeducationforstudentsandteachersglobally.TheForbeslistnames15educationinnovatorswhoare"harnessingaslewofdisruptivetechnologiestochangeeverythingfromthewayweteachgradeschoolmathtohowwetrainthenextgenerationofteachers."

Mandatory accreditation for polytechnic institutes mootedTimes of India, Nov 7, 2012IftheHRDministryhasitsway,polytechnicinstitutionsinthecountrywillsoonberequiredtoundergomandatoryaccreditationandassessmentbyanindustry-sponsoredagencyrecognisedbytheAllIndiaCouncilfor Technical Education (AICTE). As of now, the National BoardofAccreditationassessesthecoursesofferedbypolytechnics,buttheprocessisnotmandatory.Theratingfromsuchassessmentisgiventoindividualcourses and not to the institutions.

Not US or UK, future of Indian education lies in digital worldHindustan Times, November 17, 2012Indiacannotbuildenoughbrickandmortaruniversitiestomeettheexplodingdemandforhighereducationfrommillionsofitsyouth,andmustrelyondigitaltechnologyinsteadKapilSibalsaidinarecentinterview.Indiahas540millioncitizensunder25-ademographicdividendthatinternationalagenciesliketheInternationalMonetaryFundhavesaidcouldhelpthecountrygainanadditional2%GDPgrowth.Butthecountryhaslessthan50%ofwhatitneedstoachieveitstargetofa30%grossenrolmentrateinhighereducationby2020.Thisgapbetweendemandandsupplyhasincreasinglybecomeevident.Indiahasencouragedtheprivatesectortoinvestinthesector,expandedgovernmentinstitutionsofexcellence,supportedstatesinsettingupmorecollegesandtriedtoenactalegislationthatwouldallowforeignuniversitiesto set up campuses in India.

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HDFC to roll out schools from 2014Hindustan Times, November 17, 2012HDFCEducationandDevelopmentServices,awhollyownedsubsidiaryofHousingDevelopmentFinanceCorporationLtd(HDFC),willlaunchitsschoolsfromacademicyear2014.Thecompany,whichwasformedlastNovember,maybeginoperationswithitsfirstschoolinthenationalcapitalregion(NCR).

HDFC’seducationarmiscurrentlyexploringboththeoptions—owningandmanagingschools.Lastyear,theHDFCboardhadclearedtheforayintoHDFCEducationalandDevelopmentServiceswithaninvestment of Rs 100 crore.

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