Restrictive Policy – a hindrance to private investment in education in India

School education is the most attractive segment, while restrictive government policy is the biggest impediment to investing into the education sector in India, according to a survey by London-based consultant Parthenon Group.

In the sample survey involving 34 investors and 47 educational institutions, 53% of the investors and would-be investors identified unfriendly regulations as the biggest challenge facing the sector.

School education is the most attractive segment, while restrictive government policy is the biggest impediment to investing into the education sector in India, according to a survey by London-based consultant Parthenon Group.

In the sample survey involving 34 investors and 47 educational institutions, 53% of the investors and would-be investors identified unfriendly regulations as the biggest challenge facing the sector.

School education is the most attractive segment, while restrictive government policy is the biggest impediment to investing into the education sector in India, according to a survey by London-based consultant Parthenon Group.

In the sample survey involving 34 investors and 47 educational institutions, 53% of the investors and would-be investors identified unfriendly regulations as the biggest challenge facing the sector.

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At the same time, in my personal opinion, I think this issue needs to be dealt with very very carefully.

Since there is a severe demand supply gap as far as education sector is concerned in India, and the government cannot make the necessary investment to create capacity, it is important that private investment is encouraged in the sector.

However, one must be careful that solid regulations and control mechanisms are established to ensure that quality education is delivered by these private institutions. We are already seeing a plethora of institutions around the country who have set up schools and colleges which lack in requisite infrastructure and deliver poor quality of education. And since there is strong demand due to lack of capacity, they are thriving on hard earned money of parents, putting students’ future at risk and destroying their dreams of a rewarding career.

Also when foreign institutions establish their campuses in India, they may charge higher fees to support high costs. However, this can have an inflationary effect on fees in general as those who do not offer education of similar standards will follow suit. This will happen until the demand supply gap narrows down and allows parents to make an informed decision driving away such poor institutions out of business.

It is very important that quality education is provided, at the most reasonable cost that is affordable by most Indian students.

Hence, current government must invest more resources in framing the most suitable regulatory framework and infrastructure, which should then be followed by opening of doors to private investment in this sector.

Franklin Templeton Private Equity invests in Career Point

Career Point Coaching Institute has raised Rs 50 crore in equity capital from Franklin Templeton Private Equity Strategy, one of the leading India-focussed private equity funds.

Career Point (CP), which raised funds on July 26, intends to use the funds to set up state-of-the-art private universities in Rajasthan and Himachal Pradesh and ramp up its K-12 offering Global Public School. The company will also invest part of the capital to strengthen its existing coaching business where it has launched the Syncho School (VSAT- enabled) and Knowledge Lab offerings.

Career Point Coaching Institute has raised Rs 50 crore in equity capital from Franklin Templeton Private Equity Strategy, one of the leading India-focussed private equity funds.

Career Point (CP), which raised funds on July 26, intends to use the funds to set up state-of-the-art private universities in Rajasthan and Himachal Pradesh and ramp up its K-12 offering Global Public School. The company will also invest part of the capital to strengthen its existing coaching business where it has launched the Syncho School (VSAT- enabled) and Knowledge Lab offerings.

CEO Pramod Maheshwari had established the coaching institute for engineering aspirants in Kota in 1993. As the national preparation hub for engineering entrance aspirants, Career Point gained national footprint with over 40 centers across the country with an annual student intake of over 30,000 students.

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