India to concentrate on vocational training

By SiliconIndia   |   Tuesday, 29 June 2010, 09:59 Hrs   |    5 Comments
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Mumbai: India being the home to a large number of educated unemployed populations,initiatives are being taken to draw in more attention from the private equity. The corporate and vocational training would attract the private equity (PE) and venture capital in terms of higher education for a short period. While the education sector in India says that the school education will have a longer term reports Shraddha Nair of Mint.com

The K -12 schools with international baccalaureate (IB) will see more of the investment activity as most of the professionally managed school chains have extensive plans for their development.

Ritesh Chandra, Executive Director and Global Head (consumers), Avendus says, "We expect significant activity in the IB space with regards to K-12 as the regulatory restrictions governing such schools are lower and capital infusion and profit repatriation is possible,"

The main reason behind the unemployment issue is that the skills honed by the educational institutions do not match the expectation of the employers.

The vocational training sector with an estimated growth of 22 percent compounded annual growth rate (CAGR) is a $1.15 billion industry while the higher education which is inclusive of medicine, engineering and management studies builds a $6 billlion industry with an approximate CAGR of 16 percent.

As short investment attracts investors, the higher education department is more appropriate for building scale. Two factors that add to the appealing of this sector are the negative working capital cycle and its defensive nature.

The fiscal report of 2009, by the RBI and SBI shows that the estimated growth of educational loan amounts to Rs 27,500 Crore from 10,000 Crore in 2006.

Foreign Universities like the Australian and British Universities will have a firm hold in this educational scenario. Manipal Education City and the Edcomo Solutions and Pearson have already entered into joint ventures with foreign partners for vocational training.

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