overview of industry.docx

7/27/2019 OVERVIEW OF INDUSTRY.docx

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OVERVIEW OF INDUSTRY

Overview of chemical industry

Chemical industry is an integral component of the

Indian economy, which contributes around 7 % of the

Indian GDP. It touches our lives in several different

ways. Whether it is thermoplastic furniture we use, or

a synthetic garment we wear, or a drug we take we

are inextricably associated to it. The industry is

integral to the development of agricultural and

industrial development in India and has key linkages with various other downstream, such asautomotive, consumer durables, engineering, food processing and more.

Globalization posses many challenges to the industry, which has predominantly developed in a

protected environment. With World Trade Organization assuming an increasing role in global

economics, there is an inevitable move towards an inter-linked international economy. However,

there have been cases where particular segments of the industry, such as pharmaceuticals and

biotechnology have performed exceedingly well even at the world level.

During 2005-06, the industry contributed 17.6% of the manufacturing sector. However the

country continues to be a net importer in 2005-06, with exports of US$ 5.95 billion and imports

of US$7.92 billion. The worth of Indian chemicals industry during 2005-06 was US$30.59

billion, which reflected a growth of 10.23% over the previous year and a CAGR of 8.68%

during the last 3 years.


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History of chemical industry

The chemical industry is one of the earliest domestic industries in

India, contributing considerably to both the industrial as well as

economic growth of the country since it

achieved independence in 1947. The industry presently produces around 70,000 commercial

products, which range from toiletries and cosmetics, to plastics and pesticides.

The wide and diverse range of products can be broken down into several categories, which

include inorganic and organic (commodity) chemicals, plastics and petrochemicals, drugs and

pharmaceuticals, dyes and pigments, pesticides and agrochemicals, fine and specialty chemicals,

and fertilizers.

With primary focus on modernization, the Govt. of India has taken an active role in promotingthe growth and development of Indian domestic chemical industry. The Department of

Chemicals & Petro-Chemicals that has been part of the Ministry of Chemicals and Fertilizers

since 1991, is responsible for making policy making, planning, development, and regulation of

the industry. In the private sector, several organizations, including the Indian Chemical

Manufacturers Association, the Chemicals and Petrochemicals Manufacturers Association, and

the Pesticides Manufacturers and Formulators Association of India, all work with the prime

objective of promoting the growth of industry and the export of Indian chemicals. For example,

the Indian Chemical Manufacturers Association, represents a large number of Indian companies,

which produce and export a variety of chemicals, which have legitimate commercial

applications, but also can be used as precursors and intermediates for production of chemical

weapons.


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Growing at an average rate of 12.5%, the Indian chemical industry offers a wide spectrum of

opportunities for the investors both from India and the world. The significant market potential,

coupled with the existing pool of human resources, and the comprehensive variety of resources

in the country make it s profitable destination in the new millennium. In the world production of

chemicals, Indian industry stands at 12th position. Major segments of Indian chemical industry

include -

Pharmaceuticals & bulk drugs

In terms of volume and value, Indian pharmaceutical industry ranks 4th and 13th respectively. In

2004, industry was valued at over $6 billion, which is growing at an annual rate of 8 9 %. The

industry can be divided into bulk drugs segment and formulations, and manufactures about

60,000 finished medicines and around 400 bulk drugs that are used in formulations.

Agrochemicals

One of the most dynamic pesticide producers in the world, India is the second largest

manufacturer of agrochemicals in Asia. Out of 145 pesticides registered in the country, 85 of a

technical grade are locally manufactured. The country has established itself as a global sourcing

base for generic agrochemicals.

Petrochemicals and organic chemicals


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The petrochemical sector that primarily comprises polymers, synthetic fibers, fiber intermediates

and plastic processing is growing at at an annual rate of 14%. At the world level, India stands 9th

in terms of polymer consumption and is expected to be the 3rd largest consumer of polymers

after USA and China by 2010. To meet the growing domestic requirement, 9 global size ethylene

crackers of 700 kt each would need to be set up by 20112012, over and above the present

capacity of 2.4 million tons.

Dyes

The Indian dye industry is valued at around US$ 3 billion, with exports of about US$ 1 billion.

The per capita consumption is very low (50 gms) as compared to average global consumption

(400gms). The industry is highly fragmented with 50 players in organized sector and 900 in

unorganized sector. (400 gms). The industry has undergone tremendous over the years, starting

as an intermediate manufacturing industry to a full fledged industry with huge export potential.

At present, India's share of the dye output globally stands at 5%, with a manufacturing capacity

of 1,50,000 tons per annum.

Specialty chemicals

Specialty chemicals comprise fine chemicals and performance chemicals. The Indian fine

chemical industry is in a growth phase with an estimated worth of US$ 700 million. The industry

primarily caters to the pharmaceutical industry. The Indian specialty chemicals industry is valued

at an approximated worth of US$ 3 billion.

Inorganic Chemicals

Characterized by high degree of fragmentation even across high volume product areas, Indian

inorganic chemicals industry account for less than 4.5 % of global market. The sector comprises

of production of chemicals, such as sulphuric acid, phosphoric acid, titanium dioxide, carbon

black and chloralkali industry, which forms a major part of inorganic sector.


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CONTRIBUTION OF CHEMICAL INDUSTRY IN INDIAN ECONOMY

The chemical industry is one of the oldest domestic industries in India, contributing significantly

to both the industrial and economic growth of the country since it achieved independence in

1947. The chemical industry currently produces nearly 70,000 commercial products, ranging

from cosmetics and toiletries, to plastics and pesticides.

The wide and diverse spectrum of products can be broken down into a number of categories,

including inorganic and organic (commodity) chemicals, drugs and pharmaceuticals, plastics and

petrochemicals, dyes and pigments, fine and specialty chemicals, pesticides and agrochemicals,

and fertilizers.

The Indian pesticide industry has advanced significantly in recent years, producing more than

1,000 tons of pesticides annually. India is the 13th largest exporter of pesticides and disinfectants

in the world, and in terms of volume, is the 12th largest producer of chemicals. The Indian

agrochemical, petrochemical, and pharmaceutical industries are some of the fastest growing

sectors in the economy. With an estimated worth of $28 billion, it accounts for 12.5 percent of

the country's total industrial production and 16.2 percent of the total exports from the Indian

manufacturing sector.

With a special focus on modernization, the Indian government takes an active role in promoting

and advancing the domestic chemical industry. The Department of Chemicals and

Petrochemicals, which has been part of the Ministry of Chemicals and Fertilizers since 1991, is

responsible for policy, planning, development, and regulation of the industry. In the private

sector, numerous organizations, including the Indian `, the Chemicals and Petrochemicals

Manufacturers Association, and the Pesticides Manufacturers and Formulators Association ofIndia, all work to promote the growth of the industry and the export of Indian chemicals. The

Indian Chemical Manufacturers Association, for example, represents a large number of Indian

companies that produce and export a number of chemicals that have legitimate commercial

applications, but also could be used as precursors and intermediates for chemical weapons

production.


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Future Forecasts of chemical industry

A decade of economic reforms has resulted in major changes in the way the Indian chemical

manufacturers work and operate. Individual enterprises have realized their strengths and

weaknesses and are gearing up to face the new challenges. Success stories in dyes and

agrochemicals have boosted the confidence of Indian manufacturers to take on global

competition squarely. Some of the advantages of Indian chemical industry include -

Due to its low cost infrastructure, the country has huge export potential. According to a recent

report, India's chemical exports have the potential to rise US$ 300 billion by 2015. This defines

an investment of US$ 50 billion in chemical industry alone.

The country has the capacity for high value addition being close to Middle East. This is a cheap

and ample source for petrochemical feedstock.

In some categories of chemicals, India does have the advantage for exports (dyes,

pharmaceuticals and agrochemicals) by establishing strategic alliances with countries like

Russia. With the expertise and know-how available in the country, there is a tremendous export

potential in dyestuff and agrochemical market.

Availability and abundance of raw materials for titanium dioxide and agro-based products, such

as castor oil provide an opportunity to yield significant value addition. This, however, would

require substituting their exports in raw form by producing high value derivatives.

The major challenges are pursuit for feedstock and knowledge management. The naphtha-based

crackers that have been providing feedstock to the industry traditionally, have now been replaced

by new gas-based crackers. Along with China, India pose a stiff competition to the Middle Eastdue to the vibrant exports and huge unexplored reserves of oil and gas. The Govt. of India is

acting as a facilitator by establishing LNG terminals and acquiring equity interests in overseas

proven oil reserves. This will fuel the fast growth in chemical industry. The govt. is also engaged

in the development and formulation of a National Policy on Pharmaceuticals and mega-industrial

chemical estates.


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Pharmaceutical industry:-

The pharmaceutical industry develops, produces, and markets drugs licensed for use as

medications. Pharmaceutical companies are allowed to deal in generic and/orbrand medications

and medical devices. They are subject to a variety of laws and regulations regarding the

patenting, testing and ensuring safety and efficacy and marketing of

drugs.

HISTORY OF PHARMACEUTICAL INDUSTRY:

The earliest drugstores date to the Middle Ages. The first known drugstore was opened by

Arabian pharmacists in Baghdad in 754, and many more soon began operating throughout the

medieval Islamic world and eventually medieval Europe. By the 19th century, many of the

drugstores in Europe and North America had eventually developed into larger pharmaceutical

companies.
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Most of today's major pharmaceutical companies were founded in the late 19th and early 20th

centuries. Key discoveries of the 1920s and 1930s, such as insulin and penicillin, became mass-

manufactured and distributed. Switzerland, Germany and Italy had particularly strong industries,

with the UK, US, Belgium and the Netherlands following suit.

Legislation was enacted to test and approve drugs and to require appropriate labeling.

Prescription and non-prescription drugs became legally distinguished from one another as the

pharmaceutical industry matured. The industry got underway in earnest from the 1950s, due to

the development of systematic scientific approaches, understanding of human biology (including

DNA) and sophisticated manufacturing techniques.

Attempts were made to increase regulation and to limit financial links between companies and

prescribing physicians, including by the relatively new U.S. Food and Drug Administration

(FDA). Such calls increased in the 1960s after the thalidomide tragedy came to light, in which

the use of a new anti-emetic in pregnant women caused severe birth defects. In 1964, the World

Medical Association issued its Declaration of Helsinki, which set standards for clinical research

and demanded that subjects give their informed consent before enrolling in an experiment.

Pharmaceutical companies became required to prove efficacy in clinical trials before marketing

drugs.

Cancer drugs were a feature of the 1970s. From 1978, India took over as the primary center of

pharmaceutical production without patent protection.

The industry remained relatively small scale until the 1970s when it began to expand at a greater

rate. Legislation allowing for strong patents, to cover both the process of manufacture and the

specific products, came in to force in most countries. By the mid-1980s, small biotechnology

firms were struggling for survival, which led to the formation of mutually beneficial partnerships

with large pharmaceutical companies and a host of corporate buyouts of the smaller firms.

Pharmaceutical manufacturing became concentrated, with a few large companies holding a

dominant position throughout the world and with a few companies producing medicines within

each country.
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The Indian pharmaceutical industry

The Indian pharmaceutical industry is a success story. 500 000 people are employed in this

sector, in some 12 000 firms. 2 900 of them are large scale units, following a recent article by

Pradeep Agrawal and P. Saibaba in the renowned Economic and Political Weekly of Mumbai

(29 September 2001). In the pre- and post-production sector, a further 2.5 million jobs are

thought to be involved. Compared to the general price index, drug prices have risen much less in

the last 15 years and remain far below average. "Worldwide, India is a country of very low drug

prices while producing high quality medicines", Nihchal H. Israni, president of the Indian Drug

Manufacturers Association (IDMA), states proudly. Self-sufficiency with regard to

pharmaceutics exceeds 90 percent in spite of the policy of a more open economy pursued by

India since 1991.

TODAY, ThePharmaceutical industry in Indiais the world's third-largest in terms of volume

and stands 14th in terms of value. According to Department of Pharmaceuticals, Ministry of

Chemicals and Fertilizers, the total turnover of India's pharmaceuticals industry between 2008

and September 2009 was US$21.04 billion. While the domestic market was worth US$12.26

billion. Sale of all types of medicines in the country is expected to reach around US$19.22

billion by 2012. Exports of pharmaceuticals products from India increased from US$6.23 billion

in 2006-07 to US$8.7 billion in 2008-09 a combined annual growth rate of 21.25%.[2]

According to PricewaterhouseCoopers (PWC) in 2010, India joined among the

league of top 10 global pharmaceuticals markets in terms of sales by 2020 with value reaching

US$50 billion. Some of the major pharmaceutical firms including Sun Pharmaceutical,Cadila

Healthcare and Piramal Healthcare.

The government started to encourage the growth of drug manufacturing by Indian companies in

the early 1960s, and with the Patents Act in 1970. However, economic liberalization in 90s by

the former Prime MinisterP.V. Narasimha Rao and the then Finance Minister, Dr. Manmohan

Singh enabled the industry to become what it is today. This patent act removed composition
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patents from food and drugs, and though it kept process patents, these were shortened to a period

of five to seven years.

The lack of patent protection made the Indian market undesirable to the multinational companies

that had dominated the market, and while they streamed out. Indian companies carved a niche in

both the Indian and world markets with their expertise in reverse-engineering new processes for

manufacturing drugs at low costs. Although some of the larger companies have taken baby steps

towards drug innovation, the industry as a whole has been following this business model until the

present.

India'sbiopharmaceutical industry clocked a 17 percent growth with revenues of Rs.137 billion

($3 billion) in the 2009-10 financial year over the previous fiscal. Bio-pharma was the biggest

contributor generating 60 percent of the industry's growth at Rs.8,829 crore, followed by bio-

services at Rs.2,639 crore and bio-agri at Rs.1,936 crore.

TURNOVER OF PHARMACEUTICAL INDUSTRY

Among all the major industries in India, textiles and pharmaceuticals are surely the

leaders. The Indian government has listed the pharmaceutical industry as an intellectual

industry and investment in research and development has been enhanced.

The pharmaceutical products account for 8 percent of the global pharmaceutical sales and India

is the fifth largest producer of bulk medicines in the world. In 2001, the value of India's exports

of medicines approached US$1.7 billion.

Indian Pharmaceutical Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9

percent annually. It ranks very high in the third world, in terms of technology, quality and range

of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex

cardiac compounds, almost every type of medicine is now made indigenously.
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The Industry possesses quality producers and many units approved by regulatory authorities in

USA and UK. International companies associated with this sector have stimulated, assisted and

spearheaded this dynamic development in the past 53 years and helped to put India on the

pharmaceutical map of the world.

There are 20,000 laboratories in India's pharmaceutical industry and the scale of the

pharmaceutical market amounts to Euro 5.3 billion. The leading 250 pharmaceutical companies

control 70% of the market with market leader holding nearly 7% of the market share. It is an

extremely fragmented market with severe price competition and government price control.

Indias pharmaceutical industry is one of the fastest growing sectors in the Indian economy

with the growth rate (CAGR) of 11.9 per cent during 2004-2008. The industry has emerged as

one of the strongest and most successful examples of knowledge-based industries in the world

and it has made tremendous progress in terms of development of technology, products and

infrastructure. Its large pool of skilled technical workforce, low production costs and government

support has enabled its transformation from an import-dependent country to a major exporting

country.

The domestic turnover of the industry stood at Rs 525.6 billion in 2008, accounting for 1.6

percent of GDP. Out of this turnover, domestic branded formulations sales were worth Rs 327.7billion (as per ORG IMS June 08 retail sales data). The remaining portion is estimated to have

come from unorganised players & their contribution is estimated at 25 per cent of the domestic

industrys turnover. The Indian pharmaceutical industry ranks fourth in the world in terms of

volume (8 per cent global share) and fourteenth in terms of value (1.9 per cent global share).

Pharmaceutical Industry in India-Growth

As per the present growth rate, the Indian Pharma Industry is expected to be a US$ 20 billion

industry by the year 2015. The Indian Pharmaceutical sector is also expected to be among the top

ten Pharma based markets in the world in the next ten years . The national Pharma market would

experience the rise in the sales of the patent drugs .The sales of the Indian Pharma Industry


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would worth US$ 43 billion within the next decade. With the increase in the medical

infrastructure, the health services would be transformed and it would help the growth of the

Pharma industry further. With the large concentration of multi national pharmaceutical

companies in India, it becomes easier to attract foreign direct investments. The Pharma industry

in India is one of the major foreign direct investments encouraging sectors

CONTRIBUTION TO ECONIOMY

Pharmaceutical Industry in India is one of the largest and most advanced among the developing

countries. It provides employment to millions and ensures that essential drugs at affordable

prices are available to the vast population of India. Indian Pharmaceutical Industry has attainedwide ranging capabilities in the complex field of drug manufacture and technology. From simple

pain killers to sophisticated antibiotics and complex cardiac compounds, almost every type of

drug is now made indigenously.

Indian Pharma Industry is playing a key role in promoting and sustaining development in the

vital field of medicines. Around 70% of the country's demand for bulk drugs, drug intermediates,

pharmaceutical formulations, chemicals, tablets, capsules, orals and vaccines is met by Indian

pharmaceutical industry. A number of Indian pharmaceutical companies adhere to highest

quality standards and are approved by regulatory authorities in USA and UK.

Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units and is

very top heavy. The leading 250 pharmaceutical companies control 70% of the market with

market leader holding nearly 7% of the market share. There are also 5 Central Public Sector

Units that manufacture drugs. These units produce complete range of pharmaceuticals, which

include medicines ready for consumption by patients and about 350 bulk drugs, i.e.,

chemicals having therapeutic value and used for production of pharmaceutical formulations.

India is largely self-sufficient in case of formulations. More than 85% of the formulations


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produced in the country are sold in the domestic market. Some life saving, new generation

under-patent formulations are imported, by MNCs, which they market in India. Over 60% of

India's bulk drug production is exported. The balance is sold locally to other formulators.

India is the worlds fourth largest producer of pharmaceuticals by volume, accounting for around

8% of global production. In value terms, production accounts for around 1.5% of the world total.

The Indian pharmaceutical industry directly employs around 500,000 people and is highly

fragmented. While there are around 270 large R&D based pharmaceutical companies in India,

including multinationals, government-owned and private companies, there are also around 5,600

smaller licensed generics manufacturers, although in reality only around 3,000 companies are

involved in pharmaceutical production. Most small firms do not have their own production

facilities, but operate using the spare capacity of other drug manufacturers.

Focus on...cur rent and futur e markets

The dynamics of the domestic Indian market have always encouraged Indian industry to pursue

overseas lines of business. Expansion comes at a cost and some companies have had to

restructure. In June 2009, Wockhardt divested its German business, esparma and more recently,

in March 2010, Orchid sold its generic injectable formulations business to Hospira but came out

of the deal with a long term supply agreement for its APIs.

India remains an important market for the vast majority of Indian companies. The indigenous

industry supplies around 70% of the countrys pharmaceuticals. The proportion of revenue

derived from India depends largely on the strategy of the individual company and its penetration

into overseas markets. For example, while Zydus Cadila aims to grow rapidly overseas, India

remains its most important market, accounting for 55.8% of revenue in fiscal 2008/09. India is

also Ciplas key market, generating almost half of the companys revenue in 2008/09, although

this percentage has been declining in recent years as the company has increasingly targeted

overseas markets. Other companies, such as Dr. Reddys, are less reliant


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on the Indian market; in 2008/09, India contributed just 17% of the companys global revenue.

The recent regulatory and much awaited patent law changes have lead the Indian

Pharmaceutical Industry towards exploring newer avenues of drug development, thus, promising

higher capital investment in the pharmaceutical industry in the near future. The Indian

Pharmaceutical Research is backed by strong Government support and availability of surplus

skilled technical workers at lower costs.

At a growth rate of 9 per cent per year, the pharmaceutical industry in India is well set for rapid

expansion. As a result of the expansion, the Indian pharmaceutical and healthcare market is

undergoing a spurt of growth in its coverage, services, and spending in the public and private

sectors. The healthcare market has opened a window of opportunities in the medical device field

and has boosted clinical trials in India.

Many multinational companies have penetrated into India with an aim to market drugs and

conduct clinical trails. Thus, Indian pharmaceutical research, manufacturing, and outsourcing

have received an impetus, thereby, creating an image of a potential healthcare market and a land

of opportunities in pharmaceuticals. The economic liberalization policies coming to force in the

1990s and the strong emergence of private sector in the Indian economy has heightened the pace

of development of the pharmaceutical industry and will continue to do so.


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Overview of education industry

In troduct ion

In India, education is the key to the task of nation-building. It is also a well-accepted fact that providing theright knowledge and skills to the youth can ensure the overall national progress and economic growth.

The Indian education system recognizes the role of education in instilling the values of secularism,egalitarianism, respect for democratic traditions and civil liberties and quest for justice.

There is a huge demand for upgradation of education as India is expected to have a surplus of 47 millionpeople in the working age group by 2020. As a result, both the formal education sector (including K-12and higher education) as well as informal sector (including coaching institutions, pre-schools andvocational institutions) are witnessing rapid growth.

Market Size

The market size of Indian education sector is expected to increase to Rs 602,410 crore (US$ 95.80billion) by FY15 on back of strong demand for quality education, according to a report by India Ratings.

Indian education sectors market size in FY12 was estimated to be Rs 341,180 crore (US$ 54.20 billion).The sector grew at a compounded annual growth rate (CAGR) of 16.5 per cent during FY05-FY12.

India's online education market size is set to grow to US$ 40 billion by 2017 from the present US$ 20billion, said Mr Anil Sonkar, Chief Technology Officer (CTO), LoudCloud Systems.

The private education sector is estimated to reach US$ 70 billion by 2013 and US$ 115 billion by 2018,according to a consulting firm Technopak. Realising the fast growth of education sector in India, manyprivate companies are looking for relevant acquisitions and alliances in this space. Major investments arebeing seen in the areas of pre-schools, private coaching and tutoring, teacher training, the developmentand provision of multimedia content, educational software development, skill enhancement, IT trainingand e-learning.

Investments

The education sector in India is also considered as one of the major areas for investments as the entireeducation system is going through a process of overhaul, according to a report Emerging Opportunitiesfor Private and Foreign Participants in Higher Education by PricewaterhouseCoopers (PwC).

The education sector has attracted foreign direct investments (FDI) worth Rs 4,483.06 crore during April2000 to July 2013, according to the data released by the Department of Industrial Policy and Promotion(DIPP).

Some of the major investments in education and training sector in India are as follows:

The UK-based University of Northampton has tied up with Madras University to offer a Master'sdegree in International Environment Management. The course will allow students access toonline courseware put up by the University of Northampton

Ecole hoteliere de Lausanne has opened a 67,000 square feet campus in India to tap into thegrowing demand for skilled hospitality professionals in the country. Located in the newlydeveloped Lavasa township near Pune, Ecole Hoteliere Lavasa will offer a four-year programme

Narsee Monjee Institute of Management Studies (NMIMS) has set up a centre for manufacturingexcellence in collaboration with UK's Warwick University. The centre will offer specially designedMaster's and Doctoral programmes


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CFA Institute, the global association of investment professionals, plans to set up office in India forits CFA and Claritas programmes

India's first ever aviation university would come up at Rae Bareli in Uttar Pradesh (UP). The RajivGandhi National Aviation University will commence training of aspiring pilots, aircraft engineersand cabin crew in September 2014

Tech Mahindra has established an engineering college in association with the French university,

Ecole Centrale and Jawaharlal Nehru Technological University (JNTU) EuroKids, education service provider in the pre-school segment, launched 'EuroVarsity', a virtual

university aimed at providing programs to develop teaching skill sets. The first course to beoffered is a certified teacher training course, 'diploma in early childhood care and education'

Governm ent Ini t iatives

The Central Government plays a vital role in the evolution and monitoring of educational policies andprogrammes.

Some of the initiatives taken by the government for the infrastructural development of education sectorinclude:

The Government of India has opened the doors for top foreign universities to set up campuses inthe country and award degrees, giving Indian students the opportunity to study in globalinstitutions

The Indian School for Entrepreneurs and Enterprise Development (iSEED), was inaugurated byMr K H Muniyappa, Union Minister for Micro, Small & Medium Enterprises (MSME), Governmentof India

India's first school under public-private partnership (PPP) is expected to come up in the nextfinancial year with the central government finalising the model concession agreement. A total of2,500 such schools will be set up over the next few years at the cost of Rs 30,000 crore

Five New Indian Institute of Information Technology (IIITs) in the PPP mode have started fromthis academic session. They are Chittoor in Andhra Pradesh, Kota in Rajasthan, Tiruchirapalli inTamil Nadu, Guwahati in Assam and Vadodara in Gujarat

Under the Union Budget 2013-14, the Government of India allocated:o Rs 27,258 crore (US$ 4.33 billion) to Sarva Shiksha Abhiyaan (SSA)o Rs 65,867 crore (US$ 10.47 billion) to the Ministry of Human Resource Development

(MHRD), an increase of 17 per cent over the revised estimates (RE) of the current yearo Rs 5,284 crore (US$ 840.04 million) to Ministries/Departments for scholarships to

students belonging to scheduled castes (SC), scheduled tribes (ST), other backwardclasses (OBC), minorities and girl children

o Rs 160 crore (US$ 25.44 million) to the corpus of Maulana Azad Education Foundation toraise its corpus to Rs 1,500 crore (US$ 238.51 million) during 12th Plan period

o Rs 4,727 crore (US$ 751.12 million) for medical education, training and research

Road Ahead

The Government of India has set itself an aggressive target of achieving 30 per cent gross enrolmentratio (GER) in higher education by 2020, which translates into doubling the GER in the next eight years.

The private sectors role in the higher education sector has been growing at a rapid pace over the lastdecade and needs to further expand at an accelerated rate in order to achieve the GER target.

PPP can revolutionise education in India and facilitate growth. They can raise the standards of educationprovision in India and help meet the demand for quality education from a growing middle class withincreasing incomes.


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Digitisation and adoption of information and communication technology (ICT) is modernising thetraditional way of classroom learning. The Government of India plans to invest US$ 20 billion on ICT andvocational training in the 12th Five Year Plan.

The number of people entering the Indian higher education sector is growing at a significant rate.According to MHRD data, enrolments have increased from 15.5 million (GER of 12.4 per cent) in 2006-07

to 17.3 million (GER of 15 per cent) in 2009-10. These figures also reflect an increasing number of youngworking-age people who continue in the education system instead of dropping out. The number of peoplein the age bracket of 15-24 years enrolled in educational institutes grew from approximately 30 million in2004-05 to over 60 million in 2009-10. These trends present a huge opportunity for private and foreignsector players looking to provide quality education and services in this sector.

Exchange rate used INR 1= US$ 0.015 as on September 24, 2013

References:Ministry of Finance, Press Information Bureau (PIB), Media Report, Ministry of Education, Departmentof Industrial Policy & Promotion (DIPP)

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