education & business 15 India: land of opportunity?


India is rapidly moving towards a skills shortage which could halt its economic progress if remedial action is not taken soon. Saionton Basu of Penningtons Solicitors LLP looks at the pitfalls and potential for foreign players in India’s over-regulated education sector


India faces the challenge of leveraging its vast demographic strength by educating and training over 130 million people in the 18-24 age group with employable skills. Current funding models may not be able to accomplish this goal without the participation of the private sector and international financial and strategic partners. As the average household in India spends 5% of its income on education, it is possibly the most attractive counter-cyclical industry for foreign investment.


The education sector in India can be broadly classified into three segments: • K-12 extending from kindergarten to year 12 of schooling;


• Higher education institutions (HEIs) providing undergraduate and graduate-level university education;


• Non-formal institutions (NFIs) including pre-schools (18 months


to three years), coaching classes, and the educational materials market.


Although 100% of foreign direct investment through the automatic route has been permitted in the education sector since 2000, the present legal structure does not allow degrees to be granted by foreign educational institutions in India, thereby restricting independent operations by foreign players. That said, the Indian School of Business (ISB) in Hyderabad is a loose collaboration between Wharton, Kellogg and the London Business Schools. Although it is not recognised by the present regulations, it has a stellar market reputation.


ISB is a case in point of how the market mechanisms have moved far ahead of regulatory change. There is a growing recognition within government echelons that the demand-supply gap in the education


Highbury apprentices practice what they preach


Highbury College has launched its own in-house telemarketing academy to promote its courses and apprenticeships to businesses in the Portsmouth area. However this is a call centre with a difference as the people making the calls are themselves apprentices.


Fred Taylor, who is supervising the apprentices, said: “At Highbury we like to practice what we preach. What better people are there to promote apprenticeships and qualifications than those who are undertaking them?


“Our apprentices are learning a wide range of skills in a real working environment. By looking after customers and talking to businesses on a daily basis they will be preparing themselves for supervisory positions, at the same time as earning a wage.“


While discussing the merits of training the workforce and taking


on apprentices with employers, the eight telemarketing apprentices will themselves be working towards achieving Level 2 and Level 3 NVQs in contact centre operations.


Lucy Hatton, 22, has worked in a call centre before and started her apprenticeship with Highbury in February. “In the last company I worked for it was difficult to progress and become a team leader or supervisor. By doing this apprenticeship I’m gaining confidence and getting the qualifications I’ll need to enter a more senior position.“


Highbury is also offering the NVQ in Contact Centre Operations to external companies wanting to develop their call centre staff with a nationally-recognised qualification.


Details:


023-9238-3131 employers@highbury.ac.uk


THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – MAY 2012 www.businessmag.co.uk


sector has to be bridged through opening up greater participation from international players. The Indian government has set in motion comprehensive reforms. Several important bills – relating to accreditation, foreign universities, educational tribunals and unfair practices – have been introduced in parliament.


Nevertheless, the current legal and regulatory framework does provide opportunities for joint ventures between foreign education sector players and Indian institutions. In particular, the NFI segment is particularly ripe for foreign investment and for forging strategic alliances, as this operates outside the regulatory mechanisms for the K-12 and HEI segments, which have hindered participation in the past.


The education sector in India is closely guarded by the government and several judicial pronouncements


Saionton Basu


have added a very loosely defined ’not for profit’ tag to it. Accordingly, investments need to be carefully structured so that they cannot be construed as profiteering from students by the ever-zealous regulators. Early stage tax and regulatory advice is a must so that these pitfalls can be overcome.


Details: Saionton Basu, partner saionton.basu@penningtons.co.uk www.penningtons.co.uk


Where a University Degree in Business is


not beyond your reach


Our part-time Business and Management Degree is designed for busy working people and is available one evening a week from several colleges across Hampshire, the Isle of Wight and from the University of Portsmouth.


It is open to those who may not have formal qualifications but whose work experience will have prepared them to succeed.


For further information visit W: port.ac.uk/busandman E: bus.admissions@port.ac.uk T: 023 9284 8200


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