This is one of the positive impact of Global Economic crisis – RIYA BHAMBHANI, a practising homeopath, wants to get out of her clinic – and get into a classroom. Last month, she appeared for two admission tests that could get her into a business school.
Thousands of young Indians like Bhambhani want to enroll at B-schools and other professional training institutes, hoping it will help them grab better jobs when the economy changes gears.“This is the best time to study because no job will give good returns. By the time I finish my MBA in 2011, things would have got better,” says Bhambhani. She is ready to take a loan if she cracks one of the tests – three more await her – as she knows an MBA degree will raise her equity in the job market. But there is a deeper rationale that explains why the business of education is doing well despite the current economic turmoil. For a vast majority of Indians, education is the only means that can help them realise their socio-economic aspirations.
“Education is a part of the family budget and people will not stop sending their kids to schools even if the Sensex crashes to 3,000,” says Shantanu Prakash, managing director and CEO of Educomp, which offers e-Learning services and is expecting to grow 100 percent this year.According to a study by brokerage firm CLSA, education is the second biggest expense in the average middle class Indian’s budget – a quarter is spent on food, followed by 8.9 per cent on education. In fact, the size of the education business in India falls far short of the demand of the aspiring middle class.
The National Knowledge Commission estimates that the country needs 1,500 new universities and the private education market is expected to grow to Rs 34,000 crore in 2012 from Rs 20,000 crore now, the CLSA report said.
The Hyderabad-based Indian School of Business (ISB) recently opened a new campus in Mohali. Likewise, Mumbai¬based Welingkar Institute of Management and Research and NMIMS University have opened centres in Bangalore.
“In the western world, when the economy is in crisis, people get into academics. It is often noted that when business is down, business school applications go up,” remarks M Rammohan Rao, Dean of ISB. The first round of admissions into ISB this year has seen a 30 per cent increase in applications, says Rao. And this year’s Common Admission Test for IIMs saw a 26 percent rise in the number of applicants.
The demand-supply mismatch is not limited to higher education. With only 40 percent of the 361 million school going children attending public schools, companies like Educomp and Everonn in Chennai are flourishing, with online education tools and multimedia programmes like Smart Class. Extra¬marks. com, a new entrant in digital media, bagged several big orders even as the economic crisis deepened, says its chairman, Atul Kulshrestha.And in Delhi, Amitabh Srivastava, COO of Chopra Consultancy, which offers education-related consulting services, says his company is seeing strong growth. The “education sector is going to remain unaffected by the slowdown and may even benefit from it,” he says confidently.