ET Awards' Agenda For Renewal 2011: Allow education to function as a for profit business

Schools generate $20 billion every year, and the figure is growing at 14% a year, according to Kaizen private equity’s education report. But education in India is not allowed to function as a for-profit business. The government mandates a ‘trust’ structure for all schools from kindergarten till class 12. So, only non-profit trusts can operate schools; and if a trust has a surplus, it has to reinvest it in the school it runs.

That’s the rule on paper. In reality, companies and investors work around this by setting up `consulting companies’ to provide services to schools in return for a fee. This arrangement makes a mockery of the trust structure. Education should be allowed to run as a business. The foreign universities bill also needs to be passed.

Follow the campaign around the Agenda For Renewal at http://www.afr.economictimes.com