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Indian Higher Education Sector: Public Private Partnership

PPP can provide much needed finance to the higher education sector while serving as an efficient operating
model. Possible PPP structure as suggested in the 2009 E & Y – EDGE 2009 report on Private Enterprise in
Indian Higher Education. The private sector is a key constituent of the higher education segment in India,
accounting for more than a third of all higher education institutions and more than two thirds of all professional
higher education institutions. Strong macro-economic and demographic drivers coupled with the gap in public
spending will only further increase the relevance of the private sector in higher education in the country. Thus
there is a clear imperative for established players to participate in this growth story by building higher
educational institutions of scale.

Establishing strong partnerships between private sector enterprises and the public sector, including the
government and regulators, is the clear need of the hour for this growth to be achieved. At the same time, private
higher education institutions need to embrace best in breed governance, operating and financing models to build
institutions of the highest quality and standards.
Though, not active players in the higher education space at present due to structural and regulatory challenges,
private equity investors could play a key role in the expansion of India’s higher education infrastructure. The
report has attempted to provide an overview of specific considerations that would drive investor interest in the
education space based on our interaction with teams at some of the leading private equity funds active in India.
Possible PPP Structure – The educational institute (special purpose vehicle – SPV) is set up as a Society or
Trust, as per applicable guidelines. The UGC and AICTE or some other government body approves norms and
standards of the institute. The state provides applicable administrative and financial support to the institute.
Capital outlays are met by an educational services entity which provides infrastructure. The educational services
entity charges a fee for use of facilities by the Society or Trust. The infrastructure facilities are transferred to the
institute after several years (Refer to exhibit 5).
Private enterprises have used innovative models and novel strategies to attain scale in the India higher
education segment. As per current enrollment trends, India will see a shortage of 5 mn graduate seats by 2015
and 7 mn by 2020. The constraints are capacity constraints (Refer to exhibit 6), limited seats in IITs and IIMs –
a larger number to abroad, high entrance cut-offs for top universities / colleges, 1,00,000 students graduate from
entirely unaccredited private institutions, quota reservations on the increase and large number of ‘fly-by-night;
operators.
The market for higher education is projected to grow almost three times in the next 10 years; market size for
Skill Development is projected to grow almost ten times, albeit over a smaller base. For this a network of public
and private polytechnics and vocational institutions exists, controlled and supervised by the councils
specializing in each discipline.

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Trends in Higher Education & Growth Drivers

In India higher education covers all the post-secondary education in different subjects such as humanities,
commerce, medical, engineering and technology. Most of the universities offer multi-disciplinary courses.
However, there are some which are confined to a particular discipline for e.g., technology and medical.

Universities differ in terms of their academic, administrative and financial arrangements. The country is
dominated by state universities, which are 251 in number while a majority share of colleges in India are private
unaided institutions. The number of universities has increased by around 13% in 2007-08, as compared to the
last year. Colleges in India witnessed a growth of over 14% in 2007-08 on a year on year basis. Private unaided
colleges form a significant part of the total number of colleges in India and are growing rapidly in number. Out
of 20,667 colleges, 2,166 colleges are explicitly for women. Besides these colleges, the country also has around
7,000 technical education institutions. By 2015, India is expected to witness a sizeable reduction in the lowest
income earning section of the society, which will be replaced by a much larger urban middle class, creating a
favourable market for the education sector (refer to exhibit 3). Education is the second largest expenditure for
the middle class (refer to exhibit 4). Economic growth is expected to drive household income among the middle
class. These factors – willingness to spend on education and the rise in purchasing power will allow the growing
middle class to bid for an education from public institutes.

Indian Higher Education Sector: Heading towards Transformation – Introduction

 

The Indian Education Industry has been growing strongly (USD 50bn) and break-up is 40% contributed equally
by K-12 & Higher Education and remaining 20% by Informal Education. The Indian Education System
comprises of formal and informal network of education institutes as mentioned in exhibit 1. The Indian
education system comprises of formal and informal network of educational institutions. With economic growth
and enhanced technology it has become necessary to develop the structure of the Indian education sector. Funds
are a major concern in the market though the government has taken many initiatives for the development of
education infrastructure which can be fulfilled by private players. The government has opened the doors for
foreign universities by passing Foreign Educational Institution (Regulation of Entry and Operation) Bill, 2010,
which will help in shaping the education industry structure specially pertaining of higher education in India. The
present GER (Gross Enrollment Ratio) in higher education in India is around 12 per cent (world average 23.2
per cent, developed nations 54.6 per cent, Asian countries 22 per cent) and the government of India wants to
increase this to 21 per cent by 2017. There is an interim GER target of 15 per cent by 2011-12, for which the
enrolments in universities/ colleges need to be substantially raised to 21 million students. The government
estimates that the share of enrolments of private, unaided higher education institutions will be around 51 per
cent. It is obvious that the government of India alone will not be able to achieve GER target and will require
public partnership, private investment, and participation of foreign institutions to achieve this ambitious
goal. The higher education in India has experienced significant growth over the last two decades. Universities
and Colleges in India have grown at a CAGR of over 5% and 6% respectively, since independence

Pre-school Education – Conclusions and Recommendations

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In sum, high-quality preschool education is designed to enhance children’s social and emotional development.
Such programs provide children with highly qualified teachers, small class sizes with high
teacher-student ratios, opportunities to pursue their interests and interact with their peer, and activities
intentionally designed and implemented to educate the whole child. Among the benefits found from
such programs; children are more likely to graduate from high school, continue with higher education,
and have lower rates of teen pregnancy, special education placement, disruptive behavior, and arrests.
They are more likely to give back to their neighborhoods as adults by participating in volunteer work
and contribute more to their communities through higher employment rates and earnings, higher voting
rates, increased church attendance, and home ownership.75 These benefits and associated economic
returns have only been found for programs that are high-quality. Benefits have been found for larger
scale programs including the Chicago Child Parent Centers, Head Start and Early Head Start. By contrast,
length of attendance in typical child care has been associated with modest negative outcomes.
As policymakers design programs and make decisions regarding early education, they should invest in
programs that support development of the whole child, including academic, social, and emotional skills.
Recommendations for policymakers are as follows:
1. Include enhanced social and emotional development as a key goal of preschool education programs.
This does not mean that enhanced cognitive development should be de-emphasized. Both aspects of
children’s development are important, and one need not be sacrificed to support the other.
2. Standards should spell out the outcomes that preschool education programs are expected to achieve
for social and emotional development.
Performance standards for preschool education programs should include explicit mention of social and
emotional development. The new draft of National Association for the Education of Young Children
accreditation standards include discussion of promotion of social and emotional skills and can provide
guidance for program administrators who are considering launching new preschool programs.76
Then, when policymakers require that progress be measured by indicators, those indicators should map
onto the performance standards and should therefore also include measures of social and emotional
development. Seventeen states have launched school readiness indicator projects, and their work can
provide examples of such indicators.77
3. Expand access to high-quality preschool education programs so that more children can benefit
from educational experiences that will improve their socio-emotional development.
Nationally, only a few states have committed to funding preschool for all 4-year-olds whose parents
wish them to attend.78 High-quality infant and toddler programs, even for the most disadvantaged
children remain rare. Substantial new investments should be made to increase access to high-quality
child care and preschool education programs designed specifically to enhance early learning and
development, broadly defined.
Promoting Children’s Social and Emotional Development Through Preschool [15]
4. Ensure that all preschool programs are high-quality because only educational programs will support
children’s social and emotional development. Such programs have strong leadership, well-prepared
teachers, a balanced curriculum, reasonable class sizes and ratios, and partnerships with parents.
5. Provide administrators and teachers with technical assistance and training to help them implement
effective curricula and teaching practices that support children’s social and emotional development.
Studies demonstrate that, beyond the traditional aspects of program quality, the content of the curriculum
and the teaching practices that teachers employ are critical determinants of a program’s ability to
benefit children’s social and emotional development. Policymakers should ensure that resources are
available to help teachers put into practice the best approaches for promoting children’s social and
emotional development.

Quality Preschool Programs: Definitions and Evidence for Benefits

Preschool programs that maintain high standards of quality provide children, especially those at risk,
with skills that will assist them in their social and academic adjustment to elementary school. Highquality
preschool is organized in ways that allow children to form close, sustained relationships with
teachers and encourage positive interactions with peers. Small group sizes and high adult-child ratios,
competitive staff compensation and benefits, professional development, and other aspects of the
program are geared toward fostering strong relationships and reducing teacher turnover. These components
have been associated with positive social and emotional outcomes for children, including
greater compliance, sociability, attention, self-regulation, and peer relations as well as lower rates
of negative affect and behavior problems.70
A program’s quality may also be determined by the qualifications required of the teachers and staff.
Teachers with four-year degrees and specialization in early childhood are better prepared to develop
meaningful relationships with their students and create safe, nurturing climates that support children’s
emotional well being. Children cared for by teachers who are highly involved and invested during
their preschool years have been found to be less likely to display behavior problems in kindergarten
and demonstrate increased social skills through elementary school.71 High teacher-student ratios allow
for the development of these relationships, which provide stability in transitions to new classrooms,
contribute to increased social skills, and improve emotional stability.72
The National Institute of Child Health and Human Development (NICHD) has conducted extensive
research that has contributed to a better understanding of the relationship between preschool quality
and child outcomes. The research has shown that higher quality preschool programs defined by high
teacher-student ratios, group sizes and higher teacher qualifications results in more responsive teaching
and fewer behavior problems from children.73 Children who attend higher quality preschool have also
been reported to have fewer behavior problems, closer relationships with their mothers, and to be
better prepared for school

The Benefits of a Balanced Curriculum

In an attempt to highlight the value of a balanced curriculum, the High/Scope Preschool Curriculum
Comparison Study63 compared the effectiveness of three preschool curriculum models when used with
children at risk for school failure. Children were randomly assigned to participate in programs employing
(1) the High/Scope curriculum model which balances child- and teacher-directed instructional activities,
(2) a direct instruction model in which it is primarily teachers who initiate activities, or (3) a traditional
nursery school program in which classroom activities are the teacher’s responses to the child’s expressed
needs and interests, and teachers encourage children to engage in free play.
The High/Scope curriculum provides children with opportunities to make choices about their activities by
identifying goals and making plans to achieve them. Students are also encouraged to recall or reflect upon
different experiences they have had during the day, taking time to consider ideas and concepts they have
discovered and discuss what they might do to build on or extend what they have learned. The plan-do-review
sequence helps children develop language and social behavioral skills and contributes to the development of
higher-order thinking skills such as making predictions, solving problems, and anticipating outcomes.64 This
model provides autonomy and assists in the development of analytical abilities, abstract thinking, problem
solving skills, self regulation, and metacognitive skills, all of which are essential for success in school.
Adults who had attended the High/Scope program as children experienced fewer social difficulties and were
more likely to participate in volunteer work, vote, and stay married longer than their peers who had participated
in the other programs. Other studies also suggest that a balanced curriculum can have a significant
long-term impact on sociobehavioral outcomes,65 including more prosocial behavior and better relationships
with peers in early elementary school.66 These suggest that more attention to how children are taught and
the kinds of relationships children and adults have in preschool programs may be the key to avoiding even
small negative effects on aggression and maximizing positive effects on social and emotional development
and behavior.
The High/Scope curriculum study is just one small experiment, but the field is decidedly lacking in randomized
trials investigating the effects of curriculum on social and emotional development on long-term
social and emotional development. Indeed, the experimental literature has tended to focus on highly specific
interventions for children identified as having serious problems rather than on a whole child
approach for the general population.67 The preschool education programs found to be the most effective in
preventing antisocial behavior and delinquency are quality programs with balanced curricula that focus on
the needs of the children,68 provide opportunities for peer interactions during play and produce high levels
of teacher-child closeness.69
Understanding the impact of quality preschool education is the first step, but providing programs
that foster healthy emotional development requires foresight, planning and the support of politicians,
communities and families.

The Role of Preschool Quality and Curriculum

Successful preschool programs may differ in some ways, but they all are high quality programs, withwell-trained staff who focus attention on the needs of each of their students. In policy terms, this meansthat the programs share the following characteristics:61• Small group sizes• A partnership with parents• A sound curriculum that addresses the needs of the whole child• High adult-child ratios• Competitive staff compensation and benefits to attract and retain good staff• Well-prepared teachers and ongoing professional developmentThe following sidebar (p. 13) discusses some of these aspects of preschool program quality in greaterdetail. In addition to these important program elements, however, the methods of teaching and organizingstudent activities are highly influential in the development of social competency. Many child developmentexperts feel that early childhood programs that employ only didactic methods of instruction may failto enhance social and emotional skills.62 This type of instruction does not always provide children withopportunities to develop problem-solving abilities and may negatively affect their development of socialand emotional skills, which can have long-term consequences for learning.

via The Role of Preschool Quality and Curriculum.