Business Today

The advent of edupreneurs

The P-word often rises unbidden in the hallowed halls of education. But now many are beginning to shed their inhibitions about it. Shamni Pande tells more.

Shamni Pande        Print Edition: September 20, 2009

They shun the word-fearing it like "he-who-must-not-be-named," the Dark Lord Voldemort, whose presence permeates every Harry Potter book. Like "you-know-who," profit-its motive and existence-is seldom uttered by those who own and operate the educational institutions. "Surplus", yes. But the laws governing core education simply do not allow or recognise the term profit.

Paradoxically, the government wants to involve entrepreneurs only if they agree to leave the term outside the door. Yet, just look at the tycoons that education has created in the private sector. An exclusive Technopak study for Business Today suggests that the Manipal Academy for Higher Education rakes in revenues of Rs 814 crore, Amity Rs 600 crore, the Delhi Public School Society Rs 400 crore and Indian Institute of Planning & Management Rs 200 crore. Of course, none of them would be caught dead uttering the word profit.

The K-12 (KG to Class XII) and higher education sectors are governed by Byzantine laws, with only registered, not-for-profit trusts or societies allowed to own and run institutions. In the mix, entrepreneurs have been, well, enterprising! For instance, GEMS Education has a transparent three-company set up, where one company owns the trusts, another owns the properties on which the schools sit and a third offers the school management, educational aids, etc.

Higher Education
Vocational and Training
Ancillary Segments
Test Preparation
Child Skill Devt
Database Management
K-12 Schools
Enrollment Management
Post Graduation
Finishing School
Admissions Outsourcing
Vocational & IT Training
Teacher Training
Source: Technopak

"We have three business models in India of which one is where we run our own schools. In this, our unit that has set up the trust is in charge of the school and this hires the land and the management skills and education aids from our other two companies," says Ajey Kumar, Country Head, GEMS Education.

Indeed, earlier this year, the government conferred the nation's highest civilian honour, the Padma Shri, on Sunny Varkey, Founder & Chairman of GEMS Education, in recognition of his "outstanding contribution to education and social service". Even as the government gets lost in doublespeak, those in the business have spread across sectors and opened up new frontiers: an IT training shop plans a university, a higher education specialist is getting into K-12.

One authority figure, though, has called a spade a spade. "We should allow private sector money to come into higher education. Surreptitious privatisation is already a fact of life. It will be better to let this happen openly; there can then also be open monitoring," writes Kaushik Basu, Professor of Economics, Cornell University and a member of the Yash Pal Committee on reforming higher education in India. But that was in his dissent note!

In the following pages, Business Today attempts to present a comprehensive package, including reports, exclusive columns and an interview with HRD Minister Kapil Sibal. We look at various business models, the regulatory complexities and business dynamics governing each segment across the education spectrum ranging from K-12 to higher education and vocational education. A caveat: BT doesn't endorse any of the institutions - or their promoters - profiled. Our attempt is to highlight the entrepreneurial successes, activities and the sheer value being unlocked - even though few in the government are in a mood to acknowledge it.

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