Education is key in India’s journey to become a $5 trillion economy

As the world nearly ground to a halt due to the pandemic-related lockdown, India’s education sector has remained resilient in its mission to continue on its way. For a country with the second highest population in the world and a lion’s share of the young population aged 10 to 24, a break, at least in education, was out of the question.

Innovators and educators worked their magic to create tech-enabled solutions that aspired to usher in a new normal for students tied to their homes, paving the way for digital tools, distance learning, and more such disruptions to help them to help continue their quest for learning. All of this has resulted in the learning process becoming a journey much more interesting, engaging and futuristic. And the result was commendable: India’s education and skills market is expected to double in this decade.

This resilience raises a question – can the education industry act as a catalyst to achieve India’s dream of $5 trillion economic growth? Could this be the big picture we are working towards?

The Indian education system: where it stands today

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We agree that the traditional education system will be replaced by a new avatar that is not limited to chalk and chatter in the classroom. First, we saw the emergence of virtual learning, where anyone can use digital resources to be part of a classroom without physical walls and strict time constraints preventing them. Online education allowed flexibility and a wide range of opportunities waiting to be explored both in India and abroad. The numbers back that fact: At a CAGR of 20%, the online education industry alone will reach a staggering $2.2 billion between this year and 2026.

But that’s not all that changes. There also seems to have erupted an emphasis on concept-based learning powered by artificial intelligence and machine learning. Another trend to watch is gamification of the learning process, which increases engagement and effectiveness. The focus of the Indian education system is now on critical thinking and problem solving, a step that is necessary in modern times. When the Union Cabinet passed the National Education Policy (NEP) in 2020, it clearly outlined the vision of a “new education” and it looks like the nation is on the cusp of a new and futuristic education system.

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India’s $5 Trillion Journey: How Education Works as a Catalyst

Accelerating internet penetration coupled with an increasing number of smartphone users are the two main causal factors contributing to the growth of the sector. The rise and transformation of India’s educational landscape has further accelerated job creation, the emergence of start-ups and an overall surge in growth for the economy. At the most basic level, education is essential to help people function as members of society, but beyond that, better educational outcomes can turn the country into a haven for economic growth.

In an attempt to make investment opportunities more accessible, the government is taking measures that can boost the growth of its economy and education sector. A notable step in this direction is the Go-Award for 100 percent foreign direct investment by the automatic route. In the years 2000 to 2021 alone, we’ve seen almost $6.74 billion in foreign direct investment for the same purpose. Added to this was the implementation of the new education policy in 2020, which aims to revitalize the framework of the country’s education system.

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As the education market skyrockets and will reach $313 billion by 2030, nearly five million additional jobs will be created, further impacting nearly 429 million learners. This will pave the way for affordable student lending and housing platforms, a thriving gig economy, skill and education development (both teachers and students), and an influx of investment opportunities. With the development of this market, which promises immense potential, start-ups and innovators will jump on the bandwagon and trigger further waves of transformation.

A thriving ecosystem is in the works, one that will set the wheels in motion for India to become a $5 trillion economy: and at its heart is the country’s education sector, its innovators, and emerging players waiting to disturb the room.



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Disclaimer

The views expressed above are the author’s own.



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