Half of India’s 1 billion population (~500 million) are in the 5 to 24 age bracket, and over 27% of the population is under the age of 14. No country has more young people.

India has more than 1.5 million schools, with over 250 million students, making it the largest school system in the world. 

However, India’s education system comes with its many on-going challenges.

The problems with India’s education system

Let’s look at a few basic facts pertaining to India’s educational system.

1) Poor access to high-quality education

India’s education system has drastically expanded and undergone various changes since independence in 1947, including creating a more homogeneous education system throughout the nation, making education a fundamental right of every child, and clamping down on unlicensed schools.

The tertiary (i.e. any level of education pursued beyond high school) student population increased from 5.7 million in 1996 to 37.4 million in 2019.

The number of universities grew from 190 in 1990 to 993 in 2019.

18,000 new colleges were established between 2008 and 2016. That’s roughly six new colleges a day!

Despite many advances, participation rates continue to be low, especially in rural areas and among lower castes and other disadvantaged groups. The average student in Western countries like the US or Germany gets 13 years of schooling, compared to just 5.4 years in India.

Moreover, the tertiary gross enrollment ratio (GER) in India is 29%. Compare this to the US which has 88%, Brazil 50%, China 54%, and Russia 85%. The global average tertiary GER is 36%, and India falls well below that.

The Indian government wants to increase the GER but faces many challenges in expanding access to education. For example, the India Brand Equity Foundation estimates that an additional 200,000 schools, 700 universities, 35,000 colleges, and 40 million seats in vocational training centers will need to be built to keep up with the country’s rapid population growth.

Moreover, India struggles with severe funding problems, leading to a shortage of seats available at public schools. Public education spending in India trails the other four BRICS countries’ economies (Brazil, Russia, China, and South Africa).

Notably, this number has gone up to 4.43% of GDP as of 2018, which is a step in the right direction, but still not enough.

Because of poor funding, India’s public schools have undertrained faculty, poor infrastructure, and outdated curricula. They also have little access to technology, which puts public schools well below international standards.

India scores second to last among 50 countries in the ranking of national systems of higher education.

This inequity has led to a majority of students enrolling in private schools – 78% of Indian colleges are privately owned, and these private schools cater to 66% of college students in India. Beyond colleges, the same trend can be seen across all school levels.

‍2) Fear of exams instead of Real learning

I remember my own experience going to school in India from the age of four to eight (before I moved to the US). School was heavily focused on memorization and exams, rather than exploration and learning.

The combined research output of 39 federally funded Indian universities is less than that of Stanford alone. Research and innovation investment in India is only 0.69% of GDP as compared to 2.8% in the US, 2.1% in China, 4.3% in Israel and 4.2% in South Korea.

This reveals that scientific research is not incentivized. The school systems are structured around students’ passing exams and achieving the highest “marks,” rather than true learning.

3) Suboptimal Pupil-to-Teacher ratio

The teacher-to-student ratio in India is below that of other BRIC countries, resulting in low personalization of lessons.

These are just a handful of the many challenges Indian school systems face. However, that’s not to say that everything is doom and gloom. India's unique situation (largest student population but suboptimal educational system) presents a lot of opportunities for growth and change. And best of all, India is well aware of this and is taking all the right steps.

Growth of Distance Education

Even though the education system has a lot of room for improvement, the country was early to embrace remote education as a means to increase access to education to rural areas.

India established IGNOU (Indira Gandhi National Open University) in 1975, a remote learning school. It is now India’s largest university, with more than three million students.

Another example is NPTEL (National Programme on Technology Enhanced Learning) which is a joint initiative MOOC by the top 7 institutions of India and has been a massively successful initiative by the government of India.

Distance learning has continued to grow in the past couple of decades. There are now 15 universities and 200 higher education institutions that offer distance learning in India. The number of distance-learning students grew from 2.74 million in 2006 to 4.2 million in 2011, accounting for 11% of all higher education enrollments, of which 44% are female.

Distance learning will continue to provide a promising alternative to in-person schools, and is expected to grow at 41% CAGR between 2016-2021.

The UGC, which is a body of the Ministry of Education in India, is responsible for quality assurance of distance-learning schools.

Government efforts to improve education in Education

There are also many efforts being made by the government to improve access and quality of education, such as the Foreign Education Providers Bill and The National Accreditation Regulatory Authority for Higher Educational Institutions Bill.

More importantly, in July 2020, the government launched the National Education Policy 2020 (NEP 2020) which implements sweeping changes across all education levels in India.

First off, the NEP changes the existing 10+2 structure of school education to a 5+3+3+4 structure (similar to the US).

Moreover, the policy aims to shift from an examination-based learning toward a play and discovery based style of learning with an emphasis on the scientific method and critical thinking. Instead of rote memorization that is commonplace today in Indian schools, the focus will be on real understanding and learning how to learn.

Another big reform the NEP aims to make is to promote multilingualism. Students will learn three languages, based on the student’s regions and personal choice, as long as at least two of the three languages are native to India.

The NEP also aims massively upgrade its teacher training programs, as well many other sweeping changes, which you can read in full here.‍

Overall, the NEP aims to achieve 50% GER by 2030 (vs. 29% today!) and increase public expenditures on education from 4.43% of GDP today to 6% of GDP as soon as possible. Clearly, the government is ambitious and audacious in its attempts to turn India into a global knowledge superpower.

For what's its worth, the US education expenditure as % of GDP grew from 2.9% to 6% 1950 to 1970.

Subsequently, the 1980s to 2000s was a prosperous period for the US. Perhaps India’s story will look similar?

Bringing Silicon Valley to Education in India

Beyond what the Government is doing to improve access and quality of education in India, there is something even more powerful at India’s disposal: startups

Using technology to improve both access and quality of education makes obvious sense. Private companies have an opportunity to tap into this market and make a massive impact to advance the population.

And it is happening! Ed Tech in India has silently exploded in the last couple years. The biggest Ed Tech start-up in India is BYJU, a learning app that helps children interactively learn Math, English and a variety of subjects through stories featuring Disney and Pixar characters.

2020 has been an unexpected blessing for Ed Tech companies like BYJU. When the pandemic started, BYJU made all their apps free. They went from 40 million to 65 million subscribers in the first four months of the pandemic. More than four million of these users are annual paid subscribers, and 80% of paid users renew their subscriptions. And 60% of BYJU’s students come from outside of the bigger cities, where access to education is not as readily available.

They have been growing at least 100% year over year since 2015, and made $1B in revenue and $150M in profit in 2020.

BYJU raised $500 million in capital earlier this year, making it the second-most valuable business in India today.

Less than two months after it raised the $500 million, BYJU closed another $200 million in a fresh round of funding, bringing the company’s valuation to $12 billion.

Given the surge in remote learning in 2020, BYJU is now rapidly trying to offer more subjects and grades and serve more markets. They made a big acquisition this year of another Ed Tech start-up called WhiteHat Jr., which will help them further expand their offerings.

And just this week, they acquired Aakash Education Services for $1 billion.

BYJU is not the only Ed Tech company that is thriving in India. Unacademy, for example, is India’s second most valued Ed Tech startup. It started as online test prep for government job entrance exams, and has since expanded to test prep for other Indian competitive exams. The app has over 135K paying users and a $500M valuation.

Besides BYJU and Unacademy, there are a number of others, including Vedantu, toppr, Simplilearn, InterviewBit, Classplus, and doubtnut.

Overall, there is a lot of optimism about Ed Tech in India. Makes sense, given that Indians highly value education and are willing to spend money on it. 

Online learning is going mainstream and there is no going back. This is the perfect opportunity for education in India to leapfrog the western world (just like it did with the internet and digital payments).

Ed Tech startups give India the opportunity to improve access and quality of education, beyond the efforts the government is already making. Given that India is now the world’s fastest-growing major economy, outpacing China’s in terms of growth rate, modernizing its education system will give India a competitive advantage.

But there’s a catch

However, modernizing education isn’t enough. People also need to be employed. Unfortunately, the employment prospects of graduates in India remains dire.

Indian authorities report that 60% of engineering graduates remain unemployed. Moreover, the youth unemployment rate continues to skyrocket:

The lack of access to high-quality education and jobs has always been a key driver for students to leave India to seek education elsewhere. The number of Indian international students enrolled in degree programs abroad doubled from 134,880 students in 2004 to 278,383 in 2017.

Obviously, this talent drain is not something the Indian government probably wants.

So it’s not just about fixing education, but also about creating jobs in the local markets. Given the rise of technology startups in India in the past decade, I have high hopes for job growth for engineering graduates. But we will have to wait and see :)

Final note: I did my best to fact-check all assumptions in this post. If you find any erroneous data or assumptions, please let me know and I will look into it. Thank you!