Computer education: Provide tax breaks

With the thrust of the government to further education and to get the education system up inline with coming times, the sector is poised for growth.  

The India computer education industry is going through a wave of change with the government's opening up the sector for private sector participation. The governments at the central and state levels are coming out with tenders for computerisation of the public schools and are pressing for computer education at the school level so as make the new generation upbeat to the current global scenario.

The quarter gone by has seen continued good performance by the private sector players.

In the 11th Plan, the government has budgeted Rs 411 billion to set up ICT labs for computer-aided learning and Edu-sat centers for distance learning programmes.

The government has also proposed Rs 310 billion for the National Skill Development Programme in the plan period, for training through virtual centers.

The India education space could be one of the largest markets in Asia with a population of over 1.13 billion. With the government planning to spend around 5% of GDP in the next 5 years on education, the market could be any where worth $50-55 billion.

Industry expectations

In the Union Budget 2009, the government had increased the allocation by 6% at Rs 36400 crore. The industry is expecting further increase in the current budget.

The industry is demanding tax breaks to Companies investing in Education infrastructure so as to encourage fast paced growth in education infrastructure.

Strengthen the education sector

Sanjeev Duggal, CEO and executive director, Centum Learning, said, "The budget as far as education sector is concerned should thrust upon growing unemployable workforce that is a result of mismatch between skill-sets needed for the job and yester years' curriculum, quality standards which are overtly promised and under delivered, an independent regulator for higher education which can deliver international standards right here in India and policy statements on models for public-private partnerships, schemes to make higher education more affordable and allowing entry of foreign players in the Indian market in various formats."

Sanjeev Duggal has listed his recommendations for the Budget 2010-11 as follows:

1) Increased budgetary allocation to strengthen the education sector, and for creating the requisite infrastructure,

2) Making higher education more affordable by reducing the rate of interest on educational loans

3) Special training programmes for teachers and professors to improve the level and quality of imparting education

4) Incentives to corporate for training fresh graduates and involve corporate in graduate level education thereby increasing the employability of the students

5) Encouragement to the participation of private sector in higher education and to partner government in its skill-building mission.

6) Provision of services by foreign universities should be encouraged with clear guidelines. This would result in the availability of global education to students within the country, foreign exchange savings and reduced brain drain.

Analysts expectations

Allocations for education are likely to be increased.  

Stocks to watch

Educomp Solutions, Everonn Systems, NIIT

Outlook

The Indian IT education & training and ICT sector has huge untapped potentials. The government is focused on improving literacy and quality of education.

Any further thrust in the budget would boost the sector further. The spending on education is expected to rise 12-fold per household between FY1995-2025E due to rise in income levels of the Indian middle class.

However, the sector is unorganised with regional content and a large number of regional players with large dependence on government spending and lack of quality education in rural areas. Any delay in the government programme and red-tapism can delay the growth.