India: Budget 2017: Reform, Growth And Investment Opportunities In The Indian Education Sector

Last Updated: 15 February 2017
Article by Vivek Kathpalia, Aarushi Jain and Pooja Kapadia

Like every year, the Finance Minister of India tabled the union budget for the year 2017. Although a budget is mostly about financial planning, it also reveals the thought process and plans of the Government and hence has an importance of its own.

The increase in the budget outlay by 9.9% over the previous budget for education is a welcome step and was expected. What is refreshing is the progressive and liberalizing changes proposed by the Government that have the potential to revolutionize the Indian education system.

100% foreign direct investment is allowed in education under automatic route. However, investors, both financial and strategic are still wary of this sector. The major deterrent continues to be the archaic laws which have failed to keep pace with time, regulatory hurdles and bottlenecks at the administrative level. The focus of the Government to bring about reform in the manner and functioning of existing regulators, use of technology in education, digitization and encouragement of new- age, better quality, skill based learning which will help in overcoming these issues. In addition, the approach of 'education for employment', in turn, offers a sea of new opportunities for investors.

Some key takeaways from the Budget are:

  1. Proposed changes in the regulatory framework:
    1. Reforming UGC

News that the Government plans to reform the University Grants Commission ("UGC"), a body responsible for regulating universities in India, has been doing the rounds for a while. The Government has affirmed this, for the first time, in a budget speech. Though the details are still awaited, this should give comfort to all stakeholders in higher education. Hopefully, the reforms will also keep the global community in mind and make it easier for reputed foreign universities to provide regulated courses in India.

  1. Administrative and Academic autonomy:

While the current regulations leave very little room for autonomy, the present budget has promised to provide greater administrative and academic autonomy to good quality higher education institutions. This seems to be a step further from the 2016 budget, which proposed setting up of 20 World Class Universities of which 10 universities could be set up by private institutions. Draft Guidelines and Regulations for the establishment of World Class Universities were released in 2016 itself. These regulations proposed to extend greater autonomy to such world class institutions so as to enable them to provide quality education and infrastructure without being throttled by administrative and regulatory limitations. One is hopeful that the announcements made in Budget 2017, would result in relaxed norms for the overall running of these institutions, deciding the syllabi, foreign partnerships et al.

  1. Accreditation Based Ranking:

Very few Indian universities and colleges are regarded to be at par with international standards. In an attempt to improve the quality of education and facilities at educational institutions, the Government is focusing on reforming the framework of accreditation based rankings. Since an overhaul of the institutions to match up to world class standards will require investment, technology up gradation, know-how and expertise in education services, this could open doors for investors, foreign educational institutions, domestic and foreign service providers in this sector.

  1. Credit Based System:

The traditional studying pattern in India for students has been that students enroll in a course, study a set pattern of subjects and courses to obtain a degree or diploma after clearing an exam. The UGC and the Government have recognized that this system does not 'fit the bill' for all. To facilitate student mobility across institutions within and across countries and also enable potential employers to assess the performance of students, the UGC has released 'Guidelines on Adoption of Choice Based Credit System'. 1 This system gives students the flexibility to select different kinds of courses based on their interests. Given that credit based systems are popular in other countries and have their own benefits, the Government has emphasized that it will have a policy framework for such credit based programmes. Hopefully, this will incentivize institutions, both domestic and foreign, to offer variety of courses for the benefit of students in India.

  1. National Testing Agency

A proposal has been made to establish a National Testing Agency as an autonomous and self-sustained premier testing organization which will conduct entrance examinations for admissions to higher education institutions. This will help bodies such CBSE, AICTE and other premier institutions free their bandwidth from these administrative responsibilities and concentrate their focus on academics.

  1.  Use of Technology
    1. Promoting Swayam

EdTech models, focused on e-learning, are gaining popularity amongst students worldwide for they not only provide access to good quality education, but are more accessible and affordable. The budget has highlighted the Government's interest in enhancing development of skills through its free online platform 'SWAYAM' 2 launched in 2016. The goal is to introduce over 350 new online degree, diploma, certification and other courses such as MOOCs on this platform. There are also plans that SWAYAM platform will be linked with DTH channels. DTH has a wide reach in our country straight upto rural level. While internet is penetrating, Indians are yet to 'cut the cord' and television is here to stay. Offering programmes through DTH will ensure reach to masses. Since offering education through online mode is still unregulated in India, there is a huge potential for to offer new programmes and services through this platform.

  1. Digigaon:

DigiGaon, an initiative to digitize villages, is proposed to be launched to provide tele-medicine, education and skill training through digital technology. This project is proposed to have far reaching impact on the overall quality of life as it will enable access to health care and education without the necessity of travel.

  1. Reforms in the medical sector

The Government announced that it is committed to take steps reforming the regulatory framework of Medical Education and Practice in India. Plans to replace the Medical Council of India, a statutory body responsible for establishing and maintaining high standards of medical education and recognition of medical qualifications in India, with another regulator have already been unveiled by the Government by releasing 'The National Medical Commission Bill, 2016'.

Focusing on healthcare services, in addition to proposing additional number of medical colleges, the Government has recognized that there is a dearth of specialist doctors especially in the Secondary and Tertiary levels of health care. To that extent, it has been decided to take steps to create additional 5,000 Post Graduate seats per annum. Further, it is also proposed to roll out Diplomate of National Board ('DNB') courses in big District Hospitals; strengthen PG teaching in select ESI and Municipal Corporation Hospitals; and encourage reputed Private Hospitals to start DNB courses. The State Governments are to take steps to implement this mandate.

This initiative, especially of improving medical education through private hospitals, could attract FDI and FVCI into India for this sector.

  1. Innovation Fund:

A proposal has been made to create an Innovation Fund for Secondary Education to encourage local innovation for ensuring universal access, gender parity and quality improvement. The focus of the fund will be on educationally backward blocks in the various districts in India.


The 2017 budget, has focused on regulatory reforms, use of technology and skill development in the education sector. These are forward thinking reforms and an urgent requirement for our people. The central and state governments should also consult the stakeholders for their inputs while executing these plans. The proposals, if implemented properly, will set the stage for a game changing way in which India educates.




The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Vivek Kathpalia
Aarushi Jain
Pooja Kapadia
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions