India spends barely 3% of its GDP on education, which is even less than what sub-Saharan countries spend. Vinita Sethi and Ritika Tewari say private equity & venture capital should be encouraged to bridge this investment deficit Much has been said about India’s demographic dividend, especially our ‘young’ population. But serious effort is required to leverage this advantage, particularly if sustainable growth of 9% or more is targeted over the next five years. Above all, our capacity to innovate will be a critical factor in influencing decisions concerning new investments that nurture high growth.
It is unconscionable that for a country with a GDP of $1.3 trillion and population of over a billion, barely 3% of GDP is accounted for by investment in the education sector. A decade ago, the US spent the most on education, roughly $500 billion, followed by Japan, Germany and France at $139 billion, $89 billion and $82 billion, respectively. Other top spenders included Norway, Malaysia, France and South Africa—all of whom spent in excess of 5% of GDP on education (2003 Environmental Scan, OCLC). Today, while Japan and Korea lead OECD countries in education spending, both countries are also leaders in innovations, with strong links between industry and academia. Not surprisingly, China, having surpassed Japan’s GDP, has realised the urgency to universalise quality education and vowed to increase its spending on education from 3.3% to 4% of GDP by 2012.