New Delhi, June 24 The revenue of higher education institutions is expected to expand by 9-11 per cent in FY2026, similar to the growth estimated for FY2025, on the back of expanding seat capacities, improving enrolments and addition of courses, according to a report released by rating agency ICRA on Tuesday.
Moreover, tightening student visa norms in the US, the UK, and Canada is likely to aid Indian higher education institutions in the near to medium term. ICRA’s analysis suggests that the credit profile of these institutes, especially those catering to the medical stream, has witnessed steady improvement in recent years.
With nearly 15-20 per cent of India’s population estimated to be in the 15-24 age bracket, and with improving literacy rates, the demand for higher education in the country is projected to increase over the next decade.
While the increasing cost of higher education has remained a deterrent, improving access to credit (education loan) for students vying for higher education from various financial institutions has been providing support. Additionally, the Centre’s expenditure on higher education has doubled in the last 10 years, which, coupled with the rise in the number of universities from 642 in AY2011 to around 1,189 as of AY2025, has translated into a handsome revenue growth for major universities, the report states.
Healthy admissions, along with an annual fee hike of around 6-8 per cent, have translated into a strong compounded annual growth rate (CAGR) of 15 per cent in revenue growth for these colleges during FY2020-FY2024.
Suprio Banerjee, Vice President at ICRA, said: "The higher education sector in India is poised for growth owing to continued strong demand, increasing disposable family income, easy access to credit, and enhanced Government focus and private sector participation, especially in the medical and engineering stream. However, the sector faces challenges such as fragmentation, infrastructure deficiencies, affordability issues, employability concerns, shortage of qualified faculty, and limited autonomy due to high regulations."
The gross enrolment ratio (GER) for higher education has risen over the years to around 28 per cent in AY2022 from 21 per cent in AY2012. The NEP 2020’s target has been to boost the GER in higher education to 50 per cent by 2035, which, though ambitious, also reflects the large untapped growth potential for the sector, the report added.
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