Role of Private Sector in Education

Education is very important as it makes an individual empowering. Self-help is easier for an educated person than one who is not educated.

Most of our premier institutions of education have been funded by the government (State or Central) and they are all run as not-for-profit enterprises.

Entry of private sector in the field of education began with professional courses such as engineering, dentistry, medicine, pharmacy, etc. The avenues for the private sector increased overtime as it was realised by the private sector that there was reasonable supply of interested students who could afford the cost of education.

How can private sector participation be increased in the field of education?

In order to encourage private players entry into the field of education, following measures could be undertaken by the government:

  1. Simplifying regulations by reducing input-based constraints that stifle operational autonomy.
  2. Introducing student-side financing to ensure a level-playing field between high quality public and private institutions.
  3. Creating enabling legislations at the state level to encourage private players to set up universities in those states.
  4. Expediting passage of the Innovation Universities Bill to encourage private players to invest significant amounts in setting up innovation universities which are independent of geographical constraints.
  5. Allowing players to set up of for-profit institutions, while putting in place a regulatory framework to ensure quality and transparency.

Merits of private players role

  1. Qualitative education is provided to the children as there is disciplined and efficient functioning of the institutes.
  2. The private institutes are always involved and up to date for the upgradation of the technologies in their institutes.
  3. Public has a mental satisfaction that they are having value for the money they are spending.

Demerits of private players role

  1. The main disadvantage of private institutions is that education provided by the private institutes is very costly. It is not feasible for the poor or even for ordinary people.
  2. Private institutions turn education institutions into private business firms and this makes the value of education go down.
  3. There is a concern over huge capitation fees demanded by the private institutes.
  4. The gap between poor and rich widened due to privatization. This brings about disparity.


It must be borne in mind that what is most important is imparting education, be it through private sector or public sector. It has been alleged that public institutes are not in good condition therefore, efforts must be made to make public schools as good as private ones. Private schools are important keeping in mind the urgent need of good schools in accordance with rising expectations and population.