According to India Ratings and Research (Ind-Ra) report, the impact of demonetization in the field of education sector has received mixed response. The report says that with demonetization most of the medical, engineering and nursery colleges have faced a negative impact due to the note ban as these institutes collect high capitation and donation fee in form of cash. These colleges have been a significant component of revenue and they have been adversely affected due to demonetization.
The report further explained that the number of cashless transactions has been increasing and it brings more transparency in the education sector which leads to increased interest of private sector particularly venture capital/ private equity players in the sector.
The report explained that the enrollments in higher education have increased slightly while the enrollments in school have increased marginally. The report further revealed that the education sector has a great potential to grow due to a huge demand-supply gap.
The report indicated that apart from new educational institutions, the existing educational institutions are churning in terms of curricula or course content and physical infrastructure to meet the demands of the economy.
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The government of India demonetized old Rs. 500 and Rs. 1,000 notes on November 8, 2016. The demonetization had a negative impact on all the educational institutions and students. In some states, students were unable to pay the examination fee on time as they were unable to withdraw the money from ATM due to heavy rush. However, on the long-run, demonetization created positive impact and lead to cashless transactions by ensuring transparency.