Aiming For High Scores

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Educating people is a lucrative business without doubt. Conducting entrance examinations to put people into colleges is perhaps equally profitable. At last count, at least four home-grown players and a couple of foreign stalwarts were eyeing a piece of the Rs 5,240-crore higher education examination market.

University entrance examinations themselves are estimated to be a Rs 3,100-crore market. National-level entrance tests come in next at Rs 1,340 crore, university semester examinations are a Rs 650-crore market and state-level entrance tests are worth Rs 150 crore.

Those in the fray include Bangalore-based MeritTrac and Eduquity, Delhi-based Pearson Vue and Aptech’s testing arm, Assess. Foreign companies include Prometric, which conducted the Common Admission Test (CAT) for IIMs; Graduate Management Admission Council (GMAC), which has developed the Graduate Management Admission Test (GMAT); and the Law School Admission Council (LSAC).

Even the Rs 5,240-crore estimate may be low. Arun Jethmalani, managing director of ValueNotes, a database outsourcing firm that put together the data, says “These are estimates based on a number of factors, viz, the number of students (entrance and final examinations at under-graduate and post-graduate levels), number of universities, examinations, examinations taken per student, examination fees (entrance and final levels), and the cost of examinations.” This leaves out in-course assessments, re-evaluations, re-tests and informal assessments.

Says R. Dhirendra, CEO of Eduquity, which conducts computer-based assessments for Birla Institute of Technology and Science, Pilani: “Examinations is taking on the contours of an industry because of the sheer numbers involved.” CAT had just 20,000 students 28 years ago. Now, it has almost 250,000 every year.

Lucrative Test
Examinations are a big source of revenue for any institute. Arun Nigavekar, former chairman of the University Grants Commission (UGC) and founder-director of National Assessment and Accreditation Council (NAAC), says, “Two hundred million university-level examinations are held every year.” Every student who wants to enter engineering, medicine or management streams takes 8-10 entrance tests. With the average cost of a paper being Rs 1,500, every  aspirant ends up spending Rs 12,000-15,000 on examinations alone.

Many institutes have now taken to conducting their own entrance examination. Education Promotion Society of India (EPSI), an umbrella organisation of private educational institutes, since 2008, has, for instance, started conducting its own entrance test called ENAT, or EPSI National Admission Test — covering nearly 100 courses — for admission to private universities affiliated to it. Manohar Chellani, secretary-general of EPSI, says nearly 120,000 students took this test last year. MeritTrac conducts the tests at 32 centres in as many cities. At Rs 1,000 a test, ENAT alone fetches EPSI Rs 12 crore a year.

Conducted on a much larger scale, CAT has been a revenue-earner for IIMs, bringing in close to Rs 50 crore annually. With the number of candidates increasing every year and the management of examinations becoming more difficult, the IIMs decided last year to outsource the entire process to a professional company, Prometric — a US-based assessments company, which has also designed the Graduate Record Examination (GRE) and the Test of English as Foreign Language (TOEFL). A Rs 200-crore deal was signed with Prometric for five years. Although a large part of the money would go to Prometric, the IIMs still earn a little while the company does the leg work. Industry experts say that out of the per student CAT fee of Rs 1,650, nearly Rs 1,100 would go to the service provider.