Content
- The stark reality of educational costs in India
- Is the falling rupee a cause for alarm?
The stark reality of educational costs in India
Why Is It in News?
- New findings from the NSS 80th Round (April–June 2025) on education expenditure reveal:
- Rising costs of schooling and private tuition in India despite Article 21A’s guarantee of free and compulsory education.
- Increased enrolment in private schools across rural and urban sectors compared to the 75th Round (2017–18).
- Private tuition has become a major cost burden, with expenditure sharply rising with educational level.
- The data exposes a contradiction: a constitutional right to free education coexists with significant household spending, raising concerns about equity, affordability, and the future of universalisation goals under NEP 2020.
Relevance
GS2 – Polity & Social Justice
- Article 21A, RTE Act, NEP 2020.
- State’s responsibility vs household burden.
- Inequality in access to education.
GS2 – Governance
- Public service delivery; affordability barriers; need for reform.
- Fee regulation, teacher quality, public school revitalisation.
GS1 – Society
- Urban–rural divides, gender disparities, socio-economic stratification.
Practice Question
- Rising private schooling and coaching expenditure in India reveal a widening contradiction between constitutional guarantees and educational reality.Discuss in the light of NSS 80th Round findings.(250 Words)
Constitutional & Policy Framework
Article 21A (86th Amendment, 2002)
- Guarantees free and compulsory education for children aged 6–14 years.
- Operationalised through the Right of Children to Free and Compulsory Education Act, 2009.
NEP 2020 Expansion
- Extends the universalisation goal to ages 3–18, covering:
- Pre-primary
- Elementary
- Secondary education
- Target: Universal school education up to Class 12 by 2030.
Contradiction
- Despite guarantees, large household expenditures on schooling reveal:
- Gaps in public provisioning
- Quality deficiencies
- Rising dependence on private education and coaching
Key Findings of NSS 80th Round – School Enrolment Pattern
Overall School Enrolment (National)
- Government schools: 55.9%
- Private aided: 11.3%
- Private unaided: 31.9%
Urban vs Rural
- Private school enrolment:
- Urban: 51.4%
- Rural: 24.3%
- Gender gap: modest
- Boys: 34% private
- Girls: 29.5% private
Level-wise Trends
- Urban private school enrolment declines with level:
- Pre-primary: 62.9%
- Higher secondary: 42.3%
- Rural private enrolment: fairly stable across levels (21–28%).
Long-term Rise (vs NSS 75th Round)
- Rural private school share increasing across primary, middle, secondary.
- Urban private school share also rising significantly, especially in primary and middle levels.
Interpretation:
India is witnessing a steady shift toward privatisation of schooling, driven by perceived quality differences.
Costs of Schooling – The Affordability Crisis
Fee Payments
- Government schools:
- Rural: 25.3% pay fees
- Urban: 34.7%
- Private schools: ~98% pay fees across rural & urban.
Annual Fee Levels
Government Schools
- Rural: ₹823 (pre-primary) → ₹7,308 (higher secondary)
- Urban: ₹1,630 → ₹7,704
Private Schools
- Rural: ₹17,988 → ₹33,567
- Urban: ₹26,188 → ₹49,075
Monthly Burden vs Household Income
- Private schooling costs (monthly):
- Rural: ₹1,499–₹2,797
- Urban: ₹2,182–₹4,089
- MPCE comparison:
- Pre-primary private school cost ≈ income of poorest 5% households.
- Higher secondary private school cost ≈ MPCE of 3rd income decile.
Meaning:
Basic schooling is unaffordable for large sections of households despite RTE guarantees.
Private Tuition: Incidence & Cost
Share of Students Taking Tuition
- Rural: 25.5%
- Urban: 30.7%
- Rising sharply with education level, highest at secondary/higher secondary.
Expenditure per Student (Annual)
- Rural: ₹7,066 (average)
- Urban: ₹13,026
- Highest at:
- Rural higher secondary: ₹13,803
- Urban higher secondary: ₹22,394
Why is Tuition so Widespread?
- Household income & parental education strongly correlated.
- Private schools often have underpaid, underqualified teachers, pushing students to tuition.
- Tuition seen as prestige, a marker of “good parenting.”
- Tuition supplements poor school quality and exam-centric culture.
Structural data from Research
- Rising private schooling → rising household burden → widening inequality.
- Tuition is negatively associated with school quality:
- Better school quality → less need for tuition (2024 study by Agrawal, Gupta & Mondal).
- Thus, quality improvement in public schools reduces both inequality and household expenditure.
Implications for Equity & Universalisation
A. Financial Inequality
- Poor households forced into:
- High private school costs
- High tuition costs
- Threatens principle of free & universal education.
B. Social Inequality
- Wealthier students access private schooling + tuition → better outcomes → entrenched privilege.
C. Public School Decline
- Falling enrolment → shrinking budgets → quality deterioration → negative cycle.
D. NEP Goal at Risk
- Universalisation to age 18 by 2030 is jeopardised if:
- Public education remains underfunded
- Private costs continue rising
- Coaching culture expands
Why Revival of Public Schools Is Critical ?
- Reduces financial burden on households.
- Ensures equal learning opportunities.
- Bridges social divides in outcomes.
- Enhances trust in government institutions.
- Supports SDG-4: Inclusive & equitable quality education.
Policy Way Forward
- Improve teacher availability, training, accountability.
- Invest in infrastructure, labs, digital access.
- Expand early childhood care through Anganwadi–school linkage.
- Provide free supplementary classes to counter tuition reliance.
- Regulate private school fee structures transparently.
- Use school quality audits to strengthen public trust.
- Ensure NEP 2020 implementation with focus on inclusion & affordability.
Is the falling rupee a cause for alarm?
Why Is It in News?
- Over the past few days, the rupee fell below ₹90 per US dollar and has remained around that level.
- Political debate intensified in Parliament, but economists emphasise understanding macro drivers, not rhetoric.
- The editorials presents insights on:
- Why the rupee is falling
- How India compares with other currencies
- Whether the fall is harmful
- What this means for policy and RBI action
The question: Is the falling rupee a cause for alarm?
Relevance
GS3 – Economy
- Currency depreciation
- External sector management
- Balance of payments
- FPI flows, forex reserves
- RBI’s role in exchange rate stability
GS3 – Inflation & Macroeconomic Stability
- Imported inflation, fiscal implications
- Sectoral impact: exports vs. imports
Practice Question
- India’s recent rupee depreciation reflects more sentiment-driven pressures than structural weakness. Discuss the drivers, macroeconomic implications, and the appropriate policy response.(250 Words)
What Determines an Exchange Rate?
Exchange rates depend on:
- Demand and supply of foreign currency
- Trade deficit / current account deficit
- Capital flows (FPI/FII inflows/outflows)
- Forex reserves position
- Global dollar strength
- Market sentiment & expectations
- RBI interventions
Depreciation = more rupees needed to buy a dollar.
Why Is the Rupee Falling?
A. Weakening Fundamentals
- Higher trade deficit → more demand for dollars.
- Rising current account deficit (CAD).
- Negative FPI flows → capital leaving Indian markets.
- Falling (or reduced build-up of) forex reserves.
B. Sentiment Factors
- Uncertainty over the India–U.S. tariff agreement → negative market expectations.
- Expectations of global slowdown → FPI shifts to other markets with better short-term returns.
C. Market Mechanics
- RBI’s limited intervention indicates:
- Depreciation is within “acceptable limits”
- Central bank aims to prevent volatility, not defend a fixed level
D. Trade Imbalances (as per Banerjee)
- Import growth > export growth → structural dollar demand.
- Portfolio investors shifting to markets where valuations are cheaper.
Is the Rupee an Outlier Compared to Other Currencies?
Recent short-term performance
- Rupee is one of the worst performers in the last 3 months.
Medium-term performance
- Over the past 2 years, rupee has done better than most EM currencies except South Korea.
- Many emerging economies have seen far steeper depreciation.
Meaning:
The rupee’s fall is not proportionate to weakness in fundamentals but is driven by short-term pressures.
Does a Falling Rupee Benefit India?
Possible Benefits
- Exports become more competitive
- Particularly helpful when facing tariff headwinds from the U.S.
- Service exporters gain
- Higher rupee realisation = improved margins
- Potential productivity spillover (bonuses → consumption)
Theoretical Advantage
- Depreciation of 4–5% can improve Indian export prices relative to competitors.
Costs and Downsides
- Imports become more expensive
- India is a large importer of crude oil, fertilizers, electronics.
- Imported inflation
- 5% depreciation → 0.3–0.4% rise in CPI inflation.
- Current low inflation means this impact is manageable.
- Business volatility
- Exchange rate instability → hard for importers/exporters to plan.
- Fiscal pressure
- Higher fertilizer subsidy
- Higher cost of government imports
- But not enough to break fiscal arithmetic
Does a Falling Rupee Indicate Economic Weakness?
Economists’ View: No
- GDP growth strong.
- CAD manageable.
- Forex reserves cover 11 months of imports.
- Inflation benign.
- Capex cycle robust.
- Monetary and fiscal policy stable.
Conclusion:
The fall is not structural; it is sentiment-driven and temporary.
Should the RBI Intervene More?
Current RBI stance
- Prevent volatility, not defend a specific rate.
- Intervention appears limited but calibrated.
Experts’ view
- No major intervention needed unless:
- Volatility spikes
- Depreciation becomes self-fulfilling
- Moderate depreciation is acceptable and even useful.
Overall Assessment: Is This an Alarm Situation?
Not alarming because:
- Macro fundamentals strong.
- Inflation impact limited.
- Exporters benefit.
- Depreciation aligned with other EM currencies.
Concerns remain:
- Volatility hurts business planning.
- Tariff uncertainty with U.S. affecting sentiment.
- FPI outflows may continue if global returns elsewhere look better.
