Content

1. The stark reality of educational costs in India
2. 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.