On paper, school is free for most Indian children. In real life, families pay—often a lot. Fees (even in government schools in some places), uniforms, transport, textbooks, coaching: the small bills add up to a big barrier. When the national statistics office released its latest education-spending snapshot this August, it confirmed what parents already feel in their wallets and what many non-profits see in the field: the cost of schooling is rising, urban families pay more than rural households, private coaching is mainstream — and boys typically attract more spending than girls.
This matters because behind every rupee lies a choice. When a household decides which child gets a private school seat, who gets coaching, whether to buy the reference book or take the bus to school, it is making an investment judgment about a child’s future. If those judgments consistently favour boys — and the data suggest they often do — we shouldn’t be surprised when learning gaps and labour-market gaps persist years later.
The question, then, is not just how much India spends on school education, but who it spends on, what it spends on and whether that spending translates into learning. Put differently: How do we make every rupee count — for girls, for poor households and for the students most at risk of falling behind?
This essay is a field-level view of India’s school spending in 2025 and a practical playbook for making it work better. It draws on the Government of India’s Comprehensive Modular Survey: Education (CMS:E) 2025, the Annual Status of Education Report (ASER 2022), the government’s foundational literacy and numeracy mission (NIPUN Bharat), UDISE+ updates and frontline experience from educators and implementers—including Smile Foundation.
The bill for “free” education
The new CMS:E survey (April–June 2025) set out to answer a basic question: what do households actually spend on a child’s schooling in the current academic year? It deliberately separated schooling costs from private coaching costs (unlike earlier rounds) and it broke spending into realistic buckets — course fees, transport, uniforms, textbooks/stationery and “other.” Three patterns stand out.
- Government schools dominate enrolment but families still pay.
Government schools account for 55.9% of enrolments country-wide (about two-thirds in rural India). And while most children in government schools don’t pay course fees, a full 26.7% do — and that share rises to 25.3% in rural areas. In non-government schools, the near-universal expectation is payment: 95.7% of students report course-fee outgo. - The per-student cost to families varies massively by school type and location.
Average household spending per student in government schools is ₹2,863, compared with ₹25,002 in non-government schools (rural + urban combined). Urban households spend more than rural households across every line item — fees, transport, uniforms and books. Course fees are the single biggest item, averaging ₹7,111 across India (urban ~₹15,143; rural ~₹3,979). - Private coaching is no longer niche.
27% of all currently enrolled students took (or are taking) private coaching this year — more in urban areas (30.7%) than rural (25.5%). At higher secondary, urban families spend nearly ₹9,950 a year on coaching versus ₹4,548 in rural India.
These are national averages; states differ widely. Early media analyses of the CMS:E point to higher total spends in states like Haryana and Manipur with Bihar on the lower end — reminding us that affordability and access are intensely local. And the top line gender story is sobering: families spend more on boys than girls, with boys more likely to be in private schools and in private coaching.
A final, crucial footnote: 95% of school-education spending comes from the family itself; government scholarships show up as the primary funding source in just 1.2% of cases. For the median Indian household, the school bill is personal and nontrivial.
Do higher outlays buy better learning? Not necessarily.
The uncomfortable truth is that spending is not the same as learning. India’s rural learning levels took a clear hit after COVID-19 disruptions. ASER 2022 found that just 20.5% of Grade-3 children in rural India could read a Grade-2 text — evidence of widespread “learning poverty.” A drop in basic arithmetic mirrored the reading slide. If more rupees automatically delivered outcomes, we wouldn’t see this picture.
The government’s answer is NIPUN Bharat — a national mission to ensure every child acquires foundational literacy and numeracy (FLN) by 2026–27 (end-Grade 3, or Grade 5 at the latest). The emphasis is on simple but powerful ideas: teach at the right level, mother-tongue based instruction in early years, hands-on learning, frequent low-stakes assessments and teacher support. The core insight is also financial: the cheapest remediation is the early remediation because every year a child falls behind, costs compound for families and the system alike.
The good news is that the current administrative data point to improving retention and lower dropouts, including in difficult transition grades. UDISE+ updates for 2024–25 highlight declining dropout rates at the preparatory, middle and secondary stages compared with recent years. But within the averages lie hard-to-reach districts and pockets where girls, tribal children and first-generation learners remain at greater risk.
Bottom line: Money matters—especially for transport, coaching and the “hidden” costs of school. But learning gains hinge on how we spend and what we do in classrooms and communities.
Where families bleed and how to plug the leak
If you trace the line items from the CMS:E tables to field realities, five drains explain why schooling feels expensive even in “free” systems:
(1) Transport
For secondary school, the nearest viable option is often several kilometres away. Daily mobility — especially for girls — requires safe, affordable transport. CMS:E shows urban transport outlays far exceed rural spends, but in rural blocks with scattered habitations, simply getting to school is the barrier.
(2) Coaching
Coaching fills perceived gaps — test prep, board exams, competitive entry. It also widens inequality when only some can pay. The survey’s 27% coaching uptake is an all-India average; in many towns it’s much higher at secondary levels.
(3) Fee “exceptions”
Even where fees are officially minimal, parents report paying for “development funds,” “activity charges” or periodic collections — especially in low-fee private schools.
(4) Learning materials and uniforms
Where textbook supply chains slip or where multiple “guide” books are encouraged, household costs rise.
(5) Lost time
What the tables don’t price: hours spent navigating admissions, collecting scholarships or chasing transfers — costs that hit casual labour households hardest.
The policy fixes are not mysterious: reliable school transport for girls, predictable and timely textbook/uniform provision, transparent fee regulation and better in-school teaching so families don’t feel compelled to pay for coaching. India has many of these ideas on paper; the bottleneck is execution.
What does gender have to do with it?
A lot. The most striking finding in the new education-spend data is the gender gap in household outlays: boys see higher average spend than girls, in both rural and urban settings and across school types. More boys are enrolled in private schools and more boys attend coaching. When money is tight, a household might rationalise: “Let the boy take the bus; the girl can study at home.” Repeat that logic in millions of homes and you get the macro picture we see today.
But there’s another, less discussed piece that girls’ learning levels recover faster when schools and communities invest in FLN and safe access. The returns to girls’ education are well documented — delayed marriage, lower fertility, better child health — but even at the micro level, when a Grade-3 girl moves from “can’t decode a sentence” to “can read a short paragraph unaided,” everything changes: her confidence, attendance and willingness to persist through Grade 10. That’s precisely why the focus on NIPUN Bharat is not “soft” — it’s hard economics. Early skills lower the need for expensive late-stage fixes (remedial coaching, re-enrolment drives) and raise the return on every rupee families spend.
Making rupees work harder: Five levers that align with what Smile Foundation does on the ground
Smile Foundation operates where budgets are to be utilised efficiently and choices are hard. The approach has increasingly converged on a simple rule: move early, move locally, move with families. Here are five spending-smart levers — policy + practice — that track closely with what organisations like Smile implement.
1) Fix the foundation (FLN), not just the façade
If a Grade-3 child can’t read a Grade-2 text, the entire edifice wobbles. ASER 2022’s reading shock underscored that we can’t coach our way out of foundational gaps. Smile Foundation’s learning centres and school support programmes tilt resources to early-grade reading and numeracy — teacher mentoring, small-group instruction by level, multilingual material, and continuous low-stakes assessments. Every percentage point of improvement at Grade 2–3 reduces downstream family spending on emergency coaching at Grade 9–10. This is the cheapest way to improve board-exam pass rates five years later.
Policy fit: NIPUN Bharat’s 2026–27 target makes this the system’s top priority; CSR and philanthropy should follow suit — fund early-grade teacher support and community-based reading camps before flashy test-prep grants.
2) De-risk the daily commute — especially for girls
A scholarship that pays for exam fees but ignores transport is a leaky subsidy. In many districts, bike grants, bus passes or pooled vans are the single most cost-effective way to raise girls’ attendance and reduce drop-outs. Smile’s community mobilisers often solve attendance problems by negotiating transport — sometimes as basic as mapping safe walking groups and arranging parent volunteers for the last mile.
Policy fit: State schemes that underwrite secondary-school transport for girls pay for themselves through higher retention (and lower early marriage). CMS:E’s line items show families already spend real money on transport; smart programmes co-pay that spend rather than duplicating it.
3) Replace after-hours coaching with in-school mastery time
Coaching will not disappear but it can shrink if school time is used for catch-up and mastery. Structured “practice hours” before or after school, run by trained community educators and teachers together, have shown results in multiple states at low cost. Smile Foundation leans on volunteer tutors, alumni and mothers’ groups to run reading circles and math clubs — free substitutes for paid coaching.
Policy fit: Schools that hit NIPUN benchmarks should get small, flexible grants for mastery periods; CSR partners can underwrite community tutors and basic learning aids that lower families’ coaching expenditures.
4) Put scholarships where they change behaviour
CMS:E shows just 1.2% of students report government scholarships as their first funding source. That is strikingly low. Part of the problem is friction — forms, bank links, proof documents; part is design — benefits that don’t target the biggest barriers. The empirical case is strong for girls-only, Grade-to-Grade persistence scholarships, transport stipends and device/data vouchers tied to attendance and FLN milestones. Smile’s own scholarship models increasingly “bundle” mentorship + counselling + cash so money translates into attendance — and attendance into learning.
Policy fit: Shift from generic fee reimbursements to barrier-aligned micro-scholarships that tackle transport, devices or exam fees at exactly the point families face the cost.
5) Make parents partners
Households finance 95% of school spending and make the hard calls; they must be in the loop. Parent workshops that demystify the syllabus, homework routines and exam timelines cost little and save a lot. In Smile-supported geographies, simple tactics — home-learning kits, attendance nudges via WhatsApp and parent–teacher circles — raise study time at home, reducing later coaching dependence.
What about the system side? Where the state can tilt the field
None of the above absolves the system from doing the heavy lifting. Four system-level moves will stretch household rupees and public budgets alike:
A. Lock in FLN as a non-negotiable K-3 outcome.
Keep measuring what matters — decoding, fluency, number sense — and give teachers practical coaching, not just trainings. The best money in education is spent on teacher support tied to in-class practice, not one-off workshops.
B. Predictable textbooks and uniforms.
CMS:E shows textbooks/stationery and uniforms are the second and third largest expenses after fees. When the supply chain is timely, families trust the public system and are less likely to jump to low-fee private schools simply for predictability.
C. Transparent fee rules and enforcement.
Clarity on what can be charged, when and by how much reduces the nickel-and-diming that alienates parents. Where self-financed schools are part of the landscape, fee-transparency dashboards and grievance redress protect families.
D. Target the transition years.
UDISE+ data show improvements, but the hardest grades remain VIII→IX and X→XI, when distances grow and exams bite. A mix of bridge courses, counselling, transport support and career exposure can keep students on track and make every preceding rupee spent worthwhile.
A note on caution and comparability
The CMS:E press note is admirably clear about its limits: it is designed for national-level estimates in the current academic year; state-level cuts require care; and the results aren’t directly comparable with 2017–18 NSS education rounds because the 2025 survey separated coaching from schooling costs and re-classified pre-primary. Treat it as a sharp snapshot, not a trend line.
That said, triangulation with UDISE+ and ASER gives a coherent picture: families pay substantial out-of-pocket costs; learning at the foundation needs urgent attention; dropouts are improving overall but remain fragile where distances and language barriers loom.
Where Smile Foundation fits: Stretching the household rupee
It’s tempting to think of a non-profit as a scholarship engine. But Smile Foundation’s field learning points to a different North Star: reduce the reasons families feel they must spend. A scholarship helps one bill; a stronger elementary experience lowers many bills for years.
Across its Mission Educationhttps://www.smilefoundationindia.org/education/ and allied programmes, Smile focuses on:
- Early-grade mastery (reading and number sense) that prevents costly remediation later.
- Mother-tongue, activity-based classrooms that keep first-generation learners engaged and reduce reliance on coaching.
- Teacher mentoring inside classrooms because the best “ed-tech” is a confident teacher with the right routines.
- Parent engagement that turns households from passive payers into active learning partners.
- Barrier-aligned micro-support (transport, exam fees, devices) to keep girls in school through transition grades.
- Career exposure and skilling bridges (for older students) so families see the return on schooling and persist through secondary.
Each of these levers is low-cost, scalable and — crucially — evidence-aligned with the way India’s education rupees actually flow.
The equity case: Spend where it bends the curve
If boys attract more spending, then public and CSR rupees must tilt to girls as return-maximising investments. Three principles help:
- Pay for the barrier, not the label.
In a district where distance is the killer, transport stipends for girls will outperform generic fee scholarships. Where language is the barrier, fund bilingual FLN materials and classroom assistants. - Front-load money.
₹1 spent in Grade 2 is worth ₹10 in Grade 10. Put cash, coaching and materials early. - Make funding visible to families.
When parents see their daughter decode a paragraph, commute safely and pass board exams, their own spending follows on books, on continued schooling, on aspirations.
The real “ROI” of school spending
Economists debate rates of return; families care about something simpler: Does my child learn? Does she stay in school? Does he get a fair shot at a job or higher study? By those measures, India’s education rupees will work hardest when three links strengthen together:
- Access (you can get to school),
- Learning (you make real progress there) and
- Momentum (you keep going through the tough transitions).
Data can tell us where the money goes. Only practice — in schools, households and communities — can tell us how to make it go further.
If the CMS:E survey is a mirror, the reflection is clear: families are carrying the system. Let’s carry them back by investing where their burden is heaviest and where each rupee has the biggest multiplier: early learning, safe access, transparent costs and targeted support that keeps girls and first-generation learners in the game.
That is the surest path to making “free” education feel free again.
Sources (select)
- MoSPI (NSO) Press Note: Results of Comprehensive Modular Survey: Education, 2025 (April–June, 2025)—key tables on enrolment by school type; share paying course fees; per-student spending by school type and item; private coaching prevalence; funding sources; comparability caveats.
- Times of India summary of CMS:E gender gap in household education spending (boys higher than girls; with rural–urban splits and coaching differentials). (The Times of India)
- Careers360 recap of CMS:E boys’ greater presence in private schools/coaching and higher per-student spending. (Careers360)
- ThePrint on state-level expenditure contrasts (highest vs. lowest). (ThePrint)
- ASER 2022 national findings on foundational learning (Grade-3 reading at 20.5% in rural India). (ASER Centre)
- NIPUN Bharat / NEP 2020 goal: universal FLN by 2026–27. (Press Information Bureau, Department of School Education)
- UDISE+ 2024–25 press updates on reduced dropouts and better retention (national). (Press Information Bureau, www.ndtv.com)
