India’s Comprehensive Modular Survey (CMS) on Education 2026 has laid bare the widening gulf in household spending on schooling, coaching and related costs, revealing that education is increasingly treated as a luxury commodity rather than a universal necessity.
The survey shows that richer households spend disproportionately more on education, with expenditure elasticity pegged at 1.42, meaning a 10 per cent rise in income translates into a 14 per cent increase in education spending. On average, Indian households spend Rs 26,615 annually on school education, coaching and hostel fees, accounting for nearly 13 per cent of total consumption.
Divide in Education Spend
The poorest 10 per cent of households spend around Rs 11,700 a year on education, while the richest 10 per cent spend a staggering Rs 67,200, nearly one-fifth of their total consumption. This disparity underscores the inequitable access to quality learning opportunities.
Government vs Private Schools
Government schools continue to dominate enrolment, accounting for 55.9 per cent of students nationwide — 66 per cent in rural areas compared with just 30 per cent in urban centres. However, private unaided schools now cater to 31.9 per cent of students, with household expenditure in these institutions averaging Rs 25,002 per student annually, compared with Rs 2,863 in government schools.
While only 26.7 per cent of government school students pay fees, the figure rises to 95.7 per cent in private schools, highlighting the heavy financial burden borne by families opting for non-government institutions.
Breakdown of Spending
The survey reveals that school fees are the most income-sensitive component, with elasticity at 3.34, absorbing nearly half of every rupee spent on education. Transport (2.83) and uniforms (2.08) also show high sensitivity to income, while textbooks and stationery (0.86) remain relatively inelastic, reflecting their necessity. Interestingly, hostel charges show a negative elasticity (–0.21), indicating that poorer households spend more, largely due to reliance on tribal and residential schools.
Rise of Private Coaching
Private coaching continues to play a significant role, with 27 per cent of students enrolled — 30.7 per cent in urban areas and 25.5 per cent in rural regions. Costs vary sharply, with urban higher secondary students spending nearly Rs 9,950 annually compared with Rs 4,548 in rural areas.
Policy Implications
The findings raise serious concerns for policymakers. Despite reforms under the National Education Policy (NEP) 2020, household budgets remain skewed towards private fees and coaching, undermining the goal of equitable access. With the NEP aiming for a 50 per cent Gross Enrolment Ratio (GER) in higher education by 2035, affordability and inclusivity must be urgently addressed.