Indians are spending enormously on education even with few jobs in sight

• As per CARE rating agency, the unemployment rate in India may increase further as a high proportion of students enroll in engineering, vocational and information technology courses.
  
• Per student, the average expenditure on education in India is ₹8,331.
  
• According to the report, the average expense for enrolling in a professional course can go as high as ₹72,000 per student.
  
• Of the total expenses incurred on the education of every student, over half of the amount is spent on tuition and exam fees — and that excludes course material, books and uniform.

India is one of the world’s largest economies which is also home to the youngest population.

Most of these youngsters are pursuing higher studies and spending more on education. That could be a boon and a curse both as it will increase the already high unemployment rate, says a report by CARE agency.

In the last decade, the expenses on general education that includes primary to post graduate courses increased fourfold to ₹8,331 per student per annum. The cost for professional courses went up by nearly 52%.


India's economic growth has been weakening for five straight quarters and is at a six-year low. The sliding economic growth does not bode well for employment opportunities but the cost of education is constantly rising.

Engineering Employment declines on a monthly basis

The unemployment rate in October stood at 8.5% — the highest in three years. According to a recent survey by trade body of IT and staffing TechServe Alliance, engineering employment is declining on a month-on-month basis. It fell by 0.18% in October compared to September for total employment of near 2.7 million.

All this while, education is turning costlier in India. The average expenditure for professional course stood at ₹ 64,763 in urban areas — twice that of in rural India at ₹32,137. According to the report, it can go as high as ₹72,000 per student.

The chart below shows a significant rise in expenses as the education level increases. However, the education expenses for technical courses has declined due to higher subsidies, scholarships and growing number of institutes and the resultant competition.


Where are the returns?

But it is yet unknown as to what kind of returns these expenses will provide.

“It is of utmost importance that there is sufficient number of jobs created in these fields. In the absence of such jobs, the unemployment rate would tend to increase as qualified students may not be willing to take up jobs which require lower qualification,” it said.

Meanwhile, spending on general education including postgraduate and certification courses also increased.


The urban and rural divide

Students of general courses however are spending much less, at around ₹5,240 in rural areas. But those in urban areas spent three times more at ₹16,308.

“This could potentially act as a deterrent for economically weaker sections to continue being enrolled in schools. For this, government intervention needs to come in at the right levels for drop outs to reduce,” the report highlighted.

Of the total expenses incurred on the education of every student, over half of the amount is spent on tuition and exam fees — and that excludes course material, books and uniform.


Coaching and travel expenses add on

Students are also having to fork out extra money for travelling and coaching — both make up for 12% each.

“This throws light on the unsatisfactory quality of education provided in school classrooms, leading to greater number of students opting for private coaching. Also, the expenses can be reduced if government provides financial support by providing such essentials at free or subsidised rates to students.”

According to the rating agency, merely one in five students in the urban regions received free education. While over half of the students in the rural areas could benefit from subsidised cost of education.

See also:
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