Home Education The drive for private school is becoming increasingly unattainable as inflation bites

The drive for private school is becoming increasingly unattainable as inflation bites

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Manoj Kumar: Indian financial adviser Wakar Khan has noted that his profits have fallen by about a fifth since the start of the coronavirus pandemic. When his youngest son’s private school raised his fee by 10% this year, he had no choice but to transfer him to the state system.

Having three children and living in a small house in the New Delhi capital, the 45-year-old man can no longer afford to pay for a private school for his 10-year-old boy. He transferred the eldest boy to public school in early 2021.

“I had no choice,” Khan told Reuters, adding that he was rising expenditures were compared to the growth of household expenditures by almost 25% over the past two years.

While inflation places the heaviest burden on the poorest, the relatively wealthy are under pressure to cut household budgets that have not been observed for years.

Khan is among the millions of parents who transferred their children from private to public from 2020, or from the elite to cheaper. In 2021, four million children moved from private to public, which is more than 4% of all children in school.

This has reversed the trend that has swept India over the past two decades as more families in an increasingly affluent society choose private give their children an edge in the job market.

But now inflation means that for some such aspirations are becoming unbearable.

“My family life is ruined. I often feel upset and helpless because I can’t give a good education to my children, despite all the hard work, ”Khan said.

His daughter, a 12th grader, is still studying at the school where his 10-year-old studied because he did not find a place for her in the state system.

For the fast-growing middle class, the appeal of English lessons and better teaching is enormous.

The private sector covers a number and fees, from a few dollars a month to hundreds, and therefore caters to low- and middle-income families as well as the wealthy.

In addition to fees, transportation companies that transport children to school this month have raised prices by more than 15% in Delhi and some other places to cover higher wages and fuel, the parents ’association said.

Arjun Singh, 47, who drives a school van and owns three school fees, said he increased his fees to 35% in April due to higher costs. Compressed natural gas (LNG) prices for his cars have almost doubled, he said.

Broad inflation is biting hard, reaching 6.95% in March – a 17-month high and above the central bank’s target, and economists say households are preparing for the worst as companies incur costs.

“UNSUFFICIENT CONSEQUENCES”

Many are private this year increased fees and other fees by more than 15%, said Aparahita Gautam, president of the Delhi Parents Association, although some postponed it during the worst pandemic.

Her association protested against a number in the capital, attracting the attention of the media and the authorities.

In response, the Delhi government has simplified the enrollment process in public schools and promised to audit school bills while trying to encourage schools to increase fees by 10%, but to no avail.

“Most forcing parents to agree to steep hikes or face adverse consequences, ”Gautam said.

In the city of Calcutta almost 70% of last month raised fees to 20%, and some parents asked authorities to put pressure on schools to soften the blow.

Schools advocate higher fees.

Sudha Acarya, head of the National Conference of Progressive Schools and director of the ITL Public School, understood that many parents are going through hard times, but schools are facing rising costs.

“Without raising school fees again, maintaining quality is a bit difficult,” she said.

The Delhi-based Center Square Foundation, a 2021 study, found that most of India’s 450,000 private schools, 70% of which charged up to Rs 1,000 ($ 13) a month per student, faced financial losses of 20%. 50% during a pandemic.

According to school associations and state authorities, as a result of parental default, some schools have reduced teachers’ salaries and thousands of schools, especially those serving low-income families, have closed.

Tuition in private schools has risen sharply to more than 35% of students from about 9% in 1993, and nearly 50% of households spend nearly 20% of their salaries on educating children, according to government and industry estimates.

A family with a monthly income of 20,000-5,000 rupees ($ 260-650) can pay 2,000-1,000 rupees a month for tuition and another 1,500-5,000 rupees for transportation.

ROLLER TRAP

In total, about 90 million Indian children are enrolled in private schools.

Federal and state governments spent 6.43 trillion rupees ($ 84 billion) to fund about 1.1 million schools in 2019/2020, or about 3.1% of gross domestic product against 6% recommended by various government groups.

Economists said the rise in private tuition spending has not been fully taken into account in inflation data, as it is only 4.5% in the consumer price index based on a decade-old model.

Devendra Pant, chief economist at India Ratings, India’s division agency Fitch, said rising spending on education is part of a second wave of inflation that households have faced after rising world prices for crude oil and other commodities.

“This will significantly affect the monthly budget of households and may force many to cut spending on other products and services.”

Some parents have fallen into a nightmarish debt trap that could deprive their children of education altogether.

Sanjay Kumar Vagel, a driver in the city of Ahmedabad who had to borrow money after losing his job, said he could not afford to pay higher fees for his daughter as well as clear the 18,000 rupees he still owes her school.

The school asked him to pay outstanding fees before issuing a transfer certificate, without which no public school was ready to accept his daughter, he said.

“My daughter may be uneducated forever because I don’t have the means to pay,” he said.

(1 dollar = 76.4830 Indian rupees)

(Additional reports by Sumit Khan in Ahmedabad, Rupak De Chowdhury in Kolkata, Matchmaker Bhat in Mumbai; edited by Mike Collet-White and Robert Birsel)

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is generated automatically from the syndicated tape.)

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