MUMBAI: Education may be
priceless, but the promise of a degree has seen parents across India foot large
bills. Those from the rural and urban pockets of southern states spend the
most, largely sign up at a private university and finance their children's
dream of a technical education. On average, higher
educationaccounts for 15.3% of the total household expenditure in
rural and 18.4% in urban areas. In the south, the corresponding figures are 43%
The data is part of a recent study titled 'Household Expenditure on Higher
Education in India: What do we know and what does recent data have to say'. In
absolute terms, families from urban parts of south India spend an average of Rs
49,690 a year on higher education, closely followed by the western states,
where it is Rs 45,436. In rural areas, the southern states have an average
per-student expenditure of Rs. 36,063, which makes up a whopping 43% of their
annual household expenditure. This is followed by the northern states, where
the annual average expense is Rs 25,143 (see box).
"For the average citizen, higher education does not come cheap. Most
families spend a third of their consumption expenditure, expecting a better
return on their investment," said S Chandrasekhar, professor, Indira
Gandhi Institute of Development Research, Mumbai, and one of the authors of the
study. The other co-authors of the study are P Geetha Rani of Central
University of Tamil Nadu,
Thiruvarur, and Soham Sahoo of University of Goettingen, Germany.
The spend is the lowest — 23% of the household expenditure or Rs 29,249 — in
urban parts of north-east India and merely 16% or Rs 11,873 in central rural India.
"When there is uncertainty in the employment prospect, the opportunity
cost of pursuing higher education is larger for poorer households, which
potentially explains the disparity in demand for higher education across wealth
levels," stated the paper.
The National Sample Survey Organisation (NSSO) survey of consumption
expenditure, typically conducted once in five years, provides estimates of
expenditure for the household as a whole and not for each member of the
household who is pursuing higher education.
First, the average income in rural India is not sufficient to finance quality
higher education, the authors noted.
from the Socio Economic and Caste Census 2011, in nearly 73% of households, the
maximum income earned by any member is less than Rs 5,000 per month. Second, an
average rural household spends 27% of its total expenditure if any one wants to
pursue higher education. "Since poorer households have lower income, this
share is likely to be higher for poorer households. This provides support for
the policy stance that financial assistance schemes need to be targeted by
income slabs," said the research.