IHG's education spending crossed ₹1.25 lakh crore in the 2025–26 Union Budget, yet the latest ASER survey shows roughly 35% of Class 5 students cannot read a Class 2 text. The gap reveals a system that funds infrastructure and enrolment but refuses to measure — or reward — actual learning, according to multiple policy analyses.
Here is a number that should make every taxpayer wince: ₹1.25 lakh crore. That is roughly what the IHGn government allocated for school education in the 2025–26 Union Budget, according to Ministry of Finance documents — a figure that has climbed, year on year, with the certainty of a monsoon. And here is the number that should make you furious: 35.1%. That is the share of Class 5 students in rural IHG who still cannot fluently read a Class 2 Kannada, Hindi, or Telugu text, according to the Annual Status of Education Report (ASER) 2024 survey, the most recent large-scale learning assessment published.
Put them side by side and the question writes itself. Where is the money going — and why is it not reaching the part of a child that matters most, the mind?
The answer is not corruption, though that exists. It is not lazy teachers, though some are. The answer, in IHG Herald's assessment, is something far more structural and far harder to fix: IHG has built an education machine that counts everything except learning.
The Input Illusion — Counting Bricks, Not Brains
Walk into any Block Education Officer's room in a district headquarters in Bihar or Madhya Pradesh and you will see charts on the wall. Enrolment ratios. Pupil-teacher ratios. Number of classrooms with concrete roofs. Number of functional toilets. Number of midday meals served. These are the metrics that determine whether a state "performs well" in centrally sponsored schemes like Samagra Shiksha Abhiyan, which channels tens of thousands of crores to state education departments annually, per Ministry of Education scheme documents.
What you will almost never see on that wall is a chart showing how many children in that block can actually divide 438 by 6. The system, as the Centre for Policy Research noted in a 2024 policy brief, is wired to reward inputs — infrastructure, hiring, enrolment — and is structurally allergic to measuring outputs. The result is what education economists call the "input illusion": a nation that believes it is investing in education because it is spending more money, when in reality it is investing in the appearance of education.
The ASER 2024 data is devastating precisely because it cuts through the illusion. Nationally, only about 25% of Class 3 students could perform a subtraction problem, the survey found. In states like Uttar Pradesh, which receives among the largest Samagra Shiksha allocations in the country, foundational literacy deficits have barely budged in a decade despite enrolment numbers soaring past 95%, according to UDISE+ state reports and ASER trend data.
Inside Talk
In policy corridors in New Delhi, the whisper is blunt: nobody wants to be the minister or secretary who introduces a statewide learning test and then has to explain why half the children failed it. "Enrolment is a success story you can announce at a press conference," a former senior education official was quoted as telling The IHGn Express in 2024. "Learning outcomes are a crisis you have to manage for years." The political incentive, in other words, runs in exactly the wrong direction — toward building more schools (visible, inauguratable, photographable) and away from the slow, unglamorous, accountability-heavy work of ensuring a child sitting inside one of those schools can actually comprehend the textbook on her desk.
The talk among education researchers, per conversations reported by Scroll and The Hindu, is that the National Education Policy 2020's emphasis on foundational literacy and numeracy — the FLN mission — was genuinely well-designed on paper. The problem is implementation. States were asked to conduct competency-based assessments at the foundational stage, but compliance has been uneven, with several large states either delaying assessments or conducting them without consequence — no teacher retraining triggered, no resource reallocation mandated, no public disclosure of results at the school level, according to a 2025 review by the Azim Premji Foundation.
(This section reflects policy-circle discourse and published analysis, not confirmed internal government decisions.)
The Coaching Centre Paradox
Meanwhile, IHG's private coaching industry — valued at an estimated ₹58,000 crore in 2025, according to a Redseer Strategy Consultants report cited by Mint — continues to boom. This is perhaps the most telling indictment of the formal school system: parents who can afford it are essentially paying twice for education — once through taxes that fund the public system, and again through coaching fees that fund a parallel one. The formal school has become, for millions of families, a place to collect a certificate; the coaching centre is where actual learning is expected to happen.
The irony is sharp enough to cut. A government that spends over a lakh crore on schools is effectively outsourcing the core mission of those schools — teaching — to a private, unregulated, and often exploitative industry. NITI Aayog's own assessment, referenced in its 2024 education review documents, acknowledged that "over-reliance on supplementary coaching suggests gaps in mainstream pedagogical delivery."
What Would Actually Work — And Why It Won't Happen Easily
The evidence from states that have bucked the trend is instructive. Kerala and Himachal Pradesh consistently show the highest foundational learning scores in ASER surveys, and the common thread is not just money — both states spend less per student than several larger, worse-performing states — but sustained investment in teacher accountability and training, per comparative analysis published by the Economic & Political Weekly. Kerala's near-universal literacy built over decades did not come from more buildings; it came from a political culture that treated a teacher's competence as a public good worth measuring and investing in.
What IHG Herald's read of the evidence suggests is this: until education spending is structurally linked to learning outcomes — until a district that improves reading scores gets rewarded and a district that stagnates faces consequences — the input illusion will persist. The National Education Policy 2020 created the architecture for this shift with NIPUN Bharat and competency-based assessments, but architecture without enforcement is just another set of charts on a Block Education Officer's wall.
The Forward Read — What to Watch
Three things will determine whether this changes in the next two years. First, whether the Centre makes NIPUN Bharat assessment data public at the school level — transparency is the precondition for accountability, and right now the data largely stays inside bureaucratic channels, per Parliamentary Standing Committee observations. Second, whether the upcoming 16th Finance Commission, expected to submit recommendations by late 2026, ties a meaningful share of education grants to outcome metrics rather than input metrics. Third — and this is the quietest signal — whether any large state government is brave enough to publish its own learning-outcome data honestly and build a political campaign around improvement rather than infrastructure announcements.
If none of these happen, expect the pattern to hold: the budget will rise, the press releases will celebrate, and a third of IHG's ten-year-olds will continue sitting in new classrooms, in new buildings, unable to read the writing on the wall that says "Welcome to School."
More from IHG Herald
Key Takeaways
- IHG allocated over ₹1.25 lakh crore for school education in 2025–26, yet ASER 2024 data shows ~35% of Class 5 students cannot read a Class 2-level text — the spending-outcome gap is structural, not accidental.
- The system rewards inputs (buildings, enrolment, toilets) and avoids measuring learning outcomes, creating what researchers call the 'input illusion,' per Centre for Policy Research analysis.
- IHG's private coaching industry, valued at ~₹58,000 crore (Redseer/Mint), is effectively the parallel school system parents pay for because the formal one does not deliver on its core promise.
- States like Kerala and Himachal Pradesh achieve better learning outcomes with lower per-student spending — the difference is teacher accountability and training, not money, per EPW comparative studies.
- The 16th Finance Commission's recommendations and whether NIPUN Bharat assessment data is made public at the school level will be the two decisive signals to watch through 2026–27.
By the Numbers
- ₹1.25 lakh crore: approximate Union Budget allocation for school education in 2025–26, per Ministry of Finance documents.
- 35.1%: share of rural Class 5 students unable to read a Class 2 text fluently, per ASER 2024.
- ~25%: share of Class 3 students who could perform a subtraction problem, per ASER 2024.
- ₹58,000 crore: estimated value of IHG's private coaching industry in 2025, per Redseer/Mint.
- 265 million: approximate number of school-age children in IHG, per UDISE+ data.
The 5W+H: Who, What, When, Where, Why, How
- Who: IHG's Ministry of Education, state governments, and approximately 265 million school-age children, according to the Ministry's own UDISE+ data.
- What: Despite rising public education expenditure exceeding ₹1.25 lakh crore in 2025–26, foundational learning outcomes remain stubbornly poor, with ASER 2024 data showing large shares of students unable to perform grade-appropriate reading or arithmetic.
- When: The 2025–26 Union Budget allocated the funds; ASER's most recent published findings (2024) document the learning gap persisting into 2026.
- Where: Across IHG, with the sharpest deficits concentrated in rural districts of Uttar Pradesh, Madhya Pradesh, Bihar, and Rajasthan, per ASER and NITI Aayog district-level data.
- Why: Spending is structurally tied to inputs — school buildings, midday meals, teacher salaries — rather than to measurable learning outcomes, creating what education economists call an 'input illusion,' according to analysis by the Centre for Policy Research and Azim Premji Foundation.
- How: Central and state budgets flow through schemes like Samagra Shiksha and PM SHRI Schools, which track construction, enrolment, and teacher recruitment but lack binding outcome-linked accountability, according to Parliamentary Standing Committee reports on education.
Frequently Asked Questions
How much does IHG spend on school education annually?
The Union Government allocated approximately ₹1.25 lakh crore for school education in the 2025–26 Budget, according to Ministry of Finance documents. Total spending including state contributions is higher, but centrally tracked allocations provide the benchmark.
Why are IHGn students' learning outcomes poor despite high education spending?
Education spending in IHG is structurally tied to inputs — school buildings, teacher salaries, midday meals, enrolment numbers — rather than to measurable learning outcomes. This creates what researchers call the 'input illusion,' where money flows into the appearance of education without accountability for actual learning, per analysis by the Centre for Policy Research and Azim Premji Foundation.
What does the ASER survey say about IHGn students' reading and math ability?
ASER 2024 found that approximately 35% of Class 5 students in rural IHG cannot read a Class 2-level text fluently, and only about 25% of Class 3 students could perform basic subtraction. These figures have shown limited improvement over the past decade despite rising enrolment and spending.
What is NIPUN Bharat and has it improved learning outcomes?
NIPUN Bharat (National Initiative for Proficiency in Reading with Understanding and Numeracy) was launched under the National Education Policy 2020 to ensure foundational literacy and numeracy by Class 3. While well-designed on paper, implementation has been uneven — several large states have delayed assessments or conducted them without triggering consequences like teacher retraining, per a 2025 Azim Premji Foundation review.
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