New Delhi: As the Ministry of Education prepares to strengthen the open schooling framework through the National Institute of Open Schooling (NIOS), as part of a nationwide effort to bring out-of-school children back into the education system, concerns have emerged over the institution’s finances and functioning.
A recent working paper by the National Institute of Public Finance and Policy (NIPFP), a finance ministry think tank, highlights that NIOS has not received government budget support since 2012–13. Instead, it operates largely as a self-financing body, relying heavily on student fees, the paper notes.
It further mentions that while NIOS has accumulated significant surpluses, its spending pattern raises questions. “In 2021–22, the institute generated about ₹188 crore in academic receipts and recorded a surplus of over ₹127 crore, with total reserves nearing ₹800 crore. However, expenditure on staff ( ₹65.8 crore) was more than double the spending on student academic needs ( ₹30.8 crore),” the report says.
Experts argue that the concern is not the surplus itself, but how it is used, especially when student outcomes remain modest. In 2024, pass rates stood at 60.14% for Class 10 and 62.39% for Class 12, among the lowest across school boards, according to the government data.
“NIOS operates with a financial efficiency that mirrors a profit-making corporation rather than a non-profit educational board,” the paper published on February 18 states.
Titled “Strengthening State Open Schools: A Need for a Dedicated and Focused Policy for School Dropouts”, the study was authored by HK Amar Nath of NIPFP and Nikhil Rahangdale of the Indian Institute of Foreign Trade. It forms part of a broader study commissioned by Ramon Magsaysay Award winner NGO ‘Educate Girls’.
The findings come against the backdrop of the National Education Policy (NEP) 2020, which aims for 100% enrolment from pre-school to secondary level by 2030. However, data from the Periodic Labour Force Survey (PLFS) 2023–24 shows nearly two crore children aged 14–18 remain out of school, while over 50 lakh students fail board exams annually.
The education ministry has described open schooling as a “practical alternative” for children unable to attend regular schools due to economic or social constraints.
Yet, the NIPFP report points to deeper structural challenges. Only 9.7% of India’s 1.47 million schools offer secondary-level education, creating what researchers call a “structural break” where student enrolment drops sharply after upper primary.
NIOS currently serves around 27 lakh learners and has recorded over 41 lakh enrolments in the past five years through more than 10,800 study and exam centres. However, staffing shortages persist, with 139 vacancies out of 394 sanctioned posts, according to Parliament data.
Nath said the paper’s objective was not to criticise NIOS but to highlight financing gaps.
“NIOS is a registered society and supposed to be a non-profit institution. But from around 2012–13 onwards it has not been receiving government funding, even for revenue expenditure,” he said. “These open schools should not depend entirely on government funding, but they should also not be purely fee-dependent.”
The study proposes directing even 2–3% of total education spending towards out-of-school adolescents to strengthen the system. Currently, the Centre provides ₹2,000 per annum for out-of-school children of age group of 16-19 years, belonging to socio economically disadvantaged groups.
“NIOS is a public institution, not meant to generate profit. The key question is whether the funds are being used to support students,” said educationist Anita Rampal.
On the ground, operational issues persist. Administrators at study centres report irregular payments and reduced teaching support. A principal at a Delhi-based NIOS centre said classes, once conducted throughout the year, are now limited to a month before exams due to delayed payments.
For many students, NIOS remains a crucial alternative. “I am enrolled in a photography and video editing institute. I wanted to do regular schooling along with it but my financial situation did not allow me to do so,” said a Class 12 student at a Delhi centre. “NIOS costs me around ₹9,000 a year, including exam fees.”
Rampal said weakening academic support undermines the purpose of open schooling. “If students have absolutely no one to help them and are simply uploading assignments, it becomes tokenism,” she said, adding that open schooling “cannot become an alternative method of schooling in place of proper schools.”
NIOS and Education ministry officials did not respond to HT’s queries for comments.
