25 Crore Students, But Fewer Than 6 in 10 Finish School: What Economic Survey 2025-26 Says on Education

Economic Survey 2025-26 highlights sharp dropouts after Class 8, with only 58% students reaching higher secondary level. Report flags skilling gaps, higher education quality concerns and need for NEP reforms.

India has one of world’s largest education systems with 24.69 crore students enrolled across nearly 14.71 lakh schools, but fewer than six out of ten students continue till higher secondary education, Economic Survey 2025-26 has revealed. Presented in Parliament today, Survey flags sharp dropouts after Class 8, weak skilling outcomes and quality gaps in higher education as major challenges that could slow India’s human capital growth.

Annual economic review, prepared by Ministry of Finance places education at centre of India’s long term development strategy, while warning that enrolment gains are not translating into sustained retention, employability or productivity. 

Economic Survey 2025–26: 10 Education Takeaways

• India has 24.69 crore students enrolled across 14.71 lakh schools, among largest systems globally.
• Only 58.4% students reach higher secondary (Class 11–12) despite over 90% enrolment at primary levels.
• Student dropouts after Class 8 remain a major concern, especially in rural areas.
• Limited access to secondary and higher secondary schools affects retention beyond middle school.
• India now has over 70,000 higher education institutions, up sharply from a decade ago.
• Expansion of colleges and universities has not fully translated into better quality or employability.
• NEP 2020 reforms such as flexible entry-exit and Academic Bank of Credits are gaining traction.
• A large skilling gap persists, with most students finishing school without formal vocational training.
• Survey calls for stronger integration of skilling with mainstream education and industry partnerships.
• Internationalisation of higher education is seen as key to retaining Indian talent and attracting global students.

School Education: High Enrolment, Steep Fall After Middle School

According to Survey, Gross Enrolment Ratios (GER) remain strong at early stages of schooling, standing at 90.9% at primary level and 90.3% at upper primary. However, participation drops sharply thereafter, with GER declining to 78.7% at secondary level and further to 58.4% at higher secondary (Classes 11–12).

Survey identifies dropouts after Class 8 as a structural concern, particularly in rural and semi-urban areas. One important reason cited is limited availability of secondary and higher secondary schools, forcing students to travel longer distances or exit education system altogether.

Improving student retention beyond middle school, expanding access to secondary education and addressing regional disparities are flagged as priorities to strengthen learning outcomes and workforce participation.

Higher Education Expands, But Quality Remains a Challenge

The Economic Survey notes that India’s higher education ecosystem has expanded significantly, with the number of institutions rising from about 51,500 in 2014–15 to over 70,000 by June 2025. This expansion has helped widen access, but Survey warns that capacity growth must be matched with improvements in quality, relevance and employability.

Under National Education Policy 2020, several reforms are highlighted as steps in this direction. These include flexible entry and exit options, rollout of the Academic Bank of Credits (ABC) to allow credit portability and implementation of National Credit Framework to integrate academic, vocational and experiential learning.

Survey reiterates national goal of increasing higher education GER to 50% by 2035, while underlining need for stronger quality assurance, faculty development and outcome based evaluation.

Skilling Gap: Education Not Translating Into Job Readiness

An important concern raised in Survey is lack of formal skilling exposure among students, even after completing years of schooling. It points out that a large majority of adolescents finish school without any structured vocational or technical training, contributing to low employability and skill mismatches.

It argues that skilling should be embedded within the formal education system, rather than treated as a parallel or post-education pathway. Strengthening industry linkages, apprenticeships and vocational integration is seen as essential to make education outcomes more aligned with labour market needs.

Push for Internationalisation of Higher Education

Economic Survey also highlights internationalisation of education as a strategic priority to retain Indian students who go abroad and attract foreign learners to Indian campuses. Measures such as enabling foreign university campuses, mutual recognition of qualifications and regulatory reforms to support cross-border academic collaboration are cited as steps toward making India a global education hub.

it states that improving campus infrastructure, student services and research collaboration is expected to play major role in enhancing India’s global competitiveness in higher education. It says country must now shift to retention, quality, skills and outcomes especially at secondary and higher education levels.