(Co-authored with Nikhil Rahangdale)

India has a strange problem in its school system where almost every child starts primary school, but a large number of them never finish high school. UDISE+ 2024–25 shows that while India enrolls 246.9 million students, only 64.8 million reach secondary grades. Dropout rates rise from 3.5% in middle school to 8.2% at secondary, and retention rate drop to 47.2% compared to 82.8% at upper primary, implying that over half of enrolled children never complete secondary education. In 2024–25 alone, 6.8 million students exited the system, including roughly 3.2 million girls, of whom an estimated 1.8–2 million dropped out at the secondary stage. This is not just because students do not want to learn; it is mostly a problem of not having enough schools. Only 21 percent of the 1.47 million schools in the country even offer high school grades, which leaves many rural areas with no place for kids to go after Grade 8. Among those left behind are 13.4 million girls whose education is often cut short by socio-economic pressures or early marriage. If we do not fix this now, it will be very hard to reach the national goal of having every child in school by 2030. From an economic standpoint, these out-of-school youth are not gaining the skills they need to work or help the economy grow. Many of them, especially women, fall into a category called NEET, which means they are not in school, not working, and not training for a job. This is a huge waste of potential for a country with such a large young population.

The failure of rural secondary education is a supply-side problem. The current full-day school model is capital- and teacher-intensive to reach most villages, and not viable for a large number of girls, first-generation learners, and youth engaged in informal or unpaid work, for whom regular school attendance is structurally infeasible due to domestic responsibilities, early labour market entry, and migration.. State Open Schooling works differently; it uses existing primary schools and village offices as local centres during evenings or weekends. While the state manages the curriculum and degrees from a central office, these local points provide the mentoring and exams needed for success. This flexibility is essential for the girls and youth who must work or help at home, making daily attendance impossible. By separating learning from daily physical presence, the system creates a low-cost path to lifelong learning better jobs and higher skills. Evidence from Rajasthan’s 983 centres and Chhattisgarh’s panchayat-level network shows that this model is effective precisely where formal schools fail, delivering secondary qualifications at a fraction of the per-learner cost.

The main organization meant to help these students, the National Institute of Open Schooling (NIOS), has a limited success. Though NIOS was aimed at giving affordable access to the dropouts across the nation (both rural and urban), NIOS access limited to urban centers and has turned into a business that focuses on making money. Since the government stopped giving any direct budget support after 2011-12, the organization has had to pay for itself. This means it now passes all its costs on to the students who have the least money. As per the annual reports of NIOS, the NIOS earned about 188.45 crore rupees in 2021-22 from student fees but spent only 30.84 crore rupees on things that actually help students learn, like books and classes. This is the behavior of a profit-seeking company, not a public service. The organization spends twice as much on its own staff pay and benefits, about 65.77 crore rupees, as it does on teaching. Instead of using its extra money to make fees lower for poor students, accumulating a massive corpus fund of nearly ₹798.65 Crores. This has made the cost of learning much higher than it should be. This high-cost model works better for people in cities but pushes away the poor and rural students who need help the most. This is visible clearly from the enrollment numbers of the NIOS. Expecting open schools to make a profit or even just break-even is a mistake that keeps students out.

If open schooling is to truly serve as a second-chance and lifelong learning platform, as envisioned under NEP 2020, it must be supported as a public good rather than treated as a market-driven service. Sustainable financing models should therefore prioritise public investment, cross-subsidization, and government-backed support mechanisms, rather than placing the financial burden on learners who are already at the margins. Reframing open schools as a social infrastructure for inclusion, rather than a revenue-generating institution, is essential to realising their transformative potential. They should be a flexible way for people to learn whenever they can. This shift is necessary to help migrants, youth informal workers, and women who missed their first chance at school. If we make open schooling a respected choice that fits into people's lives, we can help millions of adults and youth get into the better workforce with skills. One way to do this is to move away from one big central institute and instead help states build their own strong systems. State-run open schools are effective to teach in local languages and use local networks to find students. Right now, many state systems are weak, do not have enough staff, and lack good technology. Each state should set up its own State Open Schooling Authority (SOSA). These state groups would follow national rules to make sure their certificates are just as good as regular school boards for getting into college or finding a job. A state content hub could create high-quality lessons, but the actual teaching would happen in local centers.

Modernizing this delivery mechanism involves more than just physical presence; it requires a digital and curricular adaptation. A dedicated IT structure, including a Management Information System (MIS) linked to UDISE+ and capable of dropout prediction, is essential and carries an estimated setup cost of ₹7-12 crore. The curriculum must be modular and needs-based, ensuring at least 30% vocational content aligned with the National Skills Qualification Framework (NSQF) while allowing up to 50% Recognition of Prior Learning (RPL) credits. Lessons from successful state-led initiatives should be scaled, such as Telangana’s use of mass media (T-SAT) for instruction and Maharashtra’s peer tutoring models for hybrid contact classes. Furthermore, ensuring that open schools are brought under the School Standards Setting Authority and Frameworks like PARAKH will guarantee the comparability of learning outcomes, thereby enhancing the market credibility of these qualifications.

The financial expansion of this network does not necessarily require massive new fiscal outlays but rather the intelligent convergence of existing resources. Currently, funds allocated under the Samagra Shiksha Abhiyan for Open and Distance Learning (ODL), specifically a recurring grant of up to ₹2,000 per child, remain largely underutilized due to provisions. Policy must mandate that these funds are strictly ring-fenced for State Open Schools to serve out-of-school children identified via the PRABANDH portal. Fiscal sustainability can further be achieved through a hybrid funding model, where exam fees and retention support for girls are offset by reappropriating funds from existing schemes such as the Scheme for Adolescent Girls and Beti Bachao Beti Padhao. Practical training can be made cheaper by using existing vocational centers and skill programs instead of building new ones. A sustainable plan would involve subsidies from central schemes, matching state grants, and money from private companies through their social spending. Projections suggest that for every 1 lakh learners per state, the required investment involves ₹40-60 crore for one-time infrastructure and ₹60-80 crore for recurring annual costs. This total investment is a very small price to pay for the economic gain of having millions of more educated workers.

Transitioning from a revenue-driven centralized model to a decentralized, service-oriented state model is the sustainable pathway for reintegrating India’s out-of-school adolescents. Investing in open schooling is not only a social obligation but a high-return fiscal intervention that addresses the NEET (Not in Education, Employment, or Training) youth and gender gaps in workforce participation. By repositioning these institutions as choices for lifelong learning rather than remedies for failure, India can secure its demographic dividend and ensure that its growth is inclusive and equitable. This open schooling system is an essential prerequisite for India's 2030 educational and economic ambitions.

To strengthen Open Schooling, recommendations include establishing autonomous State Open Schooling Authorities (SOSA) to lead a decentralized, hybrid delivery model utilizing Secondary schools, Panchayat-level centers and digital infrastructure like DIKSHA. Financially, states should allocate 1 to 3% of department of school education budgets and minor part of other central and state scheme meant for adolescents to provide complete fee waivers for women and disadvantaged groups, implement Direct Benefit Transfers for learning support, and utilize braided funding from central schemes like Beti Bachao Beti Padhao. Curriculum modernization should integrate 30% vocational content and Recognition of Prior Learning (RPL) credits to reposition Open Schools as a lifelong learning opportunity. This requires a time-bound strengthening of State Open Schools by July 2026 in high-NEET (Not in Education, Employment, or Training) burden states to reintegrate out-of-school adolescents.