Economics Of Private Schooling Industry In Kohima, Nagaland (India)

The enterprise of running private schools has of late assumed the nature of an industry in India. Ever-increasing population, a race for providing education to ones children, degenerating quality of education in govt.-run schools, unlimited supply of educated youths ready to work at the lowest salary, and the possibilities of earning huge profits for a modest investment together have contributed to the viability of this industry. In Kohima, the capital city of Nagaland (India), there are 31 private high/higher secondary schools against only 3 govt.-run schools. These private schools enroll some 25000 pupils. Enrolment in the govt.- run schools is barely 1600. These private schools employ 766 teachers and pay them an average salary, just 1/3rd of what the govt.-run schools pay. According to the ILO (1996) definition of subsistence wages the employees of these schools barely earn a subsistence wage. Nevertheless, these schools generate a revenue of Rs. 88 million of which Rs. 37 million is the net profit. Our analysis shows that private schooling industry in Kohima operates in a monopolistic competition market - bordering on oligopoly. There is price leadership in determining the fees to be charged by the schools making this industry.