Economics Of Private Schooling Industry In Kohima: A Study

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 one’s children, degenerating quality of education in government-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 all these have contributed to the viability of this industry. In Kohima, the capital city of Nagaland (India), which is our study area, there are 31 private high/higher secondary schools against only three government-run schools. These private schools enroll some 25,000 pupils while the enrolment in the government-run schools is barely 1,600 students. These private schools employ 766 teachers and pay them an average salary which is only one-third of what the government-run schools pay. According to the ILO (1996) definition of subsistence wages (the hourly wage sufficient to buy 1 kg. of the lowest priced staple cereal), the employees of these schools barely earn a subsistence wage. Nevertheless, these schools generate a revenue of Rs. 88 mn, out of which Rs. 3.7 mn 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.