Breaking Down Barriers: Zoho CEO Sridhar Vembu's Take on the Rising Costs of Education in India
Image: Indian Education
Image Courtesy: Deccan Chronicle
The escalating cost of education in India is becoming a significant burden for families, especially in urban areas.
Sridhar Vembu, CEO and Founder of Zoho, has highlighted the alarming connection between skyrocketing real estate prices and the increasing unaffordability of education, healthcare, and housing.
In this blog, we will explore Vembu's concerns, delve into the underlying issues driving up education costs, and discuss potential solutions to make education more accessible.
Introduction
Education in India is increasingly becoming a luxury rather than a basic right. Sridhar Vembu, CEO and Founder of Zoho, recently took to the social media platform X to voice his concerns about the rising costs of education, linking it to the exorbitant real estate prices in both urban and small-town areas.
Vembu argues that the surge in real estate prices, fueled by corruption and speculative investments, is making education, healthcare, and housing unaffordable for the average Indian.
The Rising Cost of Education
The cost of education in India has been on a steady rise. Between 2012 and 2020, education expenses have surged by approximately 10-12% annually. This increase encompasses tuition fees, transportation, and examination fees.
In urban areas, the situation is particularly dire. The rising cost of real estate significantly impacts the expenses for educational institutions.
Schools and colleges often transfer these increased costs to students through higher tuition fees, making quality education a distant dream for many.
The Real Estate Connection
According to Vembu, the root cause of this crisis lies in the inflated real estate prices. He notes,
"Education has become increasingly unaffordable. A good part of it is due to urban real estate (and even real estate around small towns) becoming extremely expensive; that affects education, health care and of course, housing and retail as well."
Image: Sridhar Vembu, CEO and Founder of Zoho
Image Courtesy: Inshorts
Vembu further elaborates on how corruption exacerbates the situation:
"A lot of corruption money from politics is 'parked' in real estate and that has inflated prices beyond normal market forces. In a sense, all of us pay for political corruption in the form of expensive housing, schools, and health care."
The Cost of Schooling
Vembu's concerns are not merely theoretical. He referred to a real-world example on X, where a user shared the term-wise split of fees for a school year.
The breakdown included a non-refundable registration fee of Rs 10,000, an annual fee of Rs 25,000, and Rs 98,750 for each of the four three-month terms, totaling an exorbitant amount for a single academic year.
In response to these high costs, Vembu mentions Zoho's initiative to invest in school education to make it more affordable.
However, he notes that their efforts are concentrated in rural areas where land is more affordable, stating,
"We are investing in school education to make it affordable (our schools are free) but we can only do it in deep rural areas where land is affordable."
The Broader Impact of High Real Estate Prices
The link between real estate prices and education costs is just one part of a broader economic issue.
As Vembu points out, inflated real estate prices also drive up the costs of healthcare, housing, and retail, placing a heavy financial burden on the general population.
This situation is further exacerbated by the practice of parking corruption money in real estate, which inflates prices beyond what market forces would dictate.
Public vs. Private Expenditure on Education
While public expenditure on education has remained relatively stable, around 3.9% of GDP in 2018-19, private spending has surged, reflecting the growing privatization of education in India. Combined, public and private spending on education accounted for 6.6% of GDP in 2018-19.
Despite periodic increases in the education budget, such as the ₹1.48 lakh crore allocated in the 2024 budget, affordability remains a significant challenge.
This is especially true for families in urban areas where the cost of living, including education, is considerably higher.