Until now, media attention has been focused on flailing edtech companies—like Unacademy and Byju’s. But now India’s coaching mecca—Kota, Rajasthan—is haemorrhaging students. Wtf is going on?
Remind me about Kota…
The origin story: It all began in the 1980s with VK Bansal—a city resident who became famous for helping kids ace their IIT entrance exams. By the mid-90s, parents were pouring into Kota begging him for admission. Around the same time, the once-thriving industrial hub began to struggle—factories shut down throwing residents out of jobs. As Bansal’s rivals began to set up shop in the city, it reinvented itself as the biggest hub of coaching classes in the country.
The stats: After a brief blip due to the pandemic, Kota came roaring back. Edtech startups like Unacademy and Byju’s that were hailed as ‘Kota killers’ started to fall apart. Now, they too have also set up shop in the city to save their skins. There are more than 300,000 students—spread across 3,500 registered hostels, 1,500 unregistered hostels, 5,000 PGs and over 27 coaching institutes.
The big spend on coaching: Tuition fees for these coaching centres range from Rs 150,000 to Rs 500,000 per year. But there is only one teacher per 125 students in a class. A family that sends its child to a top school—starting at Class VI—will start out paying Rs 73,000 a year By Class XII, they will be shelling out Rs 2.7 lakhs on average.
Key data point to note: Latest official data shows that the average rural family spends nearly Rs 3500 on coaching—which is about 42.7% of their expenditure on education. The numbers for urban areas are Rs 7500 per family—and 34.6% of education-related expenses. Unsurprisingly, they run up huge loans to pay these fees—which has proved a bonanza for fintech startups. What’s interesting: Among the key criteria for loans are the course and the institute.
But, but, but: An IIT-Madras study revealed that 50% of students who got admission into IITs did not go to any coaching school. So there’s that.
Let’s be clear: Coaching in Kota is not a cottage industry:
[Allen Career Institute] has over 1.35 lakh students studying in 23 campuses across New Kota, Baran Road, Naya Nohra and the Landmark City. Outside Kota as well, its might is massive: Presence across 53 cities, over 200 classroom campuses and 350 test centres. In fact, last year, Bodhi Tree—the equally owned joint venture between James Murdoch’s Lupa Systems and former Walt Disney Asia Pacific head Uday Shankar—picked up a 36% stake in Allen for $600 million.
Sounds like a gold rush… So what’s happened?
Let’s start with who is most affected—and then move on to why.
Who’s feeling the pain: Kota. The mecca of coaching centres has seen enrollment drop precipitously over the past year. At the top-ranked Allen Institute, admissions have fallen from 131,000 in 2023 to 81,000 this year.
A cost-slashing spree: Allen has slashed fixed salaries for its staff—including teachers—by 20-40%. Even success stories like PhysicsWallah have witnessed a 15% drop. Its fiercest rival Unacademy has also cut compensation by 20-25%. Its numbers have fallen from 10,000 to 7,000.
Main takeaway: Experts agree this is the beginning of a large-scale transformation of the coaching industry. The gold rush era for Kota is most likely over.
Why? Surely coaching is still big money in India…
Yes, the gloomy future of Kota and other such coaching towns has little to do with the frenzied demand for coaching institutes. The damage has been structural—some of it self-inflicted.
Cannibalising Kota: Over the past couple of years, the top coaching franchises have been expanding their network of centres. It became easier for parents to send their kids to schools closer to home. Allen’s Kota numbers are plummeting but admissions at its Delhi centre jumped from 9000 to 20,000 in just a year:
[A faculty member] said enrolments have grown in smaller cities as well, with the Patna branch adding 8,000 students this year, an impressive number considering it had opened only in 2021. Allen’s coaching centres in tier-three cities like Sikar in Rajasthan are also attracting a good stream of students from nearby towns and villages, the teacher said on condition of anonymity.
Many of these new centres offered big discounts when they opened their doors. And they’ve hiked teacher salaries thanks to increased demand—which presumably means they attract better talent. Even Unacademy is booming in places like Latur in Maharashtra.
The suicide factor: Parents have also become eager to keep their children close—with rising reports of student suicides. Students accounted for 8% of all suicides in 2022. Kota alone reported 26 in 2023. Doesn’t sound like a big number—but these deaths have made national headlines—underlining the pressure-cooker conditions in these schools. Last year, two medical students died by suicide within ten hours of each other.
Point to note: These worries have also proved a boon for smaller, local coaching schools, as well.
Ok, so it’s a matter of location…
Nope. That’s just the self-goal. The greater blow was struck by the government—which issued new guidelines—that directly take aim at their bottomline.
About those guidelines: The Education Ministry laid down strict guidelines for coaching centres in January. Most of the new rules were straightforward and greatly overdue. But they will also reshape the coaching industry. Here’s why.
Hello, age bar: Coaching centres have been very good at persuading parents to start grooming their children at a very young age. Schools in Kota enrol kids right from Grades VI and VII. Too bad the new guidelines ban admitting any student under the age of 16. Of the 200,000 students enrolled in engineering and medical prep classes in Kota, 40,000 are under the age of 16. That’s a hefty 20%.
Quote to note: An industry expert told Times of India:
The coaching industry in Kota has gone beyond preparing senior-class students for medical and engineering. Over the years, it has tapped the junior classes on the pretext of preparing them for competitiveness at their level. The students, right from Class 6, enrol in pre-nurture classes with the immediate aim of clearing Olympiads—physics, chemistry, astronomy and mathematics. In addition, to clear exams like the National Talent Search Examination (NTSE) and the Kishore Vaigyanik Protsahan Yojana (KVPY).
This is not a minor setback that can be fixed with relocation.
Quote to note: Coaching staff like Rahul Gupta are already beginning to make dire predictions for these kids:
If the Ministry is doing this to reduce psychological pressure on students, then I’m afraid it might backfire. It is very difficult to prepare students for these highly competitive exams in just two years. Students ideally should start preparing from class IX as the school curriculum does not cater to the rigour of these competitive exams.
Around 40% of the students at his institute are below the age of 16.
Hello, timing requirements: All coaching classes during school hours are banned—and classes cannot extend beyond five hours a day. That’s very unwelcome news—that will affect all children across all grades. In these centres, classes begin at 5 am and wrap at 8 pm. In fact, the Kota engine runs on dummy schools—which formally enrol these students:
“Students enrol in these ghost schools, which may exist physically, but no classes take place. These students, instead of going to these schools, comes to the coaching centre, which teaches them their respective class subjects and prepares them for coaching exams,” said Ravindra Singh, an activist working on high school education issues.
Bye bye, real estate dhanda: If students have to live in Kota, they also need a secure place to stay. That’s why coaching centres have invested in ‘hostel plots’: "The plot sizes that can be converted into hostels with 30, 50 and 70 rooms are the most popular.” And the going rate for each room (plus boarding) is Rs 100,000.
But here’s the sweetest bit of this deal:
Students aren’t just paying to stay in these hostels. They’re competing. Allen’s Kohinoor hostels, for instance, have a rank-based system on who’s allowed to stay and who’s made to leave. A “cumulative rank” is calculated every month to determine if a student has the marks to keep their accommodation. The kicker here is that there are usually no refunds if you’ve paid up for the year (though Allen states it will refund students on a pro-rata basis).
The bottomline: In Kota, only the winners matter—their images writ large on large billboards across the city. It has bred a teaching culture that has only contempt for children who struggle to keep up. The collapse of a single city will not solve the problem of our toxic coaching culture. But kids who aren’t imprisoned 24X7 in the Kota bubble may not be as desperate to please—or compete.
Reading list
For more on the recent salary cuts read CNBC TV 18. Mint, The Ken and Morning Context have excellent takes on the Kota crisis—but all are behind a paywall. Times of India is best on the new guidelines. The Wire looks at the economics of coaching schools.
