M R Yuvatha, Senior Correspondent , siliconindia

• Coaching is essential due to intense exam competition and parental concerns.
• 18% GST hike raises costs but doesn’t change habits.
• Digital tools supplement but don’t replace trusted coaching.

Tutoring is big business and the coaching craze did not spring up overnight. India’s tuition obsession isn’t new. It accelerated in the 1990s with neighborhood tutors, exploded in the 2000s fueled by the JEE-NEET competition, and by the 2010s had evolved into a parallel education system.

Why the Coaching Craze Won’t Die

India’s extremely competitive exam environment is a main key driver. Over 2 million students now take the NEET medical entrance each year, vying for 140,000 seats, and over 1 million sit the IIT-JEE exam competing for only 10,000 spots. With such odds, many parents feel coaching is essential. A recent report notes that Kota often called India’s coaching capital  draws around 300,000 students annually, many attending classes 7 days a week (18 hours of study per day is common).

One Kota student preparing for NEET at Allen Career Institute summed it up, “This is the most stressed city in all of India… Every day, students work 4 am to late at night and get an exam every two weeks”. Other factors feed the cycle. With more dual-income families and working mothers, parents often lack time or the subject expertise to coach children at home. Modern school curricula change rapidly, so parents worry they can’t teach the latest material. Peer pressure adds fuel, if one student in a friend group joins a tutorial, others feel compelled to follow. The result is that tutoring is seen not as a luxury but a necessity – insurance against falling behind.

Nirmala Sitharaman Says “Coaching Institutions are not Educational Institutions, 18% GST Applies to Them. Coaching classes and similar training centres are considered businesses, not schools or colleges. So, they have to pay 18% GST.

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A Tax that Pinches, But Doesn’t Change Habits

When the government rolled out GST 2.0, school and college fees stayed tax-free. Pencils, notebooks, even maps were pushed into the zero-tax bucket. But coaching? That remained at a whopping 18% GST.

- Rs 50,000 JEE course at Allen or Aakash now costs Rs 59,000.

- Rs 20,000 UPSC crash course online at Unacademy or Byju’s swells to Rs 23,600.

- Even PhysicsWallah’s 'low-cost digital modules feel the tax bite.

On paper, this was designed to make schools the cheaper, obvious choice. In reality, parents barely flinch. For them, coaching is insurance for their child’s future.

Also Read: How India Strategizes on the Global Jobs Chessboard with the Recent Layoffs

Why Parents Can’t Quit Coaching

India’s tutoring ecosystem now spans from huge franchise chains to local ‘uncle ji’ tutors, and from neon-lit coaching centers to smartphone apps. Branded names like Allen (Kota), Aakash (Delhi), Vibrant Academy (Kanpur) and Narayana (Hyderabad) are household names in their regions. Even IIT professors get involved, the Education Ministry recently launched SATHEE, a free online JEE/NEET coaching platform run by IIT Kanpur, to help needy students prepare without cost.

On the tech side, platforms like BYJU’S Exam Prep (which acquired Aakash in 2021) and Unacademy now compete on price and convenience, offering monthly subscriptions and AI-driven study tools as alternatives. These can be cheaper or free at point-of-use (especially as free versions of Khan Academy, YouTube lectures, or new AI ‘study buddies’ like ChatGPT’s study mode become available).

In practice, however, trust and habit matter. Many parents still prefer human mentors or well-known brands over self-study apps. And even the best AI tutors need good prompts and guidance to work effectively. For now, digital tools seem more likely to supplement rather than fully replace paid coaching though their role may grow over time.

Wrapping It Up!

The 18% GST tweak pinches the wallet, but it doesn’t change two decades of social norms and school-system gaps. Most parents will simply factor the tax into their budgets rather than abandon coaching altogether. True change will require making regular schooling strong enough and other learning tools accessible enough that private coaching becomes a genuine optional extra rather than a default necessity.