The Economics of Board Exams

Why class 10 and 12 board exams carry such high stakes in India, how they affect coaching, stress and university admissions, and reforms to reduce pressure.

In India, class 10 and class 12 board exams are major life events. Families invest heavily in them, and results can shape college admissions and careers.

Why the stakes are high

Signalling: scores signal ability to colleges and employers when information is limited.
Scarce seats at top colleges.
Social pressure: results are widely discussed and published.

Costs

Stress and mental health problems among students.
Coaching spending.
Rote learning: memorising for exams rather than understanding.
Cheating and paper leaks in some cases, which undermine fairness.

Score inflation

In some years, boards awarded very high marks, with many students scoring above 95 percent. This made it harder for colleges to distinguish students and led to very high cut-offs, such as at Delhi University.

Entrance exams

Partly because of score inflation and differences between boards, admissions shifted toward entrance tests. CUET (Common University Entrance Test), introduced in 2022, became the main route to central universities, reducing the weight of board marks.

Reforms

NEP 2020 proposed making boards “easier” by testing core concepts rather than memorisation, and allowing students to take exams twice a year.
The CBSE planned to offer two board exam sessions for class 10 from 2026.

Economic lesson

When a single test determines life chances, families invest heavily in preparing for it, sometimes at the expense of broader learning.

The 99 percent problem

A college receives thousands of applicants with board scores above 98 percent. It can't distinguish between them and sets a cut-off of 99.5 percent. Students with 98 percent are rejected, even though the difference may reflect little real difference in ability.

Thinking board exams measure all important skills

They test certain academic knowledge but miss creativity, collaboration and many practical skills.

Key takeaways

Board exams signal ability and affect admissions.
High stakes bring stress, coaching and rote learning.
Score inflation led to entrance tests like CUET (2022).
Reforms include concept-based testing and two exam sessions.