The recent student protests in India, triggered by alleged leaks of the National Eligibility cum Entrance Test (NEET) medical school entrance exam papers, have brought to light the escalating financial burden of private coaching. The NEET exam, taken by approximately 2 million students annually for fewer than 150,000 medical school seats, is highly competitive, leading many families to invest heavily in coaching. This trend is exacerbated by a broader issue of limited opportunities for educated youth and high unemployment.
Demonstrations, led by the Cockroach Janta Party (CJP), spread across cities like New Delhi, Mumbai, and Kolkata, prompting a rare concession from Prime Minister Narendra Modi's government. Education Minister Dharmendra Pradhan resigned, and the government agreed to drop police cases against protestors and compensate families of students who died by suicide following the exam paper leaks. These developments underline the growing frustration among India's youth regarding the education system's credibility and job prospects, particularly concerning repeated paper leaks and recruitment irregularities.
Despite the political upheaval and the government's concessions, India's financial markets have largely remained unperturbed. The India VIX, a measure of implied stock volatility, is below its June 6 level when protests began. While the rupee has weakened 0.3% this week, the movement is attributed more to oil price outlooks than domestic political instability. Foreign inflows have kept the 10-year bond yield below 7%, indicating that traders perceive the market drivers to be geopolitical tensions and crude prices rather than the student protests.
