Indian private schools boost spending on campus upgrades

Avanse Financial Services has outlined six trends driving demand for school infrastructure financing in India, as private schools invest more heavily in campuses and learning spaces.

The trends centre on changes in teaching methods, rising expectations from parents, wider use of digital tools, expansion by private school networks, new day-boarding models and a stronger focus on sustainability.

At the core of the shift is the need for schools to adapt their physical spaces. Avanse said the National Education Policy 2020 is pushing schools away from rote learning and towards more experiential, multidisciplinary teaching, requiring different types of classrooms, labs and activity areas.

That means rethinking existing campuses as well as funding new construction and upgrades. Advanced science facilities, information and communication technology labs, creative rooms and other specialist learning areas are becoming part of the expected offer at many private institutions.

Policy pressure

Avanse pointed to the 5+3+3+4 structure under the policy framework as one factor changing infrastructure requirements. As schools align with that model, investment needs are extending beyond conventional classroom blocks into spaces for practical work, group activity and broader student development.

Another factor is the scale of the private education market. Avanse cited UDISE+ figures showing more than 3.4 lakh private unaided recognised schools in India, creating a large base of institutions that may seek capital for expansion, refurbishment and new facilities.

This demand is visible across several markets, including Maharashtra, Telangana and Andhra Pradesh, where schools are seeking finance to expand capacity and improve infrastructure as competition and expectations rise.

Changing classroom

Technology adoption is also reshaping school spending. Digital teaching tools and technology-enabled learning spaces are becoming a more regular part of investment plans, moving beyond basic computer access.

For schools, that creates a higher upfront funding requirement. Interactive learning environments, digital equipment and connected spaces add to capital expenditure as institutions also balance spending on buildings, safety and student amenities.

Avanse argued this reflects a broader shift in what families want from a school. Parents are looking beyond examination results and placing greater weight on the overall learning environment, including facilities that support science, sport, creativity and communication skills.

That is pushing schools to invest in STEM and robotics labs, playgrounds, sports infrastructure, performing arts areas and other specialist settings. In practical terms, infrastructure is becoming part of a school's competitive position as well as its educational model.

New expectations

Avanse said demand is also being shaped by changing household routines. With more working parents, some schools are exploring day-boarding formats that keep pupils on campus for longer through a mix of academics, extracurricular activities and supervised care.

Such models require more than teaching rooms. Dining areas, activity zones, sports spaces and additional learning environments all increase the capital needed for schools that want to broaden their daily offer.

Sustainability is emerging as another area of spending. Avanse said schools are looking at solar power, energy-efficient systems and other measures that can reduce operating costs over time while meeting rising expectations around environmental responsibility.

Those projects sit alongside more immediate investment in health and safety, digital readiness and campus expansion. As a result, infrastructure planning is becoming more complex, with schools balancing educational, operational and reputational considerations.

Avanse, an education lender and non-banking financial company, said this combination of forces is lifting financing needs across the sector. In its view, Indian school infrastructure is shifting from simply adding capacity to redesigning campuses around a broader definition of education.

The assessment suggests lenders specialising in education may find a larger market as schools seek funds for upgrades linked to teaching reform, technology and parent demand. It also points to a more capital-intensive phase for private schools as they try to meet changing expectations across academics, student experience and campus design.

In that reading, India's private schools are no longer investing only in buildings to house students. They are putting money into environments that reflect a wider set of demands from families, regulators and the labour market.