Means-cum-merit scholarships tackle both financial and academic barriers to schooling. Critically examine how effective NMMSS has been in reducing secondary-level dropouts.

The National Means-cum-Merit Scholarship Scheme (NMMSS) is a Central Sector Scheme that began in 2008–09. It gives 1 lakh Class IX students ₹12,000 a year through DBT so they don't drop out after Class VIII [3]. The scheme is well designed, but there is little hard evidence that it actually reduces dropouts.

Strengths: Where NMMSS Works

• Dual targeting: Families must earn no more than ₹3.5 lakh a year, a ceiling raised in 2022 [2]. Students also need 55% in Class VII, with a relaxation for SC/ST [3]. Together these pick out students who are poor but doing well.
• What beneficiaries say: A NIEPA evaluation (2017) found that 70.1% of awardees could not have continued their studies without the scholarship [1].
• Transparent payment: Money goes through the NSP and DBT, after checks at the institute and the district, so no middlemen are involved [3][7].
• Falling dropout rate: Secondary dropout fell from 13.8% (2022–23) to 7.0% (UDISE+ 2025–26) [5].

Limitations: Why the Impact Is Unproven

• Weak evidence: The NIEPA finding is self-reported. The Ministry also keeps no central record of awardees who drop out [1]. Many factors drove the national decline, so NMMSS's share of it can't be measured.
• Small scale: 1 lakh fresh awards a year is very little against crores of secondary students [3].
• Unfilled seats: By 30 September 2026 there were only 88,522 fresh applications, even after the deadline was extended twice [3][4]. A December 2025 review flagged problems with quota use, how States conduct the exam, and renewals [6].
• Students falling off: If every awardee renewed, there would be about 3 lakh renewals. There were 1,97,133 [3], which suggests many leave in Classes X–XII.
• Shrinking value: The ₹12,000 award has not changed since 2017 [1]. The Standing Committee on Education (2022) asked for scholarship amounts to be revised [8].
• Exclusion by design: The merit bar and the portal-based process leave out weak learners, who are the most likely to drop out.
• Wrong measure of success: The "100% saturation" target counts applications, not students who finish Class XII [7].

NMMSS does remove a real financial barrier for poor students who are doing well. But its effect on dropouts rests on self-reported data, and it reaches only a small group. Before the scheme is renewed, the government should:

• order an independent evaluation comparing awardees with non-awardees;
• track awardees through UDISE+ up to Class XII;
• match State exam calendars to the NSP timeline;
• link the award to inflation.

These changes would make NMMSS an effective tool for NEP 2020's goal of universal secondary education and for SDG 4.