In the context of high levels of public expenditure, already committed to the educational sector in States like Kerala, it is argued that there should be restrictions on further investment. Such arguments are apparently supported by the fact that the birth rate is declining and therefore it will result in lesser number of school age population. Since this trend directly affect the elementary education sector-the most sensitive- it is important to project the school age populations with realistic assumptions. This study uses the recent information on the trends in fertility and reproductive preferences to make a realistic future assumption on fertility. Since the total fertility rate (TFR) is distorted by the changes in the timing of child bearing, the initial level of TFR was adjusted in the projection assumption. Among the three assumptions used (high, medium and low) the medium variant shows that the fall in school going age population will be around 3.29 lakhs between 1991 and 2001. However, there will be an increase in the school age population of around 2.37 lakhs between 2001 and 2006 and 1.54 lakhs between 2001 and 2011. Therefore, the fruits of fertility decline will be realized fully after the year 2011 only. In that context, built up school space should not be diverted for use outside schooling purposes; but should be used within the same sector for qualitative upgradation. Decelerating birth rate and its expected impact upon primary school enrolment, by itself cannot be considered as cause enough to withdraw public investment. Such overall impact will hide within it, level-wise changes of demand for education, from lower to higher school classes, particularly within the relatively educationally 'backward' districts and communities. Therefore, the decelerating birth rate should be carefully monitored. Taking into account its trend and location, further public investment should be reoriented and rationalized. To close schools purely on the basis of decelerating demographic trends will be counterproductive to the nationally and internationally accepted objective of education for all.