The scheme has been named 'Shaala ASMITA', an acronym for All School Monitoring Individual Tracking and Analysis.
Under this online system, data related to all schools will be collected with the assistance of local and state administration and their performance will be monitored, official sources said.
It is a simple process under which the Aadhaar number or a specially generated number will be used to track a child's progress, officials said.
"The HRD ministry is getting support of the states for this unique initiative and it is expected that the scheme will be launched by mid-June," an official said.
Last month, through a series of tweets, Union HRD Minister Smriti Irani had announced that the ministry is bringing a system to monitor the progress of millions of children across the country and also identify the dropouts.