..is in dire straits according to this article from Samskrita Bharati. Here is the original article and here are some excerpts from the English translation.

What is this serious situation? The place of Sanskrit in schools is the biggest base of Sanskrit these days. But that also seems to be slipping away now. With the advent of the rule that to be a teacher in Elementary and Secondary schools, a teacher-qualification-examination must be passed. However, in many places for those exams Sanskrit subject is not set by the government. In these boards, we are able to secure this by going to the court – CTET exam coordinated by CBSE and Haryana’s TET examinations. But, for TET conducted by UP even the Highcourt did not help Sanskrit in this matter related to examinations. We don’t know how many courts in how many states we’ll have to go.
In Central (kendriya) Schools, at present English, Hindi and Sanskrit – these three languages are taught. But now as an option to Sanskrit, these two languages are offered – French and German. Central Schools follow the syllabus created by Central Board of Secondary Education, and in that syllabus as a third language these option of Foreign languages was already provided – so for this reason we cannot go to court related to this matter. (The adoption of Foreign Languages in the three-language-formula is another topic and some people are thinking about going to court regarding it)
In Maharastra’s Marathi Secondary Schools, Hindi is taught as a compulsory third language. Maharastra government changed the rule and said that in its place German or French can also be taught. Due to this there was a commotion in the state assembly and the Governement revoked the new rule. It had justified the change claiming that students studying in English-medium schools score higher due to the Foreign languages but the students studying in villages are deprived of high scores due to this rule.

Read the whole article here