To answer your question from an indian perspective, it demands on demand and supply equation. However for learning evalution in early childhood ....

Assessing academic achievement to hold individual students, teachers, and schools accountable

There should be no high-stakes accountability testing of individual children before the end of third grade. This very strong recommendation does not imply that members of the Resource Group are against accountability or against high standards. In fact, instructionally relevant assessments designed to support student learning should reflect a clear continuum of progress in Grades K, 1, and 2 that leads to expected standards of performance for the third and fourth grades. Teachers should be accountable for keeping track of how well their students are learning and for responding appropriately, but the technology of testing is not sufficiently accurate to impose these decisions using an outside assessment.

Lorrie Shepard, Sharon Lynn Kagan, Emily Wurtz (1998),  PRINCIPLES AND RECOMMENDATIONS FOR EARLY CHILDHOOD ASSESSMENTS, THE NATIONAL EDUCATION GOALS PANEL by the Goal 1 Early Childhood Assessments Resource Group

In small schools there is no need for each age group to be in a different class as long as the presentation is appropriate to the development level of the students. Many configurations have succeeded in educating children.