SC ruling on private school fees: Govt regulation is important, but can't be long-term strategy

On 24 January, the Supreme Court ruled that any private school in Delhi running on land allotted by the Delhi Development Authority (DDA) has to take the permission of the Delhi government before hiking the fees. The court also remarked that if they did not wish to take permission, the schools could, "return the land to government". This ruling came after a year-long battle where an association of private schools challenged a similar decision made by the Delhi High Court. This decision needs to be seen in light of numerous protests by parents (of children studying in private
schools), who complain of excessive and arbitrary fee hikes by schools.

These protests are not limited to Delhi alone.

A simple Google search shows that similar protests have taken place in Hyderabad, Chandigarh, Mumbai, Pune, Chennai, Bengaluru — in short, in all the major cities in India. Private schools claim that these protests happen because parents wish to send their children to high-end schools, but do not wish to pay the cost it entails. However, an Assocham report in 2015 showed that the costs of private school education in the last decade have increased at a pace faster than incomes, showing a 150 percent hike between 2005 and 2015. The report shows that the cost of educating a child in a private school has risen from Rs 55,000 in 2005 to Rs 1,25,000 per annum in 2015.

Representational image. AFP

Representational image. AFP

Under pressure from protests by parents — or under order from courts — several state governments have attempted to regulate the fees of private schools. Prominent among them is Tamil Nadu which passed a fee regulation Act in 2009 setting up district-level fee regulation committees that fix the fees for private schools for a period of three years. Rajasthan, Maharashtra, Karnataka and Telangana are at different stages of enacting and implementing fee regulation legislations.

While such laws in the states mentioned above and the Supreme Court judgment may bring relief to parents, it does raise a few legitimate questions:

Why should the government — which has been unable to provide high quality education in its own schools — have the right to regulate those schools which are more successful at providing it?

Moreover, if a school wishes to provide extra facilities to their students and parents are willing to pay for it, why should a government intervene?

If parents are making a choice to send their children to private schools, should they not choose a school they can afford?

Is it mere populism by the governments when they attempts to regulate fees?

Private schools have strongly resisted any attempts at regulation and have argued that such attempts would lower the standards of education by forcing the schools to cut costs. Another question that needs to be asked is whether schools or any other educational institution should be allowed to make profits out of the running of the school. After all — it is argued — what would be the incentive of running a private enterprise, if no profit could be made?

However, as per the current legal framework, educational institutions are supposed to run as non-profit, charitable organisations. This issue has been the subject of much litigation, however, three major judgements — TMA Pai Foundation versus State of Karnataka (2002), Islamic Academy of Education versus State of Karnataka (2003), Modern School versus Union of India (2004) — have all upheld three principles: One, that educational institutions should be allowed to make ‘reasonable surplus’, two, that this surplus should be used for the growth and better facilities of said institution and finally, that this surplus could not be used for profiteering by the school management.

These were the principles used by the Delhi government when it attempted fee-regulation of schools on DDA land in 2016. There was no cap set on the fees a school could charge nor did the government fix/decide the fees of any school. The school was free to set the fee structure in consonance with the facilities provided by them; the government would merely verify the accounts to ensure that money being taken from the parents was being used rightfully spent on the children and the school.

However, the results of this verification of accounts were nothing less than alarming: Schools were found to siphoning of money from the school and illegally transferring it to their parent society, one school had bought a seven-acre farmhouse outside Delhi in the name of the school management, another school had bought a flat, one of the schools was found charging ICT fees, but had no ICT facilities and many schools were found to have reserves in crores, but were still hiking fees annually. This was not ‘reasonable surplus’, this was clearly profiteering and financial malpractices being carried out under the veil of ‘autonomy of private schools’.

And this is why regulation of private schools is needed: Not to take away the autonomy of the schools, or to cut down the facilities being provided by them; but to simply prevent school managements from siphoning of money they receive as fees. Not only should audit of all private schools be mandatory, but their accounts and fee structures should be put in the public domain.

This transparency will ensure an end to financial malpractices. And while governments should remain regulators, they need to remember that this is not a long-term solution. The problem of an acute mismatch between demand and supply of schools has happened because the government has not been able to fulfil its role of providing high quality education. And while regulation and efforts at transparency should continue — governments across the country need to pull up their socks and improve public schools. If high quality is available free of cost, why would anyone pay exorbitant fees for the same?

The author is a leader of the Aam Aadmi Party and part of the party's parliamentary action committee. She also works as an advisor to the Government of NCT of Delhi​