Cap on fees in private schools is not enough. Focus on education quality
School education (K-12 segment) has recently witnessed a lot of furore owing to the tussle between parents, schools and the regulators on the fee and admission process.
Education is regarded as a charitable activity, deriving its roots from the gurukul system. The enactments on school education in most states have been drafted primarily for regulating government-aided schools. The same enactments have also been made applicable to private un-aided schools. Regulation of aided and un-aided schools with the same piece of legislation has some inherent problems. While government-aided schools need closer monitoring, private un-aided schools require merely a facilitation role, giving maximum autonomy to the school management.
According to the District Information System for Education (DISE) data of 2014-15, nearly 75% of elementary, 43% of secondary and 40% of higher secondary schools are government-owned/managed while the remaining are privately-owned/managed. Private unaided and aided schools account for nearly 42% of the enrolment in schools, indicating their significant role.
Quality education warrants substantial investments in the institution, be it for establishment of infrastructure, hiring quality faculty, providing technology and meeting the continuous need for overall upgradation. Since the education policy of the government requires private schools to play a larger role in providing quality education, they need to be ensured of a viable structure.
Such structure should enable the schools not only to generate adequate revenue to cater to the operating expenses but also to generate reasonable surplus to payback debt and take care of future expansion. Therefore, determination of school fees becomes a highly debatable issue as it needs to pass the litmus test of “reasonability”.
The recent initiative of the Gujarat government through the Gujarat Self-financed Schools (Regulation of Fees) Act, 2017, to regulate the fee structure of self-financed schools has garnered the interest of all stakeholders including the Centre and other state governments looking to adopt a similar model. The legislation empowers the government to cap the fees charged by schools.
In case a school intends to charge fees above such capped limits, the government shall have the power to determine and approve the fee proposal of each school.
Though such an initiative by the government is a welcome step, it will be interesting to see how the states would amass and involve adequate infrastructure and skilled resources to effectively determine the fee structure of each and every school in a state.
The overt emphasis on the fee issue has hijacked the focus from other more significant issues surrounding the sector such as quality of education and encouraging private participation in establishing new schools.
Therefore, the government should consider enacting a separate code for private unaided schools, which not only tackles the issue of fees but also encourages the schools to provide quality education and imbibe the principles of self-regulation through good governance and compulsory disclosures like key financials, student-teacher ratio, trend in fee increase in the past years etc.
The code should also empower the government to ensure that schools do not engage in unfair practices, profiteering or charge capitation fees.
Inder Mohan is partner and Sadia Khan is principal associate at Shardul Amarchand Mangaldas & Co
The views expressed are personal