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Context
Fee regulation of the Private schools by balancing their autonomy and their public welfare function
Right to freedom: The issue of fee regulation finds itself at the intersection of constitutionally protected freedoms enjoyed by private schools and the need for making quality education affordable and accessible
Private schools claim: The managements of such schools claim that these hikes are reasonable and justified as the costs of maintaining a fully functional private school with quality teaching and world-class infrastructure are quite steep
The Question: Can private schools arbitrarily hike fees?
SC’s view: Two cases
- In M.A. Pai Foundation v. State of Karnataka (2002), the Supreme Court held that regulatory measures imposed on unaided private educational institutions must, in general, ensure the maintenance of proper academic standards, atmosphere and infrastructure and the prevention of mal-administration by the school management.
- In Islamic Academy of Education and Anr. v. State of Karnataka and Ors (2003), a Constitution Bench of the Supreme Court held that these institutions have the autonomy to generate “surplus” which must be used for their betterment and growth.
- While private schools are ‘entitled to a reasonable surplus for development of education and expansion of the institution, there has to be a balance between autonomy of such institutions and the measures taken to prevent commercialisation of education’.
Terms not clarified
However, there is not much clarity on what the terms “surplus”, “reasonable surplus” or “commercialisation of education” entail.
Weak laws in the States
- In order to prevent private schools from charging unreasonably high fees and to prevent misuse of funds, several State governments have either enacted fee regulation laws or are in the process of framing them.
- These models are affected by the challenges of weak implementation, a lack of capacity and constant legal challenges posed by private school associations
- Existing legislative efforts have made an incomplete assessment of the deeper problems with financial management and accounting practices adopted by private schools.
CAG slammed private schools
- In 2010, the Comptroller and Auditor General slammed 25 well-known private schools in Delhi for arbitrary fee hikes.
- According to the report, money was being collected from parents under false heads, while at the same time, teachers were being underpaid, and accounts misrepresented.
Accounting standards
- In order to make these laws more effective, the solution would be to address the disease of financial mismanagement and misreporting, and not the symptoms
- In Modern School v. Union of India (2004), the Supreme Court recommended accounting standards for private schools.
Other measures
Further, measures such as regular government supervised audits, generating capacity in State-level Departments of Education, regular inspections, and stricter sanctions for fraudulent reporting could be considered.
