The Debate Around Fee Regulation
The issue of regulating school fees in unaided private schools has been a matter of national debate. With several petitions filed across High Courts and legislative interventions being attempted, the conversation continues to evolve. Most recently, the Delhi Government passed an ordinance to introduce a Fee Regulation Act for unaided private schools, intensifying the discourse.
At the heart of this debate lies the landmark judgment of the Supreme Court in the T.M.A. Pai Foundation vs. State of Karnataka case, which reaffirmed the autonomy of private educational institutions in determining their fees. However, it also held that governments may lay down guidelines to ensure transparency and prevent profiteering.
Over the years, multiple states have enacted Fee Regulation Acts with varying levels of success—some have been struck down by the courts, while others continue to be implemented.
Why Fee Regulation in Schools Is More Complex Than Colleges
Unlike professional colleges—such as those offering medicine or engineering—schools exhibit tremendous diversity in their vision, academic approach, infrastructure, affiliations, and cost structures. The idea of a “one-size-fits-all” fee regulation model is neither practical nor equitable due to the following key challenges:
Diverse Operational Models
Some schools operate from self-owned campuses, while others function on leased premises or under revenue-sharing agreements. Costs vary drastically depending on location, land value, and real estate arrangements.
Variation in Teacher Salaries
Faculty remuneration forms the largest component of school expenditure. Salaries differ based on qualifications, experience, subjects taught, and urban-rural pay disparities.
Infrastructure and Learning Facilities
Schools offer vastly different experiences—ranging from basic classroom setups to state-of-the-art campuses with labs, libraries, sports facilities, arts and music studios, and digital infrastructure—all of which impact fee structures.
Financial Liabilities and Compliance
Many schools have availed loans for infrastructure development, leading to recurring interest and repayment commitments. Costs related to safety norms, regulatory compliance, and international affiliations further compound financial pressures.
Inflation and Salary Revisions
With annual pay revisions in both public and private sectors averaging 10–12%, schools are compelled to keep pace to attract and retain quality educators.
State-Wise Fee Regulation Policies in India
Here’s a glance at how some Indian states are addressing the issue:
- Gujarat: The Gujarat Self-Financed Schools (Regulation of Fees) Act, 2017 caps fees at ₹15,000–₹27,000 annually, depending on the grade. Any school wishing to charge more must seek approval from the Fee Regulation Committee (FRC). The law is currently under judicial review in the Supreme Court.
- Tamil Nadu: The Tamil Nadu Schools Regulation of Collection of Fees Act, 2009 mandates that every private school submit its fee structure for review and approval. The law is under interim stay by the Supreme Court.
- Madhya Pradesh: Schools can increase fees by up to 10% annually without FRC approval. Hikes beyond that threshold require committee approval. The regulation is currently in active implementation.
- Uttar Pradesh & Haryana: These states allow schools to increase fees annually based on the lesser of the average teacher salary hike or CPI + 5%. The FRC must approve any increase beyond this. The courts have upheld the validity of these regulations.
- Andhra Pradesh (undivided): Earlier government orders—GO MS 42 (2007) and GO MS 91 (2009)—which sought to cap school fees, were quashed by the High Court.
- Telangana: In 2018, the state government appointed the Prof. Tirupati Rao Committee, which recommended allowing schools an annual hike of up to 10% without prior approval. Proposals above that limit would require zonal committee clearance. Although the recommendations weren’t implemented then, a newly appointed Education Commission has since submitted a revised draft bill, currently under review by the Cabinet Sub-Committee.
Rather than blanket fee caps, the focus should be on ensuring transparency, financial accountability, and educational quality.
India’s educational ecosystem is too diverse and complex for a uniform regulatory approach. Sensible fee regulation must strike a balance between institutional autonomy and public accountability. The goal should not be to control education, but to create an environment where quality, equity, and sustainability coexist.
The Truth Behind the “Not-for-Profit” Narrative
One of the biggest misconceptions in the public discourse is the belief that “education should not be for profit.” Yet, the societal behavior contradicts this: families invest heavily in their children’s education, even taking loans or sending them abroad for higher studies. Banks and even the government encourage such investments through education loans.
If education is seen as a worthy investment, why not allow schools the freedom to choose their operational model?
Time for Liberalisation in School Education
There is a growing need to rethink the rigid framework of “not-for-profit” operations in school education. Schools should be allowed to choose whether they wish to function as “for-profit” or “not-for-profit” institutions with separate guidelines. A regulated, transparent “for-profit” model can contribute to government revenues through GST and taxes, which can be reinvested in strengthening public education.
This article was originally published in the July 2025 edition of Brainfeed Magazine.
