“No Room To Breathe”: The story Of An Indian School Founder

Nearly one-third of India's school-going children, a staggering 90 million are enrolled in Budget Private Schools (BPS). Despite their crucial role in providing affordable education, these schools face suffocating regulations that threaten their existence. Inspired by models like the Grameen Bank, BPS aims to prove that affordable, high-quality education can be both sustainable and scalable. There is a strong demand for quality education among the poor, who view it as a ticket out of poverty for their children. Today, 36 per cent of students attend BPS, compared to 54 per cent in government schools and 10 per cent in higher-fee private schools.

In 2015, the landscape for BPS was filled with both opportunities and challenges. Enrollment was rising and even under-resourced parents were willing to pay for quality education. The demand was promising, but operating a school meant navigating a complex web of regulations. Parents earning as little as Rs 10,000 per month were willing to spend 10-20 per cen of their income on school fees, despite the availability of free government schools in their neighbourhoods. As the quality of education at institutions improved, they were forced to turn away admission-seekers due to a lack of capacity.

However, regulatory restrictions have created significant obstacles. Schools in India can only be recognised if they are non-profit entities, such as charitable trusts, societies or Section 8 companies. This restriction prevents school owners from legally returning profits to investors, making it nearly impossible to raise funds from institutional investors. Consequently, the sector struggles to attract capital and innovative entrepreneurs. Lack of institutional funding limits the construction of new schools, allowing existing ones to charge high fees despite poor quality. This scenario mirrors the "licence raj" of the 1980s, which stifled growth in industries like cars, telecom and airlines.
Additionally, land requirements for opening schools pose another challenge. For example, in Haryana, a primary school needs 0.5 acres of land to obtain a licence, making it financially unviable to open budget schools in urban areas. These requirements often change arbitrarily, with little clarity on their rationale. It is essential to question whether large land parcels improve learning outcomes or if alternative ways exist to achieve policy objectives, such as ensuring adequate space per child.

The regulatory maze extends to micromanaging fees, teacher salaries and even library book counts. While entrepreneurs in other sectors face regulatory challenges, the education sector is particularly notorious for its complexity. The issue stems from state education departments viewing themselves primarily as service providers running government schools, leaving little room for sensitive policymaking or neutral regulation. This results in policies that hinder private schools' operations and development.

Government officials often claim they will improve government schools so much that BPS will go out of business. While competition is welcome, these statements reveal a conflict of interest between the education department's roles as service provider and policy maker/regulator. Imagine if BSNL were the telecom policymaker and regulator for Airtel, Vodafone and Jio would the competition be fair?

Private school operators have come to accept that government support is unlikely. They feel voiceless, fighting individually and through associations, constantly fearing new policies that divert time and energy from improving their schools. The relationship between private school operators and the government is marked by animosity and mistrust.

The New Education Policy (NEP) 2020 proposes a long-overdue solution: separating the government's school-running and policy-making roles into independent units. It also emphasises establishing a strong, independent regulatory body, the State School Standard Authority (SSSA) to oversee and regulate all schools, ensuring a level playing field and enforcing quality standards. Without such an enabling environment, the education sector risks being dominated by those with political connections or significant financial resources.

Private school operators eagerly await the NEP's implementation. Unfortunately, some states have merely designated existing agencies, like SCERTs and state examination boards, as SSSAs, lacking true independence. It is crucial for states to muster the political will to implement NEP reforms correctly.

Without fundamental change, the best people will not be drawn to running schools, and the sector will remain dominated by politicians and builders. The future of our children hinges on creating the "room to breathe" that BPS needs to thrive.

Vikas Jhunjhunwala

Guest Author Founder, Sunshine Schools