Reengineering the School Fee Regulation— Solutions for Government
Look at the fees charged in the name of quality. The average fees charged by many schools in Bangalore is skyrocketing day by day and many schools now have started charging more than Rs 1 lakh with few schools touching more than Rs 2 lakhs too for Grade 1… This is probably the highest in the country…Even schools in Mumbai and Delhi don't charge this much…
Profiteering in the name of the education should not be encouraged and as such if these schools at least where providing education to poor under RTE, the fee increase was warranted.
What appears is that almost all the top schools have managed to get a certificate of being a linguistic or a religious minority which will exempt them from implementing RTE?
The Report of NCPCR highlights this issue where it clearly mentions that all the religious and linguistic minority certificates were issued post the enactment of the RTE. The graph below explains how the constitutional provisions for protecting minorities have been misused in the entire implementation of RTE
Around 62.5% of the students in minority schools are from non minority communities.
Only 8.26% of the disadvantaged sections of the societies like SC/ST/OBC are educated in minority schools
The rise is very evident after 2006 where more than 10000 certificates are issued post enactment of RTE. However post 2015, because of the guidelines imposed, there is a SLIGHT reduction in issuance of minority schools certificates.
The above chart clearly shows that there is a sudden rise in issuance of Linguistic Minority certificates. More than 2500 odd certificates issued from 2006 onwards, when less than 200 certificates were issued before that. This is nothing but misuse of the provisions of the protection provided under the constitution. For example, all languages other than state language will be a minority.
For example, a rich Telugu school will get a linguistic minority certificate in Karnataka. While a poor Kannada school should implement RTE.
Law can be twisted to the needs of the rich.
The complex constitutional provisions and lethargy in implementation will ensure that these top schools will never implement RTE ever. However since RTE is not applicable, these schools should not be allowed to charge whatever they want and it is in this background, the recent judgement by Supreme Court becomes important.
38328_2019_34_1501_27945_Judgement_03-May-2021.pdf (sci.gov.in)
In a nut shell, Hon’ble Supreme Court agreed that Private unaided educational institutions can fix their fees depending upon the quality of education provided but clearly stated that educational institutions cannot become centers of commercialization and exploitation. It went on to state that the government is equipped with necessary powers to take regulatory measures and to ensure that the private unaided schools keep playing vital and pivotal role to spread education and not to make money. Thus,
Government can initiate any action to avoid profiteering and commercialization.
Hon’ble Supreme Court has upheld the State Government’s right to avoid profiteering and commercialization and also provided search powers to investigate the erring schools.
Hon’ble Supreme Court also upheld the maintenance of records in various formats that would help authorities to consider cases for profiteering or not.
This is the first major judgement which will allow Scientific Fee Determination for a school in the country
It is no doubt that Fee regulation is important. But I want to bring in a superb model implemented by Gujarat Government in Fee regulations.
The Fee regulations Act and Rules are scientifically designed with various forms and procedures which can be readily implemented by the state government of Karnataka
This the website which should be available to Common Man. On entering the website, the portal shows all the relevant schools along with the view fee. The details of the fee that is required to be charged is also available to the common Man. In most of the cases, the Fees is far less than Bangalore schools. Even in the Delhi Public School, Ahmedabad, the fees is only Rs 70000/-, while in Bangalore it has reached Rs 2,00,000/-.
I need to thank the Gujarat Education Ministry that came up with such a comprehensive regulation to provide affordable education to its citizens.
I will now discuss the reengineering that may be required at State Government of Karnataka on lines of Gujarat Model of Fee Fixation Committee. I have verified other Fee Regulation committee like Tamil Nādu, but none are as comprehensive and transparent as the Gujarat Model which provides for a complete framework of Act, Procedures and Forms for the execution.
Government can enact a act similar to the above model. The Act can downloaded by clicking the link below
http://www.frcgujarat.org/PDFFiles/FeeAct2017.pdf
On the similar lines, the rules can also be downloaded by clicking the link below
http://www.frcgujarat.org/PDFFiles/RulesforNonGrantedFEERegulalation.pdf
The various forms required for procedural requirement can also be downloaded using the link below
Home | Fee Regulatory Committee (frcgujarat.org)
Now the salient features of this act is described below which makes you think how deep the government has thought about this act.
Section 2(r) of the Gujarat Self Financed Schools ( Regulation of Fees) Act 2017 clearly defines what is profiteering
“ (r) “ profiteering” means any amount accepted in cash or kind, directly or indirectly which is in excess of the fee fixed or approved as per the provisions of this act and shall include profit earned from school by trust or company associated with the school in any manner whatsoever”
The inclusion of company associated with the school is very important. Many Trusts have land in the companies name and have been charging exorbitant rents to take out the surplus. Similarly numerous services like teaching, brand charges are all collected by associated companies of the trustees which is one of the main routes for siphoning of the surplus.
The act carefully recognizes that the fees fixed includes even any payment made directly to these companies which are not available in the books of the trust.
This should end the massive racket of Integrated coaching schools like Allen that have tied up with various schools for providing education in schools. Chaitanya and Narayana Chain of Schools is a classic example for this. These are integrated coaching + school centers. Here also the coaching cannot be charged separately and the school fees cannot be charged separately as per the above act. This is welcome move, since right now students are fed up of paying fees to both coaching and school.
This will also hit very large school chains like Delhi Public School, Pearson that have been collecting hefty brand fees from various Franchisee Schools
Section 3 lays down that a Fee regulatory committee shall be set up with a very senior officer. The member prescribed should be not below the rank of Principal secretary to government and various other members which clearly shows the importance laid down by the government in getting the best of the brains to this committee.
The committees powers are defined in section 8 and it is very comprehensive right from its authority to determine the right fees to hear any complaints about exorbitant fees. It has the powers of the Civil Court under the Code of Civil Procedure 1908 to issue summons to any school authorities to clarify on any matters.
One of the beauties of this act is that it exempts a large number of schools which are charging less than a prescribed fees( Rs 20000/-) from the ambit of the act. As a result of this many small schools who are already charging lesser fees will not come under this act.
The main purpose of this act is to take on exorbitant fees that is being charged only with the intention of profiteering and to avoid commercialization of education.
Fee regulatory committee has prescribed Form 2 for those who want a Fee determination. The factors affecting determination are clearly mentioned in section 10 which is very comprehensive. But one needs to look at some of the items collected in this Form.
The above Form clearly shows that much thought has already gone into the design of these forms. Clearly in the financial information provided, the form recognizes the misuse made in the way of rent on building and playgrounds that are collected by Trustees Companies. This can be allowed only to the extent of making reasonable profits and not a way to siphon off large amounts of surplus from trust to the company.
The details of the income has 21 heads and is very comprehensive. One thing I liked about the above form is that it specifically asks what is the average expenditure per person of academic staff and non academic staff. Here huge bogus billing is noticed and this should be strictly monitored for any bogus claim of salaries. The details of expenditure is also very comprehensive and it requires a audit certificate from a CA.
One more beautiful control mechanism brought in this act under section 11 is that School will operate only one bank account for collection of fees and the confirmation should be given in the form of counterfoil from bank. This will ensure that multiple bank accounts are not used to collect fees.
Even Section 11(3) prohibits collection of any amount in any form from the parent apart from the Fee fixed by the committee.
The rules also prescribes various documents to be maintained which is very comprehensive
At the end there is one more powerful provisions where in it puts the onus on the disclosure norms to be made by self financed schools. Section 18(6) of the rules mentions this
The above provisions clearly shows the misuse done by many schools in various forms.
In the first form, many pre schools, play schools of the main schools are being run under private umbrella. Under this provisions, the fees fixed by the fee regulation committee will have to be adhered to.
Franchisee is one more area where large chain of schools like Delhi Public School and various other schools have to clearly show the administrative control and the mechanism of charging such fees. For example in case the Franchisee fee is being taken out in a private companies hand, then it may attract scrutiny. Related party transactions are again prominent routes for siphoning off money which is being plugged here.
The above enactments are a major milestone in Fee regulation. I hope that this article helps few policy makers to implement the much needed Fee regulation act in Karnataka, so that common man is freed of his burden of exorbitant fees.
