October 21, 2010

School Deregulation: An Erosion of trust

In its most recent report on the education sector, IDFC SSKI quotes Union HRD minister Kapil Sibal as saying: “We cannot have companies listed on the stock exchange to run educational institutions and pay dividends to shareholdefrom the fees parents pay. We cannot allow education to be subject to risk factors.” But it’s happening, whether it’s a listed company or, in several cases, a non-profit trust.

In its steadfast, principled intentions, the trust model works. Paul Machado, principal of Campion School , a private ICSE board school in South Mumbai, is against privatisation of education, as he feels it is not a commercial activity. “Our charitable trust collects tuition fees to maintain the institute,” he says, adding that he fails to understand why some schools would need to outsource their management and operations. “These are the loopholes in the system that lead to corruption,” he says.

But there are others who say it is naïve to believe in the trust model anymore. Madhav Chavan of Pratham likens the current non-profit trust structure in schools to prohibition: it encourages illegal trade and manufacturing, people still drink, and the only loss is that of tax revenues for the state. “It’s hypocrisy to say schools can’t make profits,” says Chavan.
“Everyone ultimately makes money except the government.”

It’s why many educationists say deregulate the sector and do away with the non-profit trust structure. Allow management companies to bring in private capital, which can enable more and better schools. “It is better to regulate schools by allowing them to be profit-making,” says Chavan.

This, he says, will make the system more transparent and draw in private capital.One of the ways the government can regulate schools is through the recent quota system, wherein all schools are required to enrol 25% of students from the weaker sections.


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