Private schools may be better than government schools, but their quality is still poor. Why?

Our education laws make it expensive and difficult to set up and operate a private school. The Right to Education Act 2009 and 145+ state education laws dictate the following for all private schools: size of the land for building a school (sometimes as high as 2 acres), nature of building (and often colour), classroom size, necessary play and learning equipment, design of staircases, number of library books, the number of teachers they should hire and who they can fire, teacher salaries (that tend to be above market rate) and qualifications, toilets and water facility, and instruction hours. This list is not exhaustive. There are several other conditions on operational matters, fee structure, and ownership norms. To affiliate with boards, schools must meet additional requirements. In Delhi, for instance, a school must submit 125 documents to obtain the necessary permissions. Their documents move through almost 155 steps and involve more than 40 officers in the Directorate of Education. It can take over 5 years to set up a school. These requirements create barriers to entry and impose costs that are largely unrelated to learning outcomes.

Meeting these requirements considerably raises the cost of running private schools. In Assam, to comply with the land requirement, schools need at least INR 30 lakh. Schools in Haryana report spending over INR 20 lakh in bribes every year. While some schools respond by raising fees, those that serve low-income communities cannot do so beyond a certain point. They struggle to break even. Between 2015 and 2018, governments across India sent closure notices to around 13,500 private schools for failing to comply with regulatory norms. Around 2,500 of those schools shut down. This wave of closures hit budget private schools that serve low-income families the hardest.

The risk of closure discourages people from setting up schools. Those who do are starved of resources once they meet the norms. Since only a few players can enter the market, the competitive pressure for quality is low. Schools spend a large amount on complying with costly input norms and lining the pockets of bureaucrats. Little remains to improve learning outcomes or respond to the demands of parents and children. All this continues even as multiple studies indicate that infrastructure norms have minimal to no impact on educational outcomes.