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For-profit schools may be way to quality education
Posted Date: 14 Jan 2008 Resource Type: Articles/Knowledge Sharing Category: General
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Posted By: SajithkumarS Member Level: Diamond
Rating:  Points: 5
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Prabhat Jain, owner of the Pathways World School in Gurgaon, boasts of the air-conditioned classrooms in his school, its Olympic-size football field and 32-acre campus. But he also gets right to the point when asked about his intentions in opening the 600-seat school: profit.
“My school is run like a company. I have put Rs100 crore in it,” said Jain, who dreams of publicly listing his school.
Sarla Holdings Pvt. Ltd, which has a sister company with interests in mining and manufacturing, runs the school as an explicit for-profit venture—a rarity in the booming sector of private schools in the country.
That might not be a rarity for much longer. In fact, development economists and business leaders alike say privatizing education may be the only way to fix a sector plagued by corruption, mediocrity and inaccessibility.
The problem, they say, is that most states have archaic laws mandating schools operate as non-profit trusts or societies in order to gain the Central Board of Secondary Education (CBSE) accreditation.
“For a long time, education was neglected by entrepreneurs and businessmen. It was seen as a charity or social cause,” said Ramani Sastri, who owns the Canadian International School in Bangalore. The private school charges annual tuition of Rs5.15 lakh and is run as a trust owned by Sterling Developers, a real-estate company. “But quality education comes at a price. It is a business proposition.”
Sastri said he would prefer to work as a for-profit enterprise. He plans to start a 42-acre, 600-seat school in Mumbai in 2008, which will operate as a for-profit private
Pathways World School in Gurgaonlimited company.
Maharashtra and Haryana are among the few states that allow schools to be operated for profit.
At least 500 schools open in India every year, according to a DSP Merrill Lynch report released last month.
The report does not split government or private schools, although a separate estimate says about a growing one-third of all schools in the country are private.
India currently has 200 million school-attending children and one million schools. The government said that education is the second-biggest expenditure by Indian households, after food, ahead of clothes or shelter.
Most schools in India have historically run as charitable trusts or societies, mandated by law in some states, as well as by CBSE, a body which conducts standardized class 10 and 12 examinations. Trusts cannot technically profit, but they can reap benefits such as discounted land and exemption from income tax; they can also pay their trustees. Non-profit schools file their accounts to a registrar of societies or a charity commissioner, away from public gaze.
For more details, visit http://www.livemint.com/2007/05/10020104/Forprofit-schools-may-be-way.html
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