The business for school and education in general has seen a monumental increase in India. The present scenario is witnessing a never-seen-before proportion of investments from private corporates and foreign investment firms. The business for school in India has gone beyond the realm for just boarding schools or international schools. Now, many city-based (10+2) schools are being financed by a number of corporates and have become an integral part of the Indian higher education. This change has come about with the government lifting many hurdles that used to hinder foreign investments. However, currently, there are still some legal issues that inhibit the business for schools from expanding across the nation..
For example, it is still not possible for the non-profit companies that are covered under Article 25 of CRA — Companies Registration Act, i.e. including industry associations from setting up institutions or get a recognised university prominence/recognition from the UGC — University Grants Commission. By adhering to such policies, business for schools is being hampered which eventually limits the spread of quality educational institutions in the country..
Limitations to Business for Schools in India
There are still many reservations towards the expansion of business for schools in India regionally, i.e. some of these limitations are state-based and some of the restrictions have been levied by the central government itself. For example, educational institutions can be set-up in India only by recognised trusts/societies/charitable companies. However, the profits earned from such business from schools can’t be diverted outside the organization and have to be reinvested to a certain extent..
Now, these sorts of laws only hamper business for schools from further developing. This has a two-pronged negative affect on the education business scenario in India..
This sort of restriction hinders the educational institutes from spreading out and instead encourages the investors to delve into falsified accounting methods to spread out their profits from the established institution. Further, such policies discourage foreign investments. There are some states that are working towards answering this issue. For example, the state of Maharashtra is making sure that it encourages the business for school in their urban and semi-urban centres as it plans to limit the application of the above-mentioned clause. This would mean that the non-profit, Section 25 companies would be allowed to set-up educational institutions in India. This clause alteration still doesn’t affect the primary education sphere.