Restrictions on for-profit education in India mainly stem from Supreme Court verdicts, Model and state Right of Children to Free and Compulsory Education (RTE) Rules, and board affiliation norms.

For both, K-12 and higher education, the following two court judgements regulate the ability of educational institutions to run for-profit.
Unnikrishnan v. State of Andhra Pradesh, 1993: The Court established education as a symbol of charity and disallowed educational institutions from engaging in “profiteering.”1

Education in India is a concurrent subject. Both Union and state governments can regulate school education. This has led to varying rule-sets across states. We compiled existing rule-sets for all states in India using legislation listed on the State Department website and online sources including Laws of India, Manupatra, Bare Acts Live and Latest Laws.

There are inherent information asymmetry problems in education that are characterised using the lens of the principal-agent framework. Principal-agent problems exist when the principal hires an agent to act on her behalf but the interests of the principal and the agent are not perfectly aligned. This necessitates that the principal has information to monitor the agent’s effort. Typically, in education, there is information asymmetry between parent-child, teacher-child, parent-school/teacher, parent-administrator, administrator-administrator, and administrator-teacher.

The Kasturirangan Committee Report 2019 proposes that “the three distinct roles of governance and regulation, namely, the provision/operation of education, the regulation of the education system, and policymaking, will be conducted by separate independent bodies, in order to avoid conflicts of interest and concentrations of power, and to ensure due and quality focus on each role.”

The Draft National Education Policy (NEP) 2019 has created a renewed focus on reforming the governance of school education in India. To build an effective governance architecture, particularly executing the separation of functions within a state education department, we need to collect evidence on how different actors in the system operate. Given the limited information on this subject, we undertook a 6-week project to map the anatomy of K-12 governance in three neighbouring states: Delhi, Haryana and Uttar Pradesh.

At the start of this project, we asked four questions:

The government has the power to write rules, apply standards, recognise schools, withdraw recognition, and resolve disputes. Our paper teases out the discretionary powers conferred to the state governments for the regulation of education. We study the use of discretionary powers at three touchpoints—the government as a licensor, fee regulator and inspector of private schools.

The debate on low learning levels has spurred several actions by the state. India has enrolled to participate in the 2021 round of PISA. The NCERT has defined grade level learning outcomes for languages (Hindi, English, Urdu), mathematics, environmental studies, science and social science up to the elementary stage. NITI Aayog is developing an index to `institutionalise the focus on improving education outcomes' including learning, equity and access based on information generated by NAS, the largest national assessment survey in the country.

Prior to the passage of the Right to Education (RTE) Act 2009, government registration or recognition of private schools was not mandatory in most Indian states. The Act has drawn heavy criticism for its impact on recognised and unrecognised private schools across India. Its uniform input-oriented regulatory approach does not pay attention to the fact that children from all socioeconomic classes attend private schools.

Separation of Powers is one of the foremost principles of good governance, and it states that the rule-maker, rule-executor and adjudicator should be distinct from each other. Such a separation installs checks against conflicts of interest and abuse of power by regulatory authorities and increases institutional accountability for outcomes.

Called “Faces of Budget Private Schools,” the BPS report 2018 is an attempt to explore both the data on the current education challenges and needs and also bring to light individual stories from the stakeholders in the system to set the data in perspective.

The Report consists of 3 main sections, which look at 'Reach and diversity', 'Solving the problem of quality' and 'Educating children for an uncertain future'