Establishing a school in India

Opening a school is a herculean task in India. Despite this, more and more people are coming forward to start a venture because the demand for schools seems to be unending

A school is a unique business. Unique because it cannot even be called a ‘business’.

Running a school is considered a not-for-profit venture, but you just need to look around to see that the business opportunity is huge. According to an estimate by an NGO active in the field of education, there are more than 14 lakh children in Delhi alone who seek admission every year in various classes.

Schools cannot be set up by private entities. They have to be run by a society formed under the Societies Act of 1860, or a trust under Public Trust Act as existent in different states, or by forming a company under Section 25 of the Companies Act 1956. In other words, a school has to be set up strictly as a non-profit business. At least that is the theory.

Setting up a school is not just about constructing physical infrastructure in the form of building classrooms and setting up libraries and laboratories. It does involve obtaining permissions and licenses from concerned authorities at various stages. It starts with the setting up of a trust or a society, with a governing board of five or six members, with a president, chairperson, and a secretary duly identified, as specified under the law. This article will focus primarily on identifying the various steps involved in opening a school, providing facility for the study for students from Class 1 to Class 10.

The next step

Once the governing entity, whether a company, trust, or society, comes into existence, it will have to look for land. There are two possibilities—one, if the society or trust has a land of its own, or, second, when the governing entity decides to buy a land for the proposed school. Buying land from the government requires permission in the form of a no-objection certificate from the Department of Education of the concerned state. The no-objection certificate, called Essentiality Certificate (EC), certifies the requirement of a school in a particular area. The logic behind the practice is to make sure no two schools compete with each other and one becomes redundant. The EC comes with a rider that construction must commence within three years, failing which the society will have to reapply for the same.

One can apply to the concerned municipal corporation for land for the school with the EC. Land is supposed to be allotted to the governing entity at subsidized rates is usually allotted through auction.

Which laws?

Originally, education was a state subject under the Constitution. In 1976, by a constitutional amendment, education came in the concurrent list, the joint responsibility of the central and state governments.

Even if a member on the board of a governing entity has land that the entity wants to use for setting up a school, a no-objection from the Department of Education stating the requirement of a school in that area is required. The major education boards of the country, namely, the Central Board of Secondary Education (CBSE), the Council for the Indian School Certificate Examinations (CISCE), and state government boards, have clearly laid down norms for land requirements for schools. This, in most cases, is 2 acres, except for hilly regions and metropolitan cities, where the requirement is less. Construction can take place only on a part of the land, and a playground has to be created in the rest.

From the time of forming a governing entity to a school actually starting up, one normally requires about a year, though taking more than two years is also not unheard of. Normally the infrastructure required to start up can be constructed within a period of six to seven months. Once the construction is over, school authorities need to apply for recognition. Up to Class 5 recognition from municipality is all that is required. For Classes 6 to 8 recognition comes from the Department of Education. Recognition for anything above this also comes from the Education Department, but after a minimum gap of two years. School authorities are free to seek affiliation to CBSE or CISCE. In that case, the school will have to follow the guidelines of the board it is seeking affiliation to. The school will need to follow the syllabus, books prescribed by the affiliating board, and pay specified salaries to the teachers.

If it is not a government school, affiliation for schools normally comes in stages. Initially, for Classes 1 to 6 a temporary affiliation is given and guidelines are laid down for schools by the concerned education board. Once things are in place according to the guidelines, an inspection is conducted. If things are to the satisfaction of the board authorities, permanent affiliation is bestowed on the school. Adityodaya says inspections are not so rigorous after permanent affiliation is granted, but a school has to be run according to the rules of the board.

Licenses and documents

Setting up a school involves a lot of legal processes from the very beginning. While forming a society, trust, or company, one has to have a Memorandum of Association, a document needed almost at every stage later. Like for any other business, a detailed project report for the school is also needed.. In addition, details of land and building, auditor’s statement, bank statements of the governing entity and their members and auditor’s statements are needed at some point or the other.

Once the school building is ready for initial use, a certificate of recognition has to come from the state government, issued by the municipality for the junior classes, and by the Department of Education for middle school. If high school is to be added subsequently, certificate of up gradation is required which is again issued by the Education Department. Affiliation from either the CBSE or CISCE is also done through a set process. Things do not stop here, as schools need certificates for hygiene, water, and completion of the building from the municipality.

Investment and expenditure

Investments required for a school depend on two vital components—cost of land, which depends on where you want to start your school, and whether it will be residential or non-residential. Thus, setting up a non-residential school in Delhi with over 1,000 students spread over 5 acres can easily cost around Rs 25 to 30 crore , while the costs would be lower in tier II and III cities.

Open School

An open school is a mode of catering to the needs of those who, for some reason or another, cannot continue in the regular schooling system. National Institute of Open Schooling (NIOS), formerly called National Open School, was established as an autonomus institute in 1989 by the Ministry of Human Resource Development. According to the website of the NIOS, it focuses on not just elementary education, but also on courses at the pre-degree level, both academic and vocational. It has shown a steady growth in student enrollment, number of courses, and study centers. According to the website, over 14 lakh students are enrolled with the NIOS, making it the largest open school in the world. The degrees provided by the NIOS are as much valid as those provided by any other board in India. NIOS is now cooperating with state governments to start state open schools. So far 11 states have started it, and eight more are in the process of doing so.

For residential schools, which are normally spread over 15 to 20 acres of land, costs can go quite high, as it will require hostels. A Kolkata-based school consultant who has worked with the renowned Doon School, says that the operational cost on teachers in normal non-residential schools is 70 percent, while in residential schools it is 50 percent.. Catering makes up another 30 to 40 percent of the operational cost.

The teacher-student ratio in non-residential schools, according to the consultant, should not be more than 1:20, and for residential schools it should be 1:12. However, this is hardly the case in real life and many schools run with 40 to 70 students in a classroom. Adityodaya says, “Teacher-student ratio is 1:40 in most of the schools here [Bangalore] and is 1:60 or even 1:70 in many other schools.”

There is no general law governing school fee, though different state governments have tried to regulate this from time to time. Generally, if the only source of income is the amount collected under the head ‘fees’, then it will leave a huge hole in the school’s finances. Adityodaya says, ‘Schools make most of the money from donations, if it is not exclusively for rich class where very high fees are charged. Another source of income is development fees. The amount amassed through this route is quite high compared to the actual expenditure on development.”

However, usually schools do set up separate laboratories for physics, chemistry and biology..

“While expanding to other states, a no-objection certificate from the state where one is running a school is required. This proves helpful as the concerned Education Department takes recognition of you as an established player,” Adityodaya says.

It is important to mention here a Supreme Court ruling that disallows schools from diverting the money earned to start another school.

International programs in India

International education boards in the form of the International Baccalaureate Organization (IB) and the Cambridge International Examinations (CIE) have slowly penetrated the Indian schooling system. About 50 schools already have IB affiliation or are authorized to follow the IB curriculum, and over 150 schools follow the CIE, which offers International General Certificate of Secondary Education (IGCSE) and A-levels in India. According to the regional director of IB Asia Pacific, India will have more authorized IB diploma programs than Australia by the year end.

The IB program was founded in 1968 by the International Baccalaureate Organization (IBO), a non-profit educational organization based in Geneva, Switzerland. According to information on IBO website, three kinds of IB programs are: Primary Years (Kindergarten to Class 5), Middle Years (Classes 6 to 10), and Diploma (Classes 11 and 12).

The Cambridge International Examinations (CIE), on the other hand, is a part of the University of Cambridge. It is a non-profit organization providing international qualifications, as its website claims. It offers the IGCSE, a two-year curriculum for students of Classes 9 and 10. This is considered equivalent to the British General Certificate of Secondary Education. It also offers Cambridge O-level, equivalent to the British General Certificate of Education, and the Advanced Subsidiary for Class 11. A-level program is for Class 12 students.

For schools CIE affiliation normally takes six weeks to get, but if the schools are not ready it can take two to three years, as regional director of CIE, Rakesh Singh says.. The case with IBO is more or less the same. Today, schools have the option of seeking dual affiliation—to an Indian board and to a foreign one. This has apparently made the Ministry of Human Resources consider the need to bring in some kind of legislation to regulate this.

Like in the case of the CBSE or ICSE boards, schools willing to offer a curriculum of a foreign board should obtain a no-objection certificate from the Department of Education in the state concerned. In a few states like Andhra Pradesh there is currently no requirement to get a no-objection certificate to run an ‘international’ school. According to a school authority, schools do not always follow the procedure of getting a no-objection certificate even if such regulations exist.

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