Delhi has formally entered a new era of private school fee regulation with the notification of the Delhi School Education (Transparency in Fixation and Regulation of Fees) Act, 2025. The law, notified by Lieutenant-Governor V K Saxena last week, establishes a three-tier committee system to audit and approve fee hikes. This move aims to resolve long-standing disputes between parent associations and school managements over arbitrary charges.
Legal Tightrope: Autonomy vs. Profiteering
The constitutional foundation for such state interventions rests on a delicate balance defined by the Supreme Court. In the landmark TMA Pai Foundation (2002) verdict, the court affirmed the autonomy of private unaided schools to set their fee structures. However, it crucially prohibited "profiteering" and "capitation fees." The court allowed schools a "reasonable surplus" for development, distinguishing education from pure commerce.
This position was later clarified in the Modern School v. Union of India (2004) case, where the Supreme Court explicitly recognized the state's authority to regulate fees to prevent commercialisation. It is within this legal framework that various states have crafted their own regulatory models, each facing unique challenges and legal scrutiny.
A Patchwork of State Regulations
India presents a diverse tapestry of approaches to controlling private school fees, with Delhi being the latest entrant.
Tamil Nadu's Proactive Fixation Model: A pioneer in the field, Tamil Nadu enacted its fee regulation act in 2009. Its model is notably rigid. A state-appointed committee, led by a retired High Court judge, proactively fixes the fee for every private school for a three-year period. While ensuring state control, this system has been bogged down by litigation and bureaucratic delays. A significant complication arose in 2012 when the Supreme Court granted an interim stay for CBSE-affiliated schools, creating a dual system where state board schools are regulated but many central board schools operate with relative freedom.
Gujarat's Hard Cap System: The Gujarat Self-Financed Schools (Regulation of Fees) Act, 2017, imposed direct monetary ceilings. It caps fees at Rs 15,000 for primary, Rs 25,000 for secondary, and Rs 27,000 for higher secondary levels. Schools wishing to charge above these limits must justify costs to a Fee Regulatory Committee with audited accounts. Although the Gujarat High Court upheld the law's constitutionality in December 2017, implementation has faced issues, including a recent controversy over a proposed exemption for top-performing schools.
The Consensus Model of Maharashtra and Rajasthan: This approach emphasizes internal resolution. Under the Maharashtra Educational Institutions (Regulation of Fee) Act, 2011, a school's proposed fee structure must gain approval from the Parent-Teacher Association's executive committee. State intervention via a divisional committee requires a complaint from at least 25% of parents. Delhi's new law seems inspired by this but sets a lower threshold of 15%.
Rajasthan's 2016 Act follows a similar school-level committee structure. However, its implementation has been notably slow. In May 2025, the Rajasthan High Court reprimanded the state government for failing to form a crucial appellate Revision Committee even nine years after the law was passed.
Judicial Backing and Delhi's Road Ahead
Private school associations have consistently challenged these state laws, arguing they violate the constitutional right to practice any occupation under Article 19(1)(g). The judiciary, however, has largely sided with regulation in the public interest.
In a significant 2021 ruling, the Supreme Court upheld the Rajasthan Act, asserting the state's power to ensure fees are "reasonable." It read down certain sections to protect school autonomy in setting fees, clarifying that the government cannot dictate the exact amount but can verify procedures and prevent profiteering.
This precedent has guided other High Courts. The Patna High Court in February 2024 upheld Bihar's law capping annual hikes at 7%. Similarly, the Chhattisgarh High Court in August 2025 dismissed school petitions against the state's 2020 law, stating that "individual hardship" cannot override public good.
For Delhi, the immediate challenge extends beyond potential legal battles. The success of the new Act hinges on the effective staffing and operation of its District and Revision Committees. As seen in Maharashtra, where the Bombay High Court barred a fee hike because the regulatory committee was non-existent, laws remain toothless without active enforcement machinery. The debate over the 15% parent-complaint threshold also highlights the practical difficulties of mobilising parents against powerful school managements, setting the stage for the next phase of this ongoing struggle.
