CBSE changes Norms to check Franchise Model, Rich Schools

The Central Board of Secondary Education ( CBSE ) has changed its by-laws to give itself more control over what it calls ‘commercialization’ of schools. The board has taken cognisance specifically of those schools which are operating on the franchise model and generate or pay royalties.

A new clause added under chapter IV rule 19.1 (ii) (a) states, “Any franchisee school making payment of account of use of name, motto and logo of franchiser institution or any other non-academic activities would be termed as commercialization of institution”.

Since commercialization of education, which basically means profiting and running it like a regular business, is not permissible under the current laws, the board is ensuring that it does not get caught on the wrong foot if any litigation were to arise.

In India, education trusts or societies do not even use the word ‘profit’ or ‘loss’ on paper to avoid it sounding like a business venture. Politically correct replacements like ‘surplus’ or ‘deficit’ are used instead. The board has now asked all schools working on a franchisee model to submit an affidavit stating that “the school / society has not entered into any such contract to use name, logo, motto for consideration of fee”.

Even for schools which are managed by the same society or trust have come under the scanner as surplus funds are then used up in personal capacity by the trustees. It is common practice for such schools to pay hefty ‘consultation fee’ to the trustees or relatives of trustees, who are basically owners, from the society’s funds. Money is also used up to arrange for meetings, buy or lease vehicles for trustees, trips etc which is basically a means through which the profit is divided among the owners.

A school’s owner told TOI that this practice should not be judged as unethical because the current laws have unrealistic expectations. “We have purchased land at market prices, built the infrastructure from our own investments, paid utility bills, salaries and market the product. In every sense of the word it is a business and no matter under what illusion the government operates, every business is done for profit. ”

“With profit comes performance and then quality. This is proven when you look at the pathetic condition of government schools where it is done on non-profit basis,” said the owner who operates a CBSE school just outside city limits.

CBSE has warned schools that “no part of income from the institution shall be diverted to any individual in the trust / society”. The board has added a clause now which gives it powers to audit the financial records of any affiliated school.

Also every school has been asked to maintain its account according to guidelines issued by the Institute of Chartered Accountants of India. CBSE says the surplus income must be used for promoting the school.

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