Last week, UP government had announced restrictions on fee hike for schools that would apply to schools that charge more than 20,000 as cumulative fees over a year. The ordinance was to limit annual fees hike to 5% year on year and the basis for this hike was to be kept as fees applicable in session 2015-2016. Now that the Chief Minister has reportedly approved the ordinance in principle, things have become clearer.
As per the proposed ordinance, the maximum fees that a school can hike is increase in consumer price index (cpi) + 5%. The consumer price index part was unknown previously. The basis for comparison would be fees and cpi applicable in year 2015-2016. If we go by tradingeconomics.com’s figure of cpi for year 2015, the cpi was at 119 which as of March’2018 is now 136.5.
This means that the consumer price index (cpi) has risen by over 14.7% in these 3 years. If you add allowed 5% hike year on year, the overall allowed hike for any school over these 3 years is 14.7%+15% i.e. 29.7% which is almost 30%. Please note that for simplicity sake, we have not considered compounding increase which would even move this figure upwards.
We can conclude from above that if cpi (consumer price index) continues to increase at this pace, schools would thus be allowed to increase the fees by around 10% every year. This is typically the existing norm and already since last year, schools have been directed by CBSE and ICSE boards to not increase fees beyond 10% (https://timesofindia.indiatimes.com/city/bengaluru/wont-increase-fee-beyond-10-in-an-academic-year-icse-cbse-schools/articleshow/58109732.cms). Hence, while at the outset, this might look like a welcome step, the benefits that would finally reach to the parents is negligible.
Concluding the analysis, it is suggested that parents find out the increased fees in their wards school since 2015-2016 and if the fee hike is above 10% YoY, they qualify for reimbursement of fees. This however is unlikely for at least 95% of the schools that are following CBSE/ICSE directions since this year.Last updated: April 17, 2018 at 13:28 pm