No Laws to school the Pre- schools: Navigating the Path to establish Private Pre-schools in India

Pre-schools, popularly called play schools in India, provide a wide range of programs like day care, after-school, playgroup, nursery, and kindergarten for children mostly in the age group of 3-6 years. This industry has witnessed remarkable growth in recent years, with millennial parents appreciating the importance of early childhood education. This article aims to serve as a guide for entrepreneurs, and professionals advising such businesses, who are considering venturing into this promising sector. In this article, we will delve into the essential legal and business aspects of operating a preschool in India.

As part of the constitutional mandate enshrined in Article 45 vide its 86^th Amendment in 2002,

"..all governments at Centre and State level must provide for Early Childhood Care and Education (ECCE) to all children until they complete the age of 6 (Six) years. Before this, India has been and is a signatory to several international treaties and agreements that safeguard the rights of children as elaborated in this article."

1990: World Declaration on ‘Education for All’, where Article 5 emphasizes learning at birth. This calls for early childhood care and initial education;

1992: India ratified the United Nations Convention on the Rights of the Child, which sets global standards for the economic, social and cultural rights of children;

2000: At the World Education Forum (Dakar), six internationally agreed education goals were recognized that aimed to meet the learning needs of all children, youth, and adults;

2010: India signed the Moscow Framework for Action and Cooperation developing legal frameworks and enforcement mechanisms that are conducive to the implementation of the rights of children to ECCE from birth;

2015: India committed to the United Nations Sustainable Development Goals or SDGs. The importance of early childhood education is highlighted in SDG 4: “Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all”.

Precisely, each goal is broken down by Targets, with Target 4.2 being, 

“By 2030, ensure that all girls and boys have access to quality early childhood development, care and pre-primary education so that they are ready for primary education”;

2022: Recently, the Tashkent Declaration and Commitments to Action for Transforming Early Childhood Care and Education has brought back attention to the need for an enhanced legal framework and increased public expenditure for ECCE.

1974: Child welfare first recognized in National Policy for Children;

1975: Consequently, a Centrally Sponsored Scheme (CSS) called Integrated Child Development Services (ICDS - Anganwadi Services) was launched by the Government of India to affirm its international commitment towards ECCE;

1986: National Education Policy recognized ECCE as a critical input for the holistic and integrated nature of child development;

1993: National Nutrition Policy recommended interventions for child care and nutrition during early childhood;

2002: National Health Policy has provided initiatives for promoting early childhood care and education;

2005: The National Curriculum Framework was rolled out which laid the foundation for National Education Policy 2020;

2009: RTE has also addressed ECCE under section 11 of the Act which states, “to prepare children above the age of three years for elementary education and to provide early childhood care and education for all children until they complete the age of 6 years, the appropriate government may make necessary arrangement for providing free pre-school education for such children”;

2012: 12^th Five-Year Plan (2012-17) redirected the focus on universalising preschool education. It also emphasized the need to address areas of systemic reform in ECCE across all channels of services in the public, private, and voluntary sectors in addition to existing ICDS (Aanganwadi Centres);

2013:National Early Childhood Care and Education (ECCE) Policy was rolled out in 2013;

2014: The National ECCE Council was set up to oversee the implementation of the said policy;

2019: NCERT developed a Preschool Curriculum for three years of preschool education along with Guidelines for Preschool Education;

2023: The National Curriculum Framework is now being redesigned which reaffirms the national commitment to early childhood care and education covering pre-schooling requirements in the foundational stage (3-6 years).

Despite having a considerable number of private pre-schools mushrooming in both urban and rural areas, there is no strict implementation of registration rules for said schools in India. In this article, we have attempted to identify the rules and regulations governing the establishment and operations of private preschools in India.

In this context, it is important to discuss that the 42^nd Amendment, 1976 to the Indian Constitution proved to be pivotal in terms of regulation in the education sector, being one of the five subjects which were transferred from the state list to the concurrent list. The 42^nd Amendment essentially made ‘Education’ a concurrent subject empowering both the Centre and State to legislate on any aspect of education. However, in case of any dispute, legislation formed by the Central Government will have overriding authority and by having education in the concurrent list, the Central Government has the power to implement directly any policy decisions in the States.  This brings us to the point of examining rules and regulations at the Central and State levels to regulate play schools.

National Early Childhood Care and Education (ECCE) Policy in 2013

Under incessant national and international commitments towards health, education, and development of all children below 6 years of age, India adopted National Early Childhood Care and Education (ECCE) Policy in 2013 vide Resolution No. 6-3/2009-ECCE dated 27^th September 2013 bypassed by Ministry of Women and Child Development, Govt. of India).

In line with the mandate set out in the said policy, the National ECCE Council was set up in 2014 as a national-level organization under the Ministry of Women and Child Development, Government of India for providing systems of training, curriculum framework, standards, and related activities; and promoting action research to improve the field of early childhood care and education. In ECCE policy, appropriate authorities and the National ECCE Council along with the National Commission for Protection of Child Rights have been entrusted with the responsibility to make necessary arrangements for such monitoring and supervision.

Evidently, the rules for registering a pre-school are available only in Andhra Pradesh, Jharkhand Tamil Nadu, and Maharashtra but are not fully developed or rather implemented in other states.

Age Group: At the Central level, NCPCR guidelines clearly state that no child shall be admitted to the pre-school before the child attains the age of three. On the contrary, States like Tamil Nadu and Maharashtra have taken a departure from these guidelines by stipulating minimum limits as 1.5 and zero years under respective state rules.

EWS: In Society For Un-Aided P.School Of Rajasthan vs UOI & Anr on 12 April 2012, the Supreme Court of India upheld the constitutionality of section 12 of the RTE Act, which requires all schools, both state-funded and private (except private, un-aided minority schools), to accept 25% intake of children from disadvantaged groups. However, NCPCR guidelines and State-specific rules are silent on reserving 25% in private pre-schools.

Not for profit: Though not debarred under any law, judicial precedents and RTE Model Rules, 2010, and various Central and State level affiliation board rules call for the establishment of schools not for profit purposes only. In line with this practice, clause 2(m) of NCPCR guidelines defines the term ‘Organisation’ means a trust/society or not-for-profit company that can apply for a grant of recognition for a pre-school. In contrast to this, state rules for Tamil Nadu and Maharashtra allow registration of pre-schools run by private companies/proprietor/partnerships as well. 

Residential Property: NPCR guidelines clearly state that the preschool should only be used as a non-residential facility functional only for 3-4 hrs in a day and should include ‘Play School’ in its name. While Jharkhand rules have imbibed this guidance, other States have not incorporated this. Impliedly, this does not put an explicit restriction on running private pre-schools in a residential area.

As per the Income Tax Act, no exemption is available to private pre-schools running for profit. On the other hand, entrepreneurs who intend to run private pre-schools in India must note that as per Sr. No. 66 of Notification No. 12/2017-CT, dated 28th June 2017, under Heading 9992, supply of preschool education service to its students against fee would be exempt under GST. However, any income derived from the preschool business via a franchise model would attract GST at the rate of 18% on “Franchise Fees” and “Royalty” received under the franchise agreement for the right to use the trademark, brand name, and other proprietary knowledge under Heading 9983 “Other professional, technical and business services” and Service Code (Tariff) 998396 “Trademarks and franchises”.

In summary, preschools are presently governed by the National Early Childhood Care and Education (ECCE) Policy in 2013 read with regulatory Guidelines for Private Play Schools developed by the National Commission for Protection of Child Rights. Also, NCERT has released ‘Guidelines on Preschool Education’ which provides the details of infrastructure, play material, indoor and outdoor play spaces, classroom organization, manpower requirements, duties and responsibilities of preschool staff, records and registers to be maintained, parent and community participation as well as on developing strong linkages for smooth transitions to primary grades.

We are of the view that the National Educational Policy, once fully implemented, should address these lacunas as it envisages covering all preschool programs, regardless of whether they are operated by private, public, or charitable organizations under a regulatory and accreditation system. The multidimensional nature of implementation and impact of ECCE policy demands well concerted approach and commitment of all ministries and departments of health, education, women and child development, and social justice at all levels to regulate private pre-schools in India. Various means of verification such as Management Information Systems, independent surveys, etc. may be adopted. Unified District Information System for Education Plus (UDISE+) should be given more teeth and technology to have at least a robust quality rating-based database on private pre-schools in India.

Indian State Governments can also draw wisdom from models implemented in other countries namely licensing requirements stipulated under Education (Playgroups) Regulations 2008 in New Zealand, Child Care Act 1991 (Early Years Services) Regulations 2016 of Ireland,  where pre-schools have to register with Tusla (Child and Family Agency) or a license required under Early Childhood Development Centres Act and Regulations in Singapore. 

Commercially speaking, for an entrepreneur, starting a preschool in India (which has hit a market size of US$ 3.8 Billion in 2022) can be extremely rewarding provided that the corporate structure is in compliance with the applicable laws in terms of registration, curriculum, and infrastructure as discussed in this article. In order to give further impetus to the growth of this sector, there is an apparent clamor to strengthen the laws and regulations for the registration and operation of pre-schools in India through harmonization of Central and State regulations governing this subject.

Priya Mamgain is a Partner, Sweekrithi Chandrashekhar is a Senior Associate, and Abhishek Malhotra is an Associate at Saga Legal.