Thriving ‘school business’ experiences a slump

K.V. Subramanya

Prices drop after High Court order on medium of instruction

Sources say that every year around 50 schools are sold in Bangalore

‘The prices range from Rs. 10 lakh to Rs. 5 crore’

BANGALORE: Buying and selling of English-medium primary schools, which has been a thriving business in Bangalore for the past few years, has been affected in view of the July 2 Karnataka High Court order on the medium of instruction in schools. The high court had quashed the compulsory clause in the State policy on medium of instruction.

Since 1994, the State Government had not been granting permission for starting new English-medium primary schools. This is said to have triggered the school business, running into crores of rupees. The officials of the Education Department themselves are reportedly brokering most of the deals.

What it fetches

According to sources in the Education Department and private school managements, every year around 50 schools are sold in Bangalore and the prices range from Rs. 10 lakh to Rs. 5 crore. The price of a school depends on its student strength, infrastructure and location.

However, the prices have dropped in the past fortnight as prospective buyers are hopeful that the Government might grant permission for starting new English-medium schools in view of the High Court order. For instance, a few months ago, the proprietor of an English-medium primary school situated in 1st State, Banashankari, off Hanumanthangar, was offered Rs. 60 lakh. But he refused to sell the school. Now the price has plummeted to Rs. 40 lakh, the sources said.

In most cases, businessmen and politicians with black money are the buyers. Those who are unable to run their schools for different reasons are the sellers.

Several institutions had obtained permission from the Government for starting English-medium schools prior to the ban in 1994. Many of these schools now exist only on paper and have not even got their registration renewed. Those “owning” such schools are the sellers. The prospective buyers and sellers have even started advertising in newspapers.

According to sources, officials of the Education Department, mainly Block Education Officers (BEOs), are brokering the deals, getting registrations renewed and pocketing hefty commissions. Some persons in the private school managements are also acting as brokers.

Huge profit

What prompts people to buy schools is the huge profit involved. Apart from the monthly fees, schools also collect hefty donations and admission fees. Donations run into lakhs of rupees, the sources said.

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