Government cracks down on private schools’ arbitrary practices; annual fee hike capped at 5%.

October 2, 2026

The Punjab government has tightened regulations governing fee increases by unaided private schools with the annual increase now capped at 5%. The Punjab Vidhan Sabha passed the Punjab Regulation of Fee of Unaided Educational Institutions (Amendment) Bill, 2026 on August 10, 2026. The measure had earlier been brought into effect through an ordinance from July 13. The Punjab government has said the move is aimed at improving transparency in private-school fee structures and reducing the financial burden on parents.

5% Cap Covers Compulsory Charges

Under the new framework the 5% ceiling applies not only to tuition-related charges but also to various compulsory fees and funds collected by schools.

These include development fees, annual charges, activity fees, smart-class and technology charges, laboratory and library fees, examination charges and other mandatory payments. Transportation charges may also be included in the fee calculation under specified circumstances.

The objective is to prevent schools from increasing the overall fee burden beyond the permitted limit by raising different charges under separate categories.

Approval Required for Hikes Above 5%

A private school seeking to increase its fees by more than 5% in an academic year will have to obtain prior approval from the designated regulatory authority.

The school will be required to explain the reasons for the proposed increase and submit relevant financial information. Authorities can examine the school’s expenditure, facilities and financial records before deciding whether the additional increase is justified. The framework also provides for forensic audits of school accounts in certain cases.

Previous Three Years’ Fee Records Under Review

The regulations also provide for scrutiny of fee increases during the preceding three years. According to the government, if a school’s cumulative fee increase during this period exceeds 15%, the excess collection can be reviewed and parents may be entitled to a refund or adjustment.

The Punjab government had also provided for scrutiny of fee records covering the previous years. However, implementation of retrospective recovery has faced legal challenges, with the Punjab and Haryana High Court issuing notice on petitions against the provision. The government told the court that retrospective recovery would not be carried out until the next date of hearing.

Around 7,800 Schools and 32 Lakh Students in Framework

According to the Punjab government, the new fee regulations cover approximately 7,800 private unaided schools, serving around 32 lakh students across the state. The punjab government has said the policy is intended to prevent sharp increases in school fees and other mandatory charges at the beginning of each academic session.

Parents Cannot Be Forced to Buy Uniforms From Specific Shops

The new provisions also address the purchase of school uniforms, books and educational material. Schools can prescribe the colour, design and specifications of uniforms, but parents cannot be compelled to purchase them from a particular shop or vendor.

Similarly, schools cannot force parents to purchase books or study materials from a specific shop or publisher. Schools are required to provide at least three options of publishers or vendors, according to the framework described by the punjab government.

Penalties for Violations

The regulations prescribe financial penalties for schools that violate the fee rules. A first violation can attract a fine of up to ₹50,000, while a second violation can result in a penalty of up to ₹1 lakh. Repeated or serious violations can lead to stronger action, including cancellation of the school’s recognition or affiliation.

Private School Associations Raise Concerns

Private school associations have expressed concerns over the 5% cap and the provisions relating to refunds for fees collected in previous years. In July, representatives of private-school organisations warned that they could pursue legal action and called for consultations with stakeholders on the regulations.

The new legislation therefore places private unaided schools under a more closely regulated fee framework while giving district-level authorities a greater role in reviewing fee increases and enforcing compliance.