In recent days, Nepal's education sector has emerged at an important juncture, where there is a deep conflict between policy reforms and professional interests. Major associations of private schools, especially Pabson, NPabson and their allies, have strongly objected to some of the provisions of the school education bill presented by the government in Parliament. They have warned that they will go on strike if the provisions of the bill are not amended, which has made the process of education reform more complicated.

Among their main objections are demands such as removing the provision to gradually transform private schools into non-profit institutions, weakening scholarship obligations (from tuition to transportation fees) and limiting local level fee control rights . This pressure has come at such a sensitive time, when the bill is at the stage of final decision in the Parliament . This makes their pressure strategic and more effective, as there is a risk that last-minute pressure could change the direction of policymaking.

constitutional approach :  The scope and boundaries of rights

The associations of private schools have linked their stance to the constitutional right to 'freedom to carry on any occupation, employment, business or trade' contained in Article 17 (2) (f) of the Constitution of Nepal. They argue that the stability of investment should be protected by recognizing private sector investment as a profitable venture, which is also ensured by the Companies Act. For them, education is an economic activity like any other business, and the excessive interference of the state in it violates their fundamental rights .

However, on the contrary, Article 31 of the Constitution has given a strong foundation to the state's side. According to this article, it is clearly mentioned that "every citizen has the right to access to basic education" and "every citizen shall have the right to get compulsory and free basic education and free secondary education". It is the responsibility of the state to implement it. Thus, there is a direct conflict between the financial freedom of the person who invests in education and the social right of the citizen to get an education . This conflict cannot be resolved only through a policy debate, rather its solution should be based on constitutional and judicial principles.

From the perspective of an auditor and financial advisor who has worked in the education sector for a long time, I would like to take a closer look at the three main issues in this debate . No fundamental right is absolute. The Constitution of Nepal itself also has a provision that fundamental rights can be restricted "according to law". In sensitive areas like education, the freedom to conduct business may be limited to ensure public interest and fundamental rights of citizens. Provisions such as fee regulation, scholarship mandates or phased ownership changes are constitutionally justified when their objective is to expand access to education for all and reduce inequality. It is a regulation of business, not a complete ban on doing business . Even in many developed and developing countries of the world, the education sector is not given full freedom as a profitable enterprise.

When large unions like Pabson or NPabson jointly pressurize to remove or amend a policy provision, it has a far-reaching impact on market competition. It can take the form of a 'cartel' or a 'syndicate'. If all the big schools come together to prevent fee control or change of ownership, it discourages small or new entrants who want to provide quality education at new and cheaper fees . Such action ultimately distorts the market and parents have fewer choices. Nepal's Competition Promotion and Market Protection Act, 2063 has also discouraged such anti-competitive activities.

No bill should be prepared in haste . The school education bill has also gone through many stages such as discussion of experts, consultation of the ministry, scrutiny of the parliamentary committees and approval of the council of ministers and has reached the parliament for final decision . Disputed provisions are included based on the debates and discussions at these stages. In such a situation, coming at the last moment and saying 'Either remove it, or we will protest' weakens the democratic method and process . This is an extreme form of political pressure, which can thwart well-intentioned reforms.

Progressive laws have been created in Nepal for a long time, but there is a lack of systems, processes and trust-building steps to implement them in practice. As a result, there is a large gap between the letter of the law and the practical implementation, which increases dissatisfaction and mutual mistrust between the government and the organized sectors . As an example, the Consumer Protection Act, 2075 can be taken, which, even after years of its passage, is still without detailed guidance and implementation guidelines. In such cases the execution is erratic and inconsistent .

This gap is more evident in the field of school education . Private schools are subject to deep and sometimes inconsistent regulation and financial burdens from all three levels of government: federal, state, and local. There are many problems they face . There are financial limits . Those private schools cannot get 'deprived sector' loan facilities and their income usage is restricted . There are also tax complications. Local taxes and property taxes are high . Lack of clarity in Section 57 of the Income Tax Act and VAT rules have complicated the day-to-day activities like canteen operations, subsidiary book sales. TDS should be deducted like commission on scholarships and fees paid to international partners should also be treated in the same manner . There is also a

operational imperative. There is a problem in the operation due to the lack of government arrangements for school parking and inconsistent monitoring at all three levels. Curriculum is restricted . Adopting an international curriculum is sometimes treated as a legal offence, which curtails educational development .

These problems are not new and all parties are aware of them . However, the main reason for not seeing a concrete solution is the deep mistrust between the government and pressure groups. The government sees private schools as profit making and regulation as the only solution for the benefit of parents . On the other hand, the private sector views the state as punitive and inconsistent, using regulation as a tool of control rather than a means of cooperation.

This lack of trust makes collaboration almost impossible. Schools lobby aggressively to stop regulations they see as threatening, while governments regulate everyone with the same vision . This situation makes even well-intentioned reforms run into resistance . 

Policy options: balance of debit and credit

If the government really wants to move private schools to a non-profit model, it should not only look at the social benefit aspect . The government should seriously analyze both the debit (cost-risk) and credit (benefit-opportunity) sides of the balance sheet. 

Converting from a for-profit to a non-profit model reduces private schools' income . Many schools have taken loans from banks and invested in infrastructure. As the income decreases, it becomes difficult for them to pay the loan installments and meet the financial obligations .

investors have invested lakhs and crores of rupees . If the government does not address it properly, their investment will be unsafe and it will send a negative message for private investment in any sector in the future . Immediate nonprofitization increases the risk of many schools closing, putting the future of thousands of students and teaching staff in question.

To address these risks, the government should come up with special packages of transitional support . These may include measures such as phased implementation plans, tax relief, equitable methods of private school property valuation, and low-interest loans. This motivates investors to enter new models while protecting their investment .

The nonprofit model prevents the commercialization of education . Due to this, education becomes cheap and accessible, which is also the constitutional responsibility of the state. When the profit motive is low, schools can focus on improving the quality of education rather than focusing on infrastructure profit . The private sector's profit-seeking trend in the education system has reduced public confidence. The non-profit model increases public confidence in the education system . The government can use the experience and infrastructure of the private sector, where the government co-invests in the infrastructure and thereby controls school fees or scholarships .

Policymaking should not stop at just looking at deficits. The government should be able to clearly explain the aspects of 'credit', i.e. long-term benefits and opportunities, and present a plan for its implementation.

In the story of Mahabharata, Abhimanyu was skilled in entering the Chakravyuh, but not knowing how to get out, he was finally killed in the siege. The history of policy making in Nepal is also similar. Reformers enthusiastically introduce progressive provisions, get them approved by the Cabinet, and send them to Parliament. However, they are not prepared to face the siege and pressure of powerful organizations like Pabson and NPBson. As a result, silence prevails at the final stage and the improvement fails .

In this 'war' of education reform, the government should prepare not only a way of 'entering' (bringing a bill) but also a way of 'exiting' (overcoming obstacles) like Abhimanyu. For this, investors should have a clear and transparent 'exit' plan to exit their investments judiciously or enter a new model.