Even China allows for-profit private schools
In India, schools cannot be run as for - profit enterprises. They have to be run as trusts or not-for-profit entities. In essence, it means that the profits earned from schools should be reinvested in school itself and cannot be taken out for other purposes.
The reasons for such regulation are many. I discussed them in my book - UnpackED: The black box of Indian school education reform.
One of the justifications for not allowing for profit enterprises is the deep distrust in the private entities. The argument is that the for profit entities would exploit the poor. Normally, this line of reasoning is expected from capitalist skeptics or communists.
Given this context, one would expect the so called communist country, China, which is also among the top countries in PISA, to ban for-profit private schools.
The reality is that China doesn't ban for-profit private schools. Even China allows for-profit private schools to exist and deliver education.
Clearly, we need to think beyond ideological insecurities.