Research explored the regulatory regime, both 'on paper' and 'in practice', for private unaided schools serving low-income families ('budget' private schools), in Hyderabad, Andhra Pradesh, India. Interviews were conducted with school managers, teachers, parents, and senior government officials and politicians. A Supreme Court Judgement rules out profit-making in the schools, although, in practice, interviewees said this was widely ignored. At the state level, extensive regulations govern all aspects of a school's work. In practice, government officials reported, however, that only four regulations need to be met, but none of the recognised schools met more than two of these. In practice, there may be too few inspectors and a culture of bribery and corruption. A possible way forward is described, of private self-regulation, based on findings concerning parental accountability.