The decision to give enhanced grant-in-aid to the schools was taken at a meeting Chief Minister Sheila Dikshit had with Education Minister Arvinder Singh Lovely and top officials of his department.
Officials said the grant-in-aid from now on will depend on number of students and teachers.
They said aided middle schools and aided secondary schools will get more allocation if they are upgraded to secondary and senior secondary levels respectively.
On how much allocation will given to a school, they said details are being worked out.
Earlier this year, the government had decided to take up construction of 30 new school buildings as part of plans for much-needed expansion in its educational infrastructure.
The government has decided to upgrade infrastructure in the schools run by it to ensure proper implementation of the Right To Education which makes it mandatory for the government to provide free education till class VIII.
Presenting the budget for the fiscal 2011-12, Dikshit had said her government was committed to the Right to Education Act, and is planning recruitment of more educational staff, opening of new schools and ensuring that private schools give the mandated representation to children of weaker sections.