The quality of pre-schools will improve with the Government's greater presence in the market. Fee hikes will also be stemmed, said industry observers and players.
But some also noted that this could lead to fewer choices for parents as smaller players get squeezed out, and extend the stress of preparing for the Primary School Leaving Examination (PSLE) to pre-schoolers.
Prime Minister Lee Hsien Loong had announced at the National Day Rally on Sunday that the Ministry of Education (MOE) will run 50 kindergartens by 2023, more than three times its current 15.
They will be part of an additional 40,000 full-day pre-school places - many of which will be provided by operators that receive government funding.
With this, as well as other new measures announced that day, the market share taken up by pre-schools supported or run by the Government would increase to two-thirds by 2023, up from half.
PM Lee said setting up more MOE kindergartens would allow the ministry to "make a bigger impact beyond its own MOE kindergartens, to influence and uplift the quality of the whole sector", which has about 450 kindergartens.
MacPherson MP Tin Pei Ling, deputy chairman of the Government Parliamentary Committee for Social and Family Development, agreed.
She told The Straits Times: "The Government has the resources and as the sector regulator, it sets the quality standards to be met. This puts it in a good position to ensure that the pre-school education in its MOE kindergartens is well delivered, and would set a quality benchmark for the rest of the kindergarten sector."
National University of Singapore economics lecturer Kelvin Seah said: "Private operators would have to respond by either increasing the quality of the education offered or by bringing down their prices."
But some industry players said the new moves suggest it is only a matter of time before the Government takes over the pre-school sector, and parents will be left with fewer options.
Eshkol Valley Preschool managing director Vincent Yap said: "Tripling the number of MOE kindergartens suggests that the Government is probably revisiting its position on nationalisation of the pre-school sector, especially that for the five- and six-year-olds."
PM Lee had said at the National Day Rally in 2012 that the sector will not be nationalised, as having a mix of operators offers diversity, which is "useful for parents because different parents will have different views (of) what their kids need".
Ang Mo Kio GRC MP Ang Hin Kee, executive secretary of the Education Services Union which represents pre-school teachers, said having more MOE kindergartens could lead to small kindergarten operators - which are already seeing declining enrolments as more parents prefer full-day childcare services - struggling to attract teachers and maintain quality.
While this could result in the turfing out of mediocre schools, it could also mean players that offer more niche curricula may be squeezed out too, unless they increase fees.
Dr T. Chandroo, chief executive of pre-school chain Modern Montessori International, said the pressure to attract good talent could drive up costs.
Another unintended effect could be that MOE kindergartens may find it tough to prevent the competitive nature of the primary school experience from filtering down and affecting younger children, said Dr Denise Lai, founder of pre-school operator Wee Care (Singapore).
"Some parents will see MOE kindergartens and primary schools as one whole, geared towards preparing for the PSLE," she said.