Demand for withdrawal of the value added tax (VAT) on the country's private universities, medical and engineering colleges has been vociferous. A left-leaning student front had been spearheading a protest rally even the day before parliament passed the budget. In the face of protests and responding to the demand, the 10 per cent VAT proposed initially in the budget has been reduced to 7.5 per cent. Whether this will satisfy the protestors is rather doubtful. The reason why the issue of tax at the source has come under attack is simple: it will make higher education costlier when, in fact, there is a need for making higher study cheaper.
Higher study in the country is more discriminatory than it appears to be from a casual look. The myth that students from affluent families study in private universities, medical and engineering colleges need to be busted. An overwhelming majority of students from rural background with lower scores have no other option than studying in such educational institutions. Students more privileged and enjoying greater opportunities in urban settings than their rural counterparts usually qualify for public universities and specialised colleges. Only a small number of students coming from rural schools and colleges nowadays make it to the public higher seats of learning. To send their sons and daughters to a private university or college, parents have to make, more often than not, immense sacrifice. Already discriminated against, students of such families are made doubly so.
It is against this background, higher education -no matter whether it is in public or private highest seats of learning -should be given a pro-poor shape. Such private facilities were supposed to be non-profit dispensation but in fact they have turned into lucrative money spinners for people sponsoring those. Sure enough, the initial investment is big but the return on it should not be irrationally high. When tuition fees and other charges of atrocious amount form the bulk of income for such educational institutions, students from poor family background take the heat. This cannot be an ideal environment for higher study.
A more rational approach would be to stop the diversion of income into various channels on this or that pretext. At the same time there is a need for diversifying the sources of income through collaboration with corporate or business houses. To that end, the private varsities and colleges should concentrate on developing a research base. They should aim high and compete with the educational facilities in the public sector. In developed countries, private universities offer quality education and the corporate world is convinced that their investment is for a worthwhile cause. Until such highest seats of learning reach that stage, they should take a long view of higher study in the country and work for improving the standard of education. Commercial consideration should not take over philanthropic mindset altogether. The need is to strike a balance between the two and reduce the outrageous charges for higher study.
VAT on private universities
FE Team | Published: July 03, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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