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Special team probing black money set to crack down on unaccounted funds in education sector

A special team tasked with investigating black money is set to crack down on widespread use of unaccounted funds in the education sector by way of donations and capitation fee.

india Updated: Mar 16, 2015 01:19 IST
Sanjib Kr Baruah
Sanjib Kr Baruah
Hindustan Times
black money,SIT,donations

A special team tasked with investigating black money is set to crack down on widespread use of unaccounted funds in the education sector by way of donations and capitation fee.

The special investigation team (SIT) met Saturday and discussed ways to detect, curb and recover illegal wealth finding its way into educational institutions -– from schools to colleges, sources said.

“There is substantial black money changing hands mainly through cash transactions in the education sector. It is usually in the form of big amounts that are not stated in balance sheets,” a source familiar with the developments told HT.

There are no official figures available but a private study by the Mumbai-based Centre for Research and Prevention of Computer Crimes in 2014 said the business of education generates Rs 48,400 crore of black money annually.

As a first step towards cleaning up the sector, the SIT would likely ask state governments to draw up lists of private educational institutions so that suspicious cases could be investigated, sources said.

The BJP had in its poll manifesto promised a war on black money stashed abroad and the Modi government ordered setting up of the SIT in line with a Supreme Court order. The team’s mandate has since been expanded to also focus on the parallel economy thriving at home.

This is the first time that education sector is focus of a black money probe. So far overseas accounts, real estate and mining sectors got the attention.

Couched as development charges, huge sums are asked as capitation fee -- typically in cash-- by schools and colleges, especially those offering engineering and medicine courses, from aspiring students to secure admissions. Donation route is also offered.

“If the government is able to tackle the problem, it is a very welcome move,” Arun Kumar, an expert on black money, said. “The problem is huge in the professional colleges and is also percolating rapidly into universities as well,” Kumar, a teacher at Jawaharlal Nehru University, said. The menace of black money had hit the quality of education as well, he said.

The biggest challenge, however, was that many educational institutions had close political links. “So the government has to depict the right political will to eradicate the problem,” Kumar said.

The education sector is expanding rapidly but not enough for a huge young population aspiring to a better life. Admissions are fought fiercely and money power is part of the game.

Taking note of the problem, the Supreme Court had in August asked former law minister Salman Khurshid to suggest a mechanism to combat the menace of capitation fee.

“We take judicial notice of the hard reality that charging of very high capitation fee is very much prevalent in spite… of specific observations/directions issued by this court,” a bench of justice FMI Kalifulla and justice Shiva Kirti Singh had said.

Though some states have drawn up laws and various court orders have declared the practice illegal, school and colleges continue to ask for donations or capitation fee.

First Published: Mar 16, 2015 01:00 IST