The parliamentary standing committee on HRD has recommended imposition of maximum penalty of Rs one crore on those technical and medical institutions which charge capitation fees from students.

The panel has, however, left it to the government to fix maximum and minimum penalty for violations in this regard.

The committee has also recommended that different penalties be imposed for different violations in proportion to the offence, and asked the department to work out the quantum of penalty on a case-to-case basis and not on a uniform basis.

"A major and minor violation cannot be treated as equal and a uniform amount of penalty for all types of offences is against the principle of natural justice," it observed.

The committee, in its report on prohibition of unfair practices in technical education institutions, medical educational institutions and universities bill, 2010, has held that smaller penalty on institutes charging capitation fee will not be considered an effective deterrent, going by the high rates of capitation fee charged by them for seats in medical colleges.

The panel also recognises the need for specifying a minimum penalty for violations, as it feels that all violations under the act be treated as serious, as they affect the interests of students and may put their future at stake.

It has also felt the need for having more medical institutions in the country to help bridge the gap, as it felt the practice of charging capitation fee was directly related to the shortage of sets in medical institutions.