Education sector turned for-profit by business groups, politicians -Governance Now

Education sector turned for-profit by business groups, politicians

Though the sector continues to receive benefits marked for the non-profit sector, it has become a thriving business for investors

Trithesh Nandan | July 10, 2013

With the entry of business groups and politcians with money, the education sector has become a core of profit maximisation in the recent years, a new report released by the Voluntary Action Network of India (VANI), an NGO says.

The report, titled 'Status of the Voluntary Sector in India', notes that educational institutes, registered under the Societies Registration Act or Section 25 of the companies Act (both giving significant tax exemptions), are roaring for-profit enterprises garbed as voluntary organisations.

“The majority of private institutions are run by two sets of entrepreneurial social groups – business people and politicians – who are in the game for one simple reason: higher education is a great business opportunity,” said the report.

It also notes, “While India’s laws require higher education institutions to be non-profit entities, nearly all are eager and impatient predators.”

The report called for the government to weed out such organisations that are founded on corporate principles. The report emphasised that the government should come out with a policy to establish values of voluntarism and not-for-profit.

“The government does not consider them as separate entities and they are treated equally as any small or medium voluntary organisation that is providing voluntary services,” it added.

It also said that the education institutes and religious groups are among the largest recipients of foreign funding. "Nearly 19 per cent (Rs 1,276.56 crore) of the foreign funds are pumped into education sector and religious bodies,” said the report.

“While voluntary sectors have been contributing a great deal in the remotest locations of the country for the upliftment of the marginalised, it is the same group which is a victim of negativism,” said VANI CEO Harsh Jaitli. He added that the voluntary sector has been facing the brunt of cancellation of registration by the government.

In the recent past, registration of 4,138 NGOs has been cancelled. The list shows that Tamil Nadu has the maximum number of cancellations at 794, followed by Andhra Pradesh (670), Kerala (450) and Maharashtra (352).

“We are just victim of negative generalism,” said Jaitli.

The report recommended a nodal ministry for the voluntary sector based on the guidelines of steering committee report of 2012.

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