ASSOCHAM seeks higher outlay for education in Budget

“The Union Budget 2018 would be the first after imposition of GST… A time has come for correcting the distortions which were earlier brought in by repeated amendments in the Service Tax for Education Sector. The  last amendment brought in March 2017, denying tax relief for listed services for higher educational institutions; needs to be immediately withdrawn and end the untenable discrimination against higher education institutions, ’’ the Chamber said in a letter to the Finance Minister by its Secretary General D S Rawat.

Besides, tax exemption on construction, maintenance and repair of buildings of educational institutions be granted, it said.

The chamber said that no reason was advanced for the sudden disruption in the age old parity of higher educational institutions, universities, research institutions all with higher secondary schools etc in the matter of limited tax exemption  made available to primary school upward to higher secondary level.

“Educational institutions constitute a composite tree-root, stem, branch, - from primary schools to colleges, professional institutes, universities, research institutions.  Together they are all inter-dependant and integrally inter-related for the national education system as a whole.  Any distinction to separate the higher education institutions from the building blocks in the pyramid–primarily, middle, secondary   and higher secondary schools–would be invidious and untenable.  Most of the higher education institutions and the numerous private universities which have come up after legislative charges in Centre and State in the last decode are facing serious financial problems with their huge capital requirements, non availability of concessional finance etc”.

The ASSOCHAM letter to the Finance Minister said that unable to make both ends meet, the higher educational institutions have neither the capacity to absorb the new tax burden nor the power to pass on the same by increase in fees to students, with external state regulation and risk of agitation in the campus.

The chamber also sought increased Budget allocation for the education sector. From Kothari Commission to the recent Subramanian Committee (Set up after the 2016 National Policy of Education) the expert recommendation and national view had been for a minimum public outlay on Education of 6% of GDP. 

Actual public expenditure over the years (even after the additional revenue garnered through levies of Education Cess Surcharges for education) had been however only around 4%. 

There is a crying need, more so now for higher public expenditure on education at all levels – from schools to universities, advanced research institutions. 

With the abysmally low international ranking of some of our best known institutions and universities there is simultaneously a crying need also for building centres of excellence – Subramaian Committee recommends setting up of 100 such centres both in public and private sectors in the next decade.