Soon, Rs 1-crore penalty for demanding capitation fee

Parliamentary panel suggests penalty be doubled from Rs 50 lakh; govt agrees

New Delhi, August 1
The stage is set for chargers of capitation fee to be penalised Rs 1 crore per offence. The penalty will be prescribed under the pending Prohibition of Unfair Practices in Technical Educational Institutions, Medical Educational Institutions and Universities Bill 2010 which was cleared by the Parliamentary Standing Committee on HRD today.
The committee has said the proposed Bill should be modified to cover middlemen who collect capitation fee and has asked the government to raise the penalty for institutions that demand and accept capitation fees.
“A penalty of Rs 1 crore for charging capitation fee will act as an effective deterrent for institutions and individuals indulging in the practice," the committee said in its report on the Bill tabled in Parliament today.
HRD Ministry sources told The Tribune today that 35 of the 44 suggestions made by the committee were being accepted, including the one on raising the penalty for capitation fee and prescribing different penalties for different unfair practices.
In its present form, the Bill, introduced in the Lok Sabha on May 3, 2010, and referred to the parliamentary committee on May 13 last, prescribes the same penalty - Rs 50 lakh - for all unfair practices including doing things contrary to those disclosed in the prospectus; demanding capitation fee; refusing to return documents; misleading and untrue advertising.
The committee said, “Uniform penalty for all offences is against the principle of natural justice." Besides, the panel has asked the Kapil Sibal-led ministry to define "capitation fee" in the law.
“Normally, students are charged capitation fee in the name of "other charges". These other charges must be specified to prevent institutions from charging these as capitation fee," the report said.
In another major recommendation, the committee has asked the ministry to evolve a mechanism to fix the ceiling for fees charged for various courses in India. "A workable mechanism for deciding the fee structure, mentioning the minimum and maximum chargeable fee for courses needs to be laid down," the panel noted. It questions the Act which simply asks institutions to declare fees in the prospectus without challenging their rationality.
"How will the mere fact of disclosing the fees in prospectus justify the fees even if they are exorbitant?" the committee headed by Congress’ Oscar Fernandes asked, reminding the government of the Supreme Court observations that state committees regulating admission procedures and fee structures would work as a temporary measure until the Centre or the state government concerned devised a competent authority to take this initiative.
This is your chance to render this much-awaited service to the nation, the committee told Sibal.

Ex-minister Ola rejects

Former Mines Minister Sis Ram Ola has given a dissenting note on the Bill, saying all penalty clauses should be withdrawn as they are very stringent and would lower the morale of private institutions. "Punishment prescribed for each offence, irrespective of its nature and gravity, more than acting as a deterrent, will lower the morale of private institutions," Ola said rejecting the Bill. 

money game

n The proposed Bill should be modified to cover middlemen who collect capitation fee
n Out of 44, 35 suggestions made by the committee have been accepted
n The committee has asked the ministry to evolve a mechanism to fix the ceiling for fees charged for various courses in India