Authored By: Ambuj Dixit
The current pandemic and the “not so federal” lockdown imposed by the Central government starting 23rd of March 2020, has resulted in a state of complete chaos for the country. It would not be an exaggeration to say that more than the pandemic, the lockdown has affected the country at an unprecedented scale and in aspects that cannot even be measured. While the data available in the public domain shows the threat that is looming upon us in form of a devastative pandemic, it also throws light on the fact that the country is facing its worst economic crisis in decades. The crisis, however, is not just attributable to Covid-19 as earlier data reveals that the country was already going through its worst economic phase in nearly 4 decades. The situation only worsened with the unplanned lockdown being imposed without any prior notice to the public and the states at large. According to estimates of the Centre for Monitoring Indian Economy, nearly 122 million people in India lost their jobs in April alone. While this data represents just a modest portion of the total job loss that happened in the country due to the lockdown, nearly 80 per cent working Indians experienced income loss in some form or the other. Over, One-third of the total MSMEs in India have started shutting their shops at the beginning of the month of June itself. While this data is not sufficient to represent the exact loss of income that households have suffered since past several months, it at least shows that the economy is in a very vulnerable condition and in a country where the household savings have been down since the Demonetization, it is utopian to expect that people who have lost their incomes have money in their bank accounts or in form of cash at homes.
Lockdown & College Education
While overall on a macro level this downfall in savings and unforeseen loss of income has resulted in declining economic growth and public spending is down, the situation has become worse for college going students and their parents. While the income loss has hit the people hard, most colleges and universities are still adamant on the students depositing their fee on time with institutions that charge as much as nearly 5-7 lakhs per annum for a B.A.LLB course. Now, when the households have no money to even meet their basic needs, as is evident from the data of loss of income quoted above, it is worthless to expect that they will be in a position to deposit college fee on time. While having said this, we must also remember that even the colleges and universities are obliged to pay salaries to their teaching and non-teaching staff and therefore they must not be condemned for charging basic fee from students. However, it is also worthwhile to mention that a college fee is not just a sum of 2-3 heads as we are made to believe, such as the tuition fee, hostel fee and mess charges etc., rather there are numerous sub-heads under these major heads. For example, a Tuition fee may include the expenditure of Salary to teachers, salaries of college non-teaching staff, building fund, campus development fee, fee for extra-curricular and co-curricular development, internet in the college campus, electricity in the college campus, water facilities in the college campus and many other such sub-heads. Now, while the colleges are under an obligation to pay their teaching and administrative staff, all the other heads of the tuition fee must have been waived off, that too when the students are not utilizing any of the other facilities offered by the colleges/ universities. Similarly, payments such as Mess fee and Hostel fee, which are towards specific services provided by colleges with a boarding facility, should have been waived off when the hostel and mess are not being utilized by the students. However, it is very disappointing to see the colleges not waiving or at least suspending these heads or sub-heads of the fee. Therefore, technically all the extra sub-heads are actually being held by the Universities as profits, as there is no actual expenditure of the fee deposited under these heads.
The law on Profiteering
In this regard, it becomes important to quote the judgment of the Hon’ble Supreme Court of India in the case of TMA Pai Foundation & Ors. v. State of Karnataka (2002) 8 SCC 481, where it held as under:
“We, however, wish to emphasize one point, and that is that inasmuch as the occupation of education is, in a sense, regarded as charitable, the government can provide regulations that will ensure excellence in education while forbidding the charging of capitation fee and profiteering by the institution. Since the object of setting up an educational institution is by definition ‘charitable’, it is clear that an educational institution cannot charge such a fee as is not required for the purpose of fulfilling that object. To put it differently, in the establishment of an educational institution, the object should not be to make a profit, inasmuch as education is essentially charitable in nature. There can, however, be a reasonable revenue surplus, which may be generated by the educational institution for the purpose of development of education and expansion of the institution.”
Therefore, it is apparent from the judgment quoted above, that there can be no profiteering in education. The word ‘profiteering’ literally means to generate unreasonable profit. Analysing the conditions of the students and their families vis-à-vis the exorbitant fee being charged by colleges and universities, there cannot be any iota of doubt that the fee being charged is unreasonable and more so, when the students don’t have the means to pay and when most of the facilities are not being utilized by the students. Let us do a small presumptive calculation in order to understand this situation and that too most liberally.
Let us assume that there are 1500 students in a college, and they pay Rs. 3 lakhs each as their annual fee. The total revenue of the college will come to Rs. 45 crores per year. As per Clause 4.2.7 of the UGC (World Class Institutions Deemed to be Universities) Regulations, 2016, the faculty-student ratio should not be less than 1:10 after three years of declaration as a World Class Institution Deemed to be University. Therefore, at least 150 teachers are required for 1500 students. Let us assume that all these 150 teachers are paid salaries on an equal scale of Rs. 50,000 each and in addition let us assume that the college has 50 administrative and other general staff. The salaries for all the staff would come to Rs. 12 crores. Let us further assume that the college is still spending 10 crores on miscellaneous expenditure. Now the total comes to 22 crores, which means that the college is still saving Rs. 23 crores per year.
This amount of Rs. 23 crores are the profit in the times of the current pandemic as the college doesn’t need to spend this money on the internet, electricity, food etc. At least this money must be waived off. A general comparison of the amount to be spent and the amount of profit would show that the latter is more than the former, which means that if the college actually decided to waive or suspend the fee, at least half of the fee of students will be saved and hence would be a big relief in these times of economic loss. However, if the same is not being waived, it amounts to profiteering, which along with being illegal is also immoral in the situation that we are faced with today.
No Humanity in Education?
Further, many reputed colleges in countries like Australia have waived or suspended their fee obligations in response to the current crisis that we face. However, it is unfortunate that we have had no humanitarian face in the field of education amidst the pandemic. Further, though UGC and AICTE have indicated that the suspension or waiver must happen, the nature of it remains suggestive and colleges are not dutybound to accept that. It is also disturbing to see that Writ Petitions regarding waiver of college fee have been rejected but time and again when all institutions of this country have failed the public, it is the Supreme Court which has come to rescue as the sentinel on the qui vive of the Constitution and it is in that institution that we must repose our trust. We still await to see if the Supreme Court further refines the aspect of charity in education.
The author is an advocate practicing at Supreme Court of India and various High Courts.