Management quota hit badly
New Delhi: Demonetisation drive hits massively for accepting the capitation fees and hurt the education institutions that charge capitation fees for admission in name of "management quota". The vast impact suffers are the middleman as the paid seats.
"Meanwhile, college authorities, on the other hand, are worried too, but not for the same reason. The unaccounted capitation fees that they were collecting in cash, are no longer a given. People are willing to pay much lower sums in cash and prefer cheque payments," said a source.
"Sumit Goyal (name changed), is a worried medical student. His father is not able to pay his medical college fees. The reason is simple; the college is refusing to take cash, their preferred mode of payment so far," said a relative of sumit.
He further said that depositing money in the bank is not an option because of the fear of the Income Tax Department, which is now using analytics to track unaccounted payments. At the same time Rahul Malhotra (name changed) is hopeful to get a seat that was formerly reserved for "management quota" in the institution of his choice.
Capitation fee is widely accepted in two segments of the education system—nursery admissions and professional higher education. "For the first time, it is going to get impacted in a big way," said a dean of private management college.
"This move is expected to make education affordable to meritorious students akin to what it will do with the real estate market," said a professor specializing in finance and entrepreneurship. She said that institutions will find it difficult to sell the so-called management quota seats.
"The key takeaway from this demonetization move is that there is a formal plan to curb the Indian theory 'you can buy everything for cash' and education sector was not immune to it," she added.
Another, Dr Kuldeep Kumar, assistant professor of UCMC colleges said nearly 50 per cent seats are laying vacant, who were sold for Rs 2 lakh to Rs 2 crore, depending on the streams and specializations, before this drive.
"While an MBBS seat goes for between Rs 40 lakh to Rs 60 lakh, in some medical colleges, a MD (doctor of medicine) seat has a price that ranges up to Rs 2 crore. Similarly, engineering and management stream seats have a rate between Rs 2 lakh and Rs 10 lakh each," he said. He, however, said that "some in the education sector believe that there is a cost to what has happened but its impact may be temporary - may be for a year or two."