Highlights of the Bill

• The Bill seeks to prohibit specified unfair practices in technical and medical institutions and universities to protect the interest of students. 

• Unfair practices include demanding or paying capitation fee; admitting students without specified merit criteria; not issuing receipt for any fee charged by the institution; publishing advertisement misleading students; and withholding degree to compel a student to pay a fee.

• The Bill makes it mandatory for every institution to maintain records of the selection process and publish a prospectus at least 60 days prior to admission.  The prospectus should include information about fees, conditions of eligibility, process of admission and details of faculty.

• The Bill imposes penalties for offences such as taking of capitation fees, not adhering to the prospectus, publishing false advertisements, etc.

Key Issues and Analysis

• Experts are divided over the issue of capitation fees.  Some contend that prohibition of capitation fee is required to ensure equity.  Others are of the view that steps to increase supply of educational institutions would automatically reduce capitation fees since it would address core issues such as shortage of seats and poor quality of education.  

• Although demanding capitation fees is illegal under current regulations, it has not been curbed.  Since the Bill does not change the enforcement mechanism for curbing capitation fees, it is not clear how the practice would be stopped. 

• The Bill states that its provisions do not affect the right of minorities to establish and administer educational institutions.  However, it is not clear what provisions the minority institutions are exempted from.

• The Bill prescribes a fine of upto Rs 50 lakh for offences such as charging capitation fees or publishing misleading advertisement.  The amount is significantly higher than penalties for offences under some recent Acts such as the Food Safety and Standards Act, 2006; the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.

Read the complete analysis here