India Supreme Court Rules Capitation Fee Is Illegal

(Photo: Brian Turner, Creative Commons)

(Photo: Brian Turner, Creative Commons)

A ruling by a Constitution Bench of India's Supreme Court earlier in the week found the capitation fee charged by educational institutions to be illegal. The ruling stated that it is up to the government to ensure that education, a "noble activity," does not turn into a "business."

The bench of Justices, including AR Dave, AK Sikri, RK Agrawal, AK Goel, and R Banumathi, noted that the goal of educational institutions should not be to make a profit, and that it is up to the government to regulate the sector to promote merit, put a stop to malpractice, and transparently ensure merit-based admission, reports Neha Singh for The International Business Times.

"Though education is now treated as an ‘occupation' and, thus, has become a fundamental right guaranteed under Article 19(1) (g) of the Constitution, at the same time shackles are put in so far as this particular occupation is concerned, which is termed as noble. Therefore, profiteering and commercialization are not permitted and no capitation fee can be charged. The admission of students has to be on merit and not at the whims and fancies of the educational institutions," the bench said.

The bench went on to say that the government must ensure that the admissions process meets the "triple test," including transparency, fairness, and non-exploitativeness.

It is not uncommon for India's engineering colleges and institutions that also offer other areas of study to charge a capitation fee in exchange for a guaranteed seat despite the ability of a candidate in a particular area of study. The recent ruling condemns this practice, which has been long-criticized for turning out sub-standard graduates, particularly in the engineering and IT sector, writes Rizwi Hossain for

According to the court, unreasonable demand cannot be made by students or their parents. However, educational institutions can charge fees that would cover various expenses that are incurred by students and their parents in addition to the expansion of education for future students.

Referring to an earlier judgement, the court noted that education is considered to be "noble occupation." As such, those who create and manage educational institutions should not be there to make a profit or commercialize the sector. Because of this, the court said complete freedom was not given to educational institutions concerning the right to admit students or the fixation of fees, reports Amit Anand Choudhary for The Times of India.

The bench added that it was the Constitutional duty of the government to make sure educational institutions are not participating in commercialization, and also to ensure that the goal of these institutions was to educate, not to make money. However, it did say that a reasonable revenue surplus could exist that would allow for the expansion of education.

In terms of admissions, merit is expected to play an important role. They suggest the state or the university require such merit-based admissions to occur at private unaided institutions while at the same time ensuring that enough discretion is used in the admissions process as a whole.

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