Education

Policy on Fee Fixation in Private Unaided Higher & Technical Institutions
Including Management Institutes

Ministry of Human Resource Development
(Department of Education)
New Delhi, the 18th March, 1997

RESOLUTION

Policy on Fee Fixation in Private Unaided Educational Institutions imparting Higher and Technical Education including Management Education.

No.F.20-43/96-Desk(U)

The Supreme Court of India in Unnikrishnan JP versus State of Andhra Pradesh had on 8th February,1993 laid down a scheme regulating admission and levy of fee in private unaided educational institutions particularly those imparting professional Education. This scheme will be referred hereinafter as the ‘Scheme in Unnikrishnan’. As an interim measure the Scheme provided for an adhoc fee determination procedure and certain allied matters. As a long term measure, however para 6(6) of the scheme required that the All India Council of Technical Education (AICTE), University Grants Commission (UGC) and the Medical Council of India, and the Dental Council will frame suitable regulations in the matter which would replace the adhoc provisions of that Scheme.

Pursuant to the above decision, fee was fixed in various States in Private Engineering Colleges at rates that were found to be suitable by the Courts. Regulations were framed soon thereafter by the All India Council of Technical Education broadly incorporating the features of the Scheme laid down by the Court. Similarly, the University Grants Commission has also prepared draft regulations on the subject in case of Medical and Dental Colleges, however, rates of fee have been laid down by the Court from time to time.
The Court had occasion to consider the status of implementation of the Scheme in Unnikrishnan, as modified by its various orders in IA No.66 in CWP No.317 of 1993. The orders passed on 9th August 1996 require the Central Government, including the Ministry of Education to take steps to convene a meeting of all the concerned authorities for evolving a proper fee structure for Medical, Engineering and Dental Colleges throughout the country within three months which now stands extended till 28th February,1997.
Meetings of all concerned, viz. The Ministries of Health & Family Welfare and Law and the Medical Council of India, the Dental Council of India, the AICTE and the UGC, and Representatives of Technical, Higher and Medical Education, Departments were, accordingly, held on 30th August, 1996 and 8th October, 1996 where all the relevant issues were considered. Pursuant to these meetings, Ministry of Health & Family Welfare, took a view that the proposed fee structure for Medical and Dental Colleges could be evolved separately, and that it was not practicable to have a common fee structure for all professional Unaided institutions generally.
To take a final view in the matter, a meeting of State Higher and Technical Education Ministers was convened by the Union Minister of Human Res0ource Development on 10th December 1996 wherein it was decided that self-contained policy directions could be issued applicable to sectors of education, falling within the purview of the Ministry of Human Resource Development, namely Higher and Technical Education. The meeting noted that while the AICTE had notified its regulations and the UGC was in the process of doing so, uniform policy, directions were still needed to be laid down by the Government to cover all aspects of relevance in determining rates of fee. It was felt that further changes and details could be incorporated in the regulations, draft regulations in the light of these policy declarations.
President of India is pleased to approve the policy on Fee determination in Private Unaided Institutions in the Higher & Technical Education Sectors, formulated on the basis of the principles arrived at in the meetings of the officials of the State Governments of Andhra Pradesh, Maharashtra, Karnataka and Tamil Nadu and also endorsed in the meetings of the Ministers of State Governments for Higher and Technical Education. The policy is laid down in the succeeding paras.
1. General Principles
  
  The policy guide-lines enunciated below seek to ensure a fair fee structure in the relevant institutions. A fee structure in order to be fair, has to be fair to all concerned, namely the students and their guardians, the management, faculty members and employees. The bed-rock of such a policy has to be avoidance of commercialization and profit-making while simultaneously ensuring maintenance of standards and upkeep of facilities and assets. Keeping these as prime considerations, the following may be identified as the broad general principles which inform the present policy framework.
  1. Prevention of profit making and ensuring, as far as possible, the principle of no-profit –no-loss which underlines the scheme in Unnikrishnan
  2. Without diluting the fundamental concern of avoiding commercialization , to make allowance in the fee so as to provide for replacement and upgradation of facilities
  3. Providing for a transparent and intelligible procedure for fee determination
  4. Bringing all private unaided institutions within the purview of the scheme- not merely confining it to ‘Colleges’ and
  5. Involving the State Governments concerned in the process of fee determination.
2. Applicability
  
  These policy guidelines will apply to the following
  1. Self-financing institutions imparting technical education as defined under the All India Council of Technical Education Act. 1987 (Act 52 of 1987). Including institutions imparting Post-Graduate Education in Management whether by awarding degrees or otherwise.
  2. Colleges, affiliated to the universities, operating on ‘no grant-in-aid’ basis , and
  3. Institutions “deemed to be universities” under the University Grants Commission Act, 1956 (Act No.3 of 1956). If such institutions operate on self-financing basis without receiving maintenance grants from the Central or State Governments or statutory grant disbursing bodies under their control.
    
    Even though ‘deemed universities’ are not expressly included in the Scheme in Unnikrishnan, their inclusion within the purview of this policy is considered necessary on the grounds treating such institution at par with private colleges.
3. Admissions
  
  In the scheme in Unnikrishnan, the manner and method of admissions form part and parcel of the fee determination procedures. The admission procedure incorporated in that scheme will, therefore, apply to the institutions covered under the present policy. As the UGC Act does not empower the Commission to issue regulations relating to 'Admissions’, the judgment in Unnikrishnan and the present Resolution will be construed as enabling the Commission to make suitable provisions relating to admissions in accordance with the scheme in Unnikrishnan.
4. Determination of Fee
  1. Fee chargeable by various categories of institutions shall be determined by the Committees prescribed below .
  2. Fee in institutions imparting technical education will be determined by State Level Committees consisting of the following
    1. Vice-Chancellor of one of the universities in the State to be nominated by the State Government concerned – Chairperson.
    2. Secretaries in-charge of the Technical Education and Finance Departments of the State Government concerned or their nominees – Members
    3. Three experts, one each in Economics, Cost Accountancy , and Institutional Finance to be nominated by the All India Council of Technical Education – Members.
    4. Director Technical Education of the State concerned the Members – Secretary
  3. Fee chargeable in affiliated colleges operating on ‘No-Grant-in-aid” basis shall be determined by state level Committee consisting of
    1. Vice-Chancellor of one of the universities in the State nominated by the state Government concerned – Chairperson
    2. Secretaries in-charge of the Higher Education and Finance Departments or their nominees – Members
    3. Three experts, one each in institutions, Finance, Cost Accountancy and Economics to be nominated by the University Grants Commission – Members
    4. Finance Officer of one of the Universities to be nominated by the State Government – Members ,and
    5. Director in charge of Higher or Collegiate Education of the State concerned -–Member Secretary.
  4. Fee chargeable by Institutions deemed to be universities will be determined by a Standing Committee of the University Grants Commission consisting of
    1. A Member of the Commission – Chairperson
    2. One Vice-Chancellor to be nominated by the Commission – Member
    3. Three experts, one each in Economics, Cost Accountancy and Institutional Finance to be nominated by the Commission – Members
    4. Where a deemed university conducts courses in Technical/Medical Education, a nominee of the All India Council of Technical Education/Medical Council of India/Dental Council of India as the cases may be - Member
    5. State Secretary Higher/Technical /Medical education (depending on the field of specialization of the institution) or his nominee will be co-opted as the Member for the purpose only of determining the fee structure for ‘deemed universities’ in the State concerned.
    6. An officer of the UGC of the Rank of Additional Secretary – Member Secretary.
5. Procedure to be Adopted by the Committee
  1. Secretarial Assistance to the Committees referred in 5.2 and 5.3 will be rendered by the Directorates of Technical and Higher Education respectively of the State Government concerned. The Standing Committee referred to in 5.4 will be assisted by the Secretariat of the UGC.
  2. Members of the Committee, other than ex-officio Members, will hold office for a period of three years. The recommendations of the Committee will also be valid for three years.
  3. Each Committee will be free to device its own procedure. The procedure will however, compulsorily include giving opportunity to the institutions concerned to furnish such material as they consider relevant. The Committee will also have power to call for such information and details as it considers relevant. To carry out its functions smoothly, the bodies would lay down time bound ‘action- calendars’ and ‘dead-lines’ for compliance of the institutions concerned and for completing the Committees’ own tasks.
  4. Fee once determined shall be in force for three years. The Committees may determine different rates of fee for Institutions falling in different classes, if a classification is justified on intelligible and objective criteria. In particular the Committees will be free to fix different rates for institutions located in rural areas.
  5. The UGC and the AICTE, as the case may be, will have power to call for information and clarifications from the Committees under their purview.
  6. While determining the fee chargeable, it will be the duty of the Committee to ensure that Fee does not become a source of profit or commercialisation for the institutions concerned. This approach would be in conformity with pronouncements of the Court in cases dealing with fee determination.
6. Fee Determination
  1. Fee will have two broad categories – Tuition Fee and Development Fee
    
    Besides, the management of the institutions may realise the actual cost of boarding & messing from the above students subject to the relevant Committee being satisfied about the reasonableness of such costs.
  2. Tuition Fee will seek to recover the actual cost of imparting education. While assessing a fair tuition fee the Committee will take into account the following
    1. Salary and allowances including bonus, if admissible, to teaching and non-teaching employees
    2. Expenditure on administrative services
    3. Cost of maintenance of laboratories including consumables
    4. Contingent expenditure including statutory requirements like audit fee etc.
    5. Cost of acquisition of books and journals for libraries and
    6. Maintenance of buildings and other assets including rents and tariffs.
      
      Keeping the above parameters in view , suitable rates will be fixed for holders of free, payment, and NRI/Foreign Students’ categories.
  3. The UGC and AICTE will forthwith prepare norms relating to starting and scales of expenditure for other items wherever such norms have not so far been worked out, to the extent feasible. In cases where it is difficult to lay down specific quantified norms the relevant Committee shall satisfy themselves about the adequacy and reasonableness of the expenditure involved. Care will be taken to ensure that the projected expenditure does not become a source of profit to the sponsors.
  4. As the scheme in Unnikrishnan prohibits commercialization and profit-making, it will not be open to the institutions concerned to claim any return on investments. This should, however, not come in the way of the institutions in mobilizing resources for replacement and upgradation of assets. Further, while earning return on investment would not be permissible the court had in the Unnikrishnan judgment left the question of recovering investment on the Central Government and the statutory bodies. It is, therefore, considered desirable that the Development Fee could provide for an element of partial capital cost recovery to the Management (but not a return on investment) and to serve as a resource for upkeep and replacement.
  5. Development Fee may be at the rates to be determined every three years by the AICTE and UGC as the case may be. Different rate may be prescribed for “Payment” . “Free Merit” and “Foreign NRI” seat holders. These bodies could also classify institutions in different categories for the purposes of prescribing different slabs provided such categorization is based on intelligible and objective criteria.
  6. In the first ten years, it would be open to the managements to appropriate upto half of the proceeds of the development fee or the actual capital cost, whichever be lower. The remaining half will have to be utilised for upgradation and replacements in the first ten years and thereafter the entire proceeds will have to be so utilised.
  7. As the chargeable will be notified by the relevant Committee, it will be the duty of the Statutory body concerned to communicate the rate of Development Fee to such bodies well in advance to enable the appropriate Committees to suitably incorporate such rates in their Notification. The UGC/AICTE will take into account the views and suggestions of the private institutions, the State Governments and interested members of Public while determining these rates.
7. Maintenance of Fee Accounts
  1. Institutions will maintain two accounts – Maintenance Accounts and Development Account
  2. The proceeds of Tuition Fee and ‘cost recoveries’ of boarding and messing etc. will be credited to the Maintenance Accounts. This account will be maintained in two parts – (a) Pay and allowances and (b) other expenditure. All recurring expenditure will be met from this account and brought to account under these two parts.
  3. At least half the proceeds of Development fee will be credited to the Development Account in the first ten years, after which this Account will receive the entire proceeds of this fee – Miscellaneous receipts of the institution would also be credited to the same account. The proceeds of this fee would be utilised for procurement of equipments, books and journals and acquisition of assets. It will be also open to the management to debit expenditure on improvement of faculty also to this account.
  4. The regulations of UGC and the AICTE will provide for Audit of accounts of the relevant institutions to ensure that the financial managements conforms to the broad framework of these guide-lines and the regulations.
8. Other procedural matters connected with levy of fee
  1. Fee once fixed will be valid for a period of three years. Fee will be payable in advance for a semester, each Committee will notify for general information the total fee payable per semester in the month of December every year, for the next year, in two News papers having wide circulation in the State concerned. This exercise shall be carried out annually notwithstanding the fact that the rates once fixed will be in force for three years.
  2. While fixing fee, once every three years, the Committees will take into account the unspent balance, if any in the maintenance and development accounts while fee for the next three years.
  3. Institutions which levy fee at rates higher than those fixed or fail to maintain accounts in the manner laid down or are otherwise found to contravene the provisions of the appropriate Regulations are liable to have their permission/affiliation cancelled. The appropriate regulations will incorporate these guidelines.
Resolved that the above be suitably incorporated in regulations of the University Grants Commission and the All India Council of Technical Education.
Resolved further that for the above purposes this resolution be deemed to be instructions issued by the Central Government to the University Grants Commission under sub-section (1) of Section 20 of the UGC Act 1956 and under sub-section (1) of Section 20 of the AICTE Act – 1987.

Sd/-

P.R.DASGUPTA
Secretary