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Budget 2014: Govt should remove service tax on training, tutorial services, says Career Point CMD

July 9, 2014

Business Today spoke to Pramod Maheshwari on his expectations from Budget 2014.  

1. Low-cost debt to educational institutions: Education is critical to a nation's economy. Investment in education is directly associated with reducing youth unemployment. Setting up an educational institution requires large expenditure on infrastructure and other capital spending. We have seen many cases in India where institutions have failed just because of not having an affordable funding. The government promotes low cost debt in housing, energy and other sectors for obvious reasons. In Budget 2014, I would like to see the same movement for the education sector - a low cost funding to institutions in formal as well as informal education, i.e, schools, universities, online start-ups, etc.

2. Exemption of service tax on training and tutorial services: Training, coaching and tutorial services in education are essential to the present education system. These services play a vital role in adding value and holistic development of the entire learning mechanism. These are no longer luxury services whilst analogous to primary education system. Service tax on these activities is unfair and adds additional cost to end user - the student. Hence, training and tutorial services in education should be categorised in the negative list of service tax.

3. Consent of for-profit model in higher education: For-profit education is gaining traction in the world at present. Besides the US and UK, many developing countries such as China and Brazil have already accepted for-profit education model.

Apart from addressing the issue of low enrollments ratio, for-profit institutions have created more innovative, employment-oriented courses to cater to the needs of students, unemployed youth and working professionals. In addition to a constructive impact on the education system, for-profits have three favourable financial implications to state economy: helps attract foreign investment, increases tax revenue, and helps export education once we have quality infrastructure and institutions.

Pramod Maheshwari is Managing Director & CEO, Career Point Ltd.

As told to Sarika Malhotra

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