Exit tax on graduates is not a good idea
HYDERABAD/NEW DELHI: The idea of an exit tax on graduates from India’s highly subsidised institutes like the Indian Institutes of Technology and the Indian Institutes of Management is back on the horizon, with the parliamentary standing committee on human resource development suggesting it.
The logic is simple — the exchequer subsidises these students who then go on to earn substantial sums by working for multinationals abroad and the Indian exchequer gets very little for its investment.
The concept of taxing graduates is not new. The UR Rao Committee, set up in 2003 by the NDA government to look into the workings of the All India Council for Technical Education (AICTE), had suggested that the industry which employees these students should pay a cess.
The cess would help the government recover the cost of subsidising these students. The committee’s report was submitted to the then HRD minister Murli Manohar Joshi. Follow-up action on the committee’s recommendation could not be taken as the NDA government was voted out.
Source: ET