Educational Institutions demanding capitation fee are likely to land up in big trouble now with the passage of the Unfair Practices Bill, 2010. The Human resource and development minister Kapil Sibal said, "The union cabinet today (Friday) cleared the Prohibition of Unfair Practices Bill, 2010. This means capitation fee charged by educational institutions will be a cognizable offence.” He added, “We are very serious about capitation fee. This is destroying our education system. It is a cognizable offence now."

 

According to the bill educational institutions indulging in mal practices like demanding capitation fee and other undue expenses from the students are liable to punishment which includes fiscal penalty, fine and in extreme cases even a jail sentence for the authorities involved. The term could go up to three years Sibal said, "Those who are indulging in it will be prosecuted - some will get monetary penalty and others fine and imprisonment.” He added, "This is a historic step that we are going to take through an appropriate law."

 

The Human resource and development minister said that institutions often extract money for hidden costs during admission but now the institutions will have to mention their fees and all other charges clearly in their prospectus and any money charged beyond that will attract punishment. Sibal said “Why can’t they disclose it in the prospectus. We are moving towards a self disclosure regime."