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Exit tax on IIT & IIM grads? What India thinks
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September 10, 2007

A recent report of the parliamentary standing committee of the union Human Resource Development ministry sought to impose an exit tax on IIT and IIM students leaving India. 

We asked our readers to comment; as expected, responses were sharply divided between those who think that such a tax will help the country and those who think otherwise.

Interestingly, a few readers listed alternative, innovative approaches to the problem of education subsidies, brain drain and improving the standards of higher education in India.

Here is a sample of how India thinks about the issue.

For: Why does one have to subisdise a guy who is going to earn a least Rs 10 lakhs plus per annum?


As a student from an IIM I wholeheartedly accept that there should be some way for us to repay back.

In the first place why does the government have to subsidise it? Students from these institutions can get loans easily, which they can repay later. Further, there are scholarships for the economically weak.

Why does one have to subisdies a guy who is going to earn a least Rs 10 lakh-plus per annum?

The government can use these funds to run a school in a village. The amount used to subsidise each IIM student can be used to run a school for a year in each village.

Let us see what happens in the future. Hope they don't repeat the mistake that the previous NDA government tried, to further subsidise them, to reduce the fees to Rs.30,000.




Read more from readers on why an exit tax is good


Against: Let us not make the intellectual property of an individual taxable


It will be one the darkest day in the history of modern India. The state has all the duty to provide quality educations to every one and if some one who by his specially cultivated skills (yes studies are more to do with skills rather than IQ), goes to IIT or IIM, and then we pounce on him and Tax him.


We should not forget that only these IITian and Management people have worked hard outside and have made this country a leading powerhouse in the IT and Management world. They have led from the front and overcome the lethargic bureaucratic regime prevailing in the country. They have brought wealth not only in terms of money but also in terms of prestige, better working culture and environment.


There are crores and crores of rupees siphoned off by corrupt people in our country. Nobody is bothered about them. No tax or penalty for them. Who does not know how much money political parties spend for underhand dealings/briberies for elections etc? Judiciary is choked with pending cases. Law enforcing agencies lack proper leadership.


We had pledged our Gold reserve to Bank of England [Images]. When service sector was booming tax was imposed and now the Education tax. Let us not make the intellectual property of an individual taxable. Let them grow in an open and free environment.


We should be rest assured that they would be playing larger roles in the poverty alleviations of the country. Jai Hind.




Read more from readers on why an exit tax will not solve the problem


Other options: Provide for education loans


The idea of a tax for ensuring that the subsidy does not get wasted does not seem a bad idea at first glance. But the same can be implemented by removing the subsidy and instead providing the same money in the form of an education loan.


This can be at a slightly reduced interest rate as compared to market factors but a loan would ensure its return. Some form of a security can be asked for to ensure the loan is not misused. And I also agree with a section out here who said that performance tax needs to implement in Parliament.


Rahul Sidharthan


Read other innovative solutions to brain drain suggested by our readers

Your turn: Take sides, suggest solutions, tell us how you feel about the contentious issue.

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