Did you know education is a big source of black money? Read on

The education sector is a big source of generating and parking black money, according to a study conducted by the National Institute of Public Finance and Policy (NIPFP).

The NIPFP's report, prepared about a year ago, has not been made public, but was accessed by the Economic & Political Weekly magazine in its 29 April issue.

In the 1,000-page report, a chapter addressing the avenues of generating black money in various sectors says historically, in addition to the government, not-for-profit organisations have provided education as a charitable activity. However, this scenario has undergone major changes in the past 20 years, in what is one of the biggest education systems in the world.

Since education is treated as a not-for-profit activity, and most schools are run by trusts in the country that cannot book profits, the report says there is a practice of creating companies that own land and build infrastructure, and then lease these out to a trust on rent to run the school.

“Another practice that is used to book profits by trusts is to hire professional companies to run and maintain the school by claiming share in the fee. Societies running schools are entering into partnerships with real estate companies to build a school in upcoming real estate projects,” the report says.

While the former cannot make profits, the latter can, the report points out.