Monday, August 02, 2004

indian government reverses practice of controlling donations to universities

By Shailaja Neelakantan
(This article appeared in the Chronicle of Higher Education in August 2004).

India's new education minister, Arjun Singh, has scrapped a controversial order, issued by the previous government in 2003, that said all private donations to public universities had to be routed through a special government agency.
The previous government's order had irked potential donors in the United States. The Indian expatriates there worried that the government would interfere in the use of funds that they had donated for specific purposes. They also said that the U.S. Internal Revenue Service would have denied them tax deductions for the donations because it did not recognize a foreign government as a charitable cause.

In the year of its existence, the Indian government agency collected only $37.
Top engineering and business institutes in India rely heavily on their alumni for donations. At the Indian Institutes of Technology, for instance, as much as 10 percent to 15 percent of the budget is covered by gifts from expatriates.
Scrapping the old policy "will remove misgivings" among potential donors, said Nandan Nilekani, chief executive of Infosys, a software-services giant here. Mr. Nilekani has contributed $4.9-million to IIT's Bombay campus, his alma mater.
Some critics of the old policy have said that its real purpose was to enable the government to keep tabs on funds from abroad that were flowing to Islamic schools, called madrassas.

Others said the old policy was an attempt to use donations to promote the previous government's Hindu fundamentalist brand of education and research.