It’s the start of the new academic year in Tamil Nadu (pop. 72 million) and harvest season for touts, agents and representatives of top managers, owners and promoters of government and private colleges and universities, who routinely demand huge sums for exercising their discretionary powers to admit ineligible but wealthy household students into their classrooms. Of course demanding ‘capitation’ fees is illegal and several laws and judgements of the Supreme Court have decreed that admission should be strictly on merit. But given the huge demand-supply gap for admission into heavily subsidised government colleges and too-few reputed private colleges of professional (medical, engineering, IT etc) education, these laws and dicta are practiced more in the breach than observance.
Therefore it came as a big surprise to students, academics and the general public when income tax sleuths raided the campus and offices of the Chennai-based SRM University (estb. 1985 and conferred varsity status in 2002) on June 18, and conducted intensive searches at the university’s 20 colleges, the residence of SRM group chairman T.R. Pachamuthu, and his kin.
According to media reports, the raids yielded unaccounted cash of Rs.6.75 crore and documents indicating receipt of donations, inflated expenditure, diversion of funds from the Valliammai Trust which runs the SRM institutions, and income tax evasion for several years. Income tax officials say the raid was a follow-up to an inquiry conducted by the Central Bureau of Investigation (CBI) in March, in response to a complaint from a parent who stated that he paid Rs.30 lakh as capitation fee for admission of his son into the MBBS programme of SRM Medical College. Inevitably, the management denied the charge and Pachamuthu and son Ravi were granted anticipatory bail by the Madras high court.
The raids on SRM University have raised eyebrows in Chennai and received nationwide publicity in the media because since the SRM Engineering College was promoted in 1985 (by Pachamuthu who began his career as a school teacher) with the blessings of Tamil Nadu’s legendary actor-chief minister, the late M.G. Ramachandran (1917-1987), the SRM Group, which comprises 20 colleges providing professional (nursing, pharmacy, catering, hotel management etc) education to over 50,000 students and employs 1,800 faculty and 1,700 non-teaching staff, has grown into a higher education behemoth.
According to a report of the Mumbai-based Credit Analysis and Research highlighted on the front page of the Economic Times (June 22), the revenue of SRM Insti-tute of Science and Tech-nology aggregated Rs.622 crore in 2011-12, and its surplus before interest and depreciation was Rs.255 crore, 32 percent higher than the previous year. The annual income of SRM University and the SRM Group which has also diversified into elect-ronics, transport, hosp-itals, engineering, construction and media and entertainment is estimated at Rs.5,000-10,000 crore.
Quite clearly, the IT raids of June 18 were not ordered by the Jayalalithaa-led AIADMK government of Tamil Nadu or instigated by the opposition DMK party led by former movie script writer M. Karunanidhi. The SRM Group could not have grown so mightily without the blessings of Tamil Nadu’s major regional political parties, both of whom have been supported by Pachamuthu from time to time.
According to informed monitors of Tamil Nadu’s complex political scenario, the recent income tax raids on SRM University and Pachamuthu are the consequence of his having started a political party under the name and style of Indiya Jananayaga Katchi (Indian People’s Party), and launching a television channel Puthiya Thalaimurai (New Generation) in 2011, which have been severely critical of the Congress-led UPA-II government in Delhi. “The ruling Congress party has been frequently targeted by the SRM television channel for corruption and insufficiently supporting Sri Lankan Tamils. It’s not a coincidence that the income tax department is controlled by the Central government,’’ says A. Narayanan, social activist and editor of the Chennai-based weekly magazine Paadam.
But the consensus of opinion in Chennai is that the tax raids on SRM University and Pachamuthu are likely to prove a much ado about nothing. They are a warning shot across the bow to this rags-to-riches educationist to stick to the knitting and not venture into political waters.
Hemalatha Raghupathi (Chennai)