Why Madras varsity may not be able to pay its staff
On The Brink Of Financial Collapse, University Seeks ₹35cr Bailout From State Govt
Ragu.Raman@timesgroup.com
26.05.2019
If the 161-year-old University of Madras does not receive urgent financial aid from the government and full salary grant, its finances may collapse in a month or two and it may not able to pay salaries and pension.
The university has presented a ₹203cr budget for 2019-20 with an accumulated deficit of ₹84.92cr. To stay afloat, the university has sought a ₹35cr annual bailout package from the government besides increasing various fees. It is exploring avenues to generate revenue.
Trouble started in 2011-12 when, without any allocation, the previous administrations constructed seven buildings on the Guindy and Taramani campuses, spending from the university’s funds. But officials said the current deficit was due to implementation of the seventh pay commission scales for teaching and non-teaching staff, and pensioners.
The university’s monthly expenditures have increased by ₹3cr. Though it receives ₹27cr as interest from its corpus fund, the expenditure towards pension is ₹60cr. “Salary grant is paid by the state government. But the university is paying the pension. The state should also bear it. For the first time, we were not able to pay retirement benefits from May 2018,” a senior professor from the university said.
When asked, P Duraisamy, vice-chancellor, said the university was unable to pay retirement benefits due to increase of gratuity, commutation and earned leave reimbursement. “We have approached the government to meet the deficit in the pension account. If it does, we can manage the salary of the staff members through our revenue,” he said.
The university is not receiving the full salary grant due to audit objections raised during the tenures of previous administrations. “The university is supposed to receive ₹56cr as salary grant but gets ₹36cr. The posts of assistant registrars and deputy registrars were filled by promotions instead of calling for open advertisements. The local fund audit objected to the promotions,” a syndicate member said. “Over the past 10 years, citing objections, the government gradually stopped giving salary grants to the non-teaching staff who have been promoted. We lost 40% grant due to violations,” he said.
But there were no objections in the 2017-18 fund audit. “Now that there is no objection, the government should give a one-time waiver to audit objections. If we receive full grant it would ease the financial stress,” said a source in the finance committee.
Less grant has invited more problems. This February, the Income Tax department slapped a ₹68 lakh tax notice on the university treating it as a ‘private’ institution. Professors said the varsity received onefifth of the total expenditure as grant from the government. Rules stipulate that a government institution should receive more than 50% as grant from a state or central government.
The university has recently increased the various fees for the PG and UG courses to tide over the crisis. The university hopes to raise ₹15cr through fee hikes. “We are adopting austerity measures and also would seek a one-time waiver to audit objections. If we receive full salary grant it would help us,” professor Duraisamy said.
On The Brink Of Financial Collapse, University Seeks ₹35cr Bailout From State Govt
Ragu.Raman@timesgroup.com
26.05.2019
If the 161-year-old University of Madras does not receive urgent financial aid from the government and full salary grant, its finances may collapse in a month or two and it may not able to pay salaries and pension.
The university has presented a ₹203cr budget for 2019-20 with an accumulated deficit of ₹84.92cr. To stay afloat, the university has sought a ₹35cr annual bailout package from the government besides increasing various fees. It is exploring avenues to generate revenue.
Trouble started in 2011-12 when, without any allocation, the previous administrations constructed seven buildings on the Guindy and Taramani campuses, spending from the university’s funds. But officials said the current deficit was due to implementation of the seventh pay commission scales for teaching and non-teaching staff, and pensioners.
The university’s monthly expenditures have increased by ₹3cr. Though it receives ₹27cr as interest from its corpus fund, the expenditure towards pension is ₹60cr. “Salary grant is paid by the state government. But the university is paying the pension. The state should also bear it. For the first time, we were not able to pay retirement benefits from May 2018,” a senior professor from the university said.
When asked, P Duraisamy, vice-chancellor, said the university was unable to pay retirement benefits due to increase of gratuity, commutation and earned leave reimbursement. “We have approached the government to meet the deficit in the pension account. If it does, we can manage the salary of the staff members through our revenue,” he said.
The university is not receiving the full salary grant due to audit objections raised during the tenures of previous administrations. “The university is supposed to receive ₹56cr as salary grant but gets ₹36cr. The posts of assistant registrars and deputy registrars were filled by promotions instead of calling for open advertisements. The local fund audit objected to the promotions,” a syndicate member said. “Over the past 10 years, citing objections, the government gradually stopped giving salary grants to the non-teaching staff who have been promoted. We lost 40% grant due to violations,” he said.
But there were no objections in the 2017-18 fund audit. “Now that there is no objection, the government should give a one-time waiver to audit objections. If we receive full grant it would ease the financial stress,” said a source in the finance committee.
Less grant has invited more problems. This February, the Income Tax department slapped a ₹68 lakh tax notice on the university treating it as a ‘private’ institution. Professors said the varsity received onefifth of the total expenditure as grant from the government. Rules stipulate that a government institution should receive more than 50% as grant from a state or central government.
The university has recently increased the various fees for the PG and UG courses to tide over the crisis. The university hopes to raise ₹15cr through fee hikes. “We are adopting austerity measures and also would seek a one-time waiver to audit objections. If we receive full salary grant it would help us,” professor Duraisamy said.
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