Panel for taxing grads working overseas

A parliamentary panel on human resources has suggested taxing students who take up overseas jobs after passing out from premier institutions in the country and employers for each graduate recruited by them in order to recover the cost of higher education. Parliament's standing committee on human resource development has recommended the imposition of "graduate tax" and "exit tax", saying such levies are already in vogue in some countries.

The panel's report said the graduate tax was levied on those who use the services of skilled and trained manpower. "An employer is required to pay an annual tax to the government for each graduate recruited by it," the committee said, while admitting that the scheme had a major drawback as it might lead to the substitution of university graduates with less educated manpower.

"Nevertheless, the committee feels that taxing employers, based on the type and number of manpower they use, has a good rationale and should be considered seriously for implementation," the report said. The human resource development ministry said the suggestions would be conveyed to the finance ministry and the University Grants Commission.

The committee said the imposition of exit tax on students immigrating to taking up jobs after obtaining their degrees, particularly from premier institutions which are run with massive state subsidies, was suggested by some experts.

The experts argued that the expenditure on such students do not provide any returns to the country, the report said. "The committee is of the view that students passing out from premier government institutions get the best education on payment of nominal fees. In the event of their leaving the country for good, imposition of exit tax on them must be considered," it said.