COACHING centres have emerged as one of the most lucrative business ventures in the country. The profits the tuition industry makes are huge because minimal investment is required, the demand is enormous and above all, there is no taxation.

In short, this business is a free-for-all. Dr Kaiser Bengali, an economist, estimated in 2014 that some tutors earn as much as Rs1 million per month and pay no income tax on that amount; while a more recent independent survey estimates top tuition centres earn about Rs10m a month and teachers Rs2m by teaching in various coaching centres.

An effective strategy that coaching centres have adopted to enhance their popularity is branding. Similarly, cities are flooded with well-known brands specialising in various science subjects and a number of professional qualifying examinations.

An occupation once regarded as an activity to augment income has now become the main income-generating vocation. Coaching centres are a product of parents’ increasing obsession with improving their children’s academic grades.

The massive increase in the number of coaching centres follows the basic principle of demand and supply. However, no credible data about the number of coaching centres or their breakdown by location is available, making it difficult to regulate this sector.

In India, if a coaching centre is run as an institution, it must obtain a trade license and pay tax for the revenue it generates. If the income exceeds Rs0.9 million per annum, it becomes compulsory to register the business and pay service tax within 30 days.

In Bangladesh, The Education Act 2016 sought to ban coaching centres and private tuitions. The government also issued its “Policy 2012” in a bid to curb the coaching industry. Teachers could provide at-home services to around 10 students belonging to an institution that they themselves are not affiliated with; that too, only after both the teacher’s and the students’ school agreed to it.

Likewise in Pakistan there is a need to determine criteria for opening tuition centres. The Ministry of Education should appoint a body to monitor the fee structure of tuition centres. The mushrooming growth of coaching centres is not a problem in Pakistan only.

According to report titled “Shadow Education” by Mark Bray and Chad Lykins, shadow education systems, named so because they mimic school systems, are expanding uncontrollably across Asia.

It adds that, “households in certain countries spend staggering portions of their incomes on shadow education... In several countries in the region, including some with high-quality school systems, shadow education appears to have become a permanent feature.”

This tutoring may contribute to students’ achievement, but it also maintains and exacerbates social inequalities, diverts resources from other uses, and can contribute to inefficiencies in education systems.

Moreover, unfortunately coaching centres are not centres of imparting knowledge, but teaching shops that treat education as a business. However, shadow education systems can be regulated and proactive measures can minimise some of the problems before they arise.

The Ministry of Education must prepare proper rules and regulations to monitor their activities and also to bring them under the tax net. Coaching centres which are providing coaching without following any government rules are not only minting money but are also involved in a number of malpractices.

In the past there have been reports of the involvement of private coaching centres in organised cheating across the country where the centres charged heavy fees to promote cheating by leaking examination papers before the examinations.

Published in Dawn, The Business and Finance Weekly, July 16th, 2018



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