Private companies may be allowed to invest in primary education sector in collaboration with public sector companies, reported ‘The Economic Times’. Currently, the plan is under consideration by the government and is under review. If it is implemented, investment by private companies will be allowed, provided they collaborate with public sector company.
Currently, charitable trusts and societies are the most preferred structure in the education sector and major chunk of profits is barred from taking away as profit. With new proposed business model, companies will be able to invest in primary education and will be able to generate profits from it. However, they will be barred from any tax exemptions and will be treated as profit making entities.
It must be noted that the proposed business model will only be applicable to those private companies who are willing to do a joint venture with a public sector company and is willing to share the dividends as per the agreement.
News Source: The Economic Times