INTRODUCTION TO WOOD DESPATCH OF 1854

INTRODUCTION :-

This unit deals with Wood’s Despatch of 1854. The Despatch is a very important educational document and holds a unique place in the history of Indian education. It placed the responsibility of education of the Indian people fully on the company and stated quite explicitly that it must never be neglected. The Despatch gave new direction to education in India and in a way this direction has its clear impact on today’s education in the country.

In this unit, we will discuss the historical the historical events leading to the Despatch, recommendations of the Despatch, its merits and weaknesses and finally the impact of the dispatch on the Indian Education System.

HISTORICAL EVENTS LEADING TO THE DESPATCH :-

Let us discuss the events that led to the preparation of the Despatch of 1854. It is known to us that the Charter of the East India Company had to be renewed after every twenty years. Accordingly while renewing the Charter in 1833 the British Parliament increased the sum of money to one million yearly from the one lakh in 1813 to be sent on education in India. When the time for renewal came in 1853, education in India had come to suffer numerous problems. The directors of the company decided to lay down a definite policy for education in India. Therefore, it became necessary to make a comprehensive survey of the entire field of education. As such, a Selection Committee of the British Parliament was set up in order to institute an enquiry into the measures for their reforms. The Committee studied the issue thoroughly and reported that the question of the Indian education should not be ignored and its development will not be in any case harmful to the British Empire. The suggestions of the Committee were favourably considered by the Board of Directors. Sir Charles Wood was the president of the Board of Control. Therefore, the declaration issued on July 19, 1854 was known as “Wood’s Despatch”, although it is said that the Despatch was written by the famous thinker John Stuart Mill, a clerk of the company at that time. On the basis of the recommendations of the Wood’s Despatch, new educational policies were formed.

RECOMMENDATIONS OF THE WOOD’S DESPATCH :-

Wood’s Despatch is a long document of 100 paragraphs and deals with the various aspects of great educational importance. Now we will discuss the recommendations in one by one.

Aims and Objectives of Educational Policy : The Despatch first throws light on the aims and objectives of educational policy of the Company in India. It gave highest priority to the responsibility of Indian Education overall other responsibilities of the Company. The Despatch had the following objectives in view:

a) To impart Western knowledge, information about the western culture to the Indians.
b) To educate the natives of India so that a class of public servants could be created.
c) To promote intellectual development and also raise the moral character of the young generation.
d) To develop practical and vocational skills of the Indians people so that more and more articles could be produced and also to create a good market for consumption of those goods.

Department of Education: The Wood’s Despatch, for the first time, recommended the creation of a Department of Public Instruction in each of the five provinces of Bengal, Bombay, Madras, the Punjab and the North Western provinces. The head of the Department would be called the Director and he was to be assisted by a number of inspectors. The D.P.T. had to submit an annual report to the government about the educational progress in his province.

Expansion of Mass Education: - Another major recommendation of the Despatch was expansion of mass education. It was observed that the common people were deprived of educational opportunities and therefore much emphasis was given on the increase of setting up primary, middle and high schools. The Dowaward Feltration Theory as proposed earlier was discarded and in its place importance to primary education was given. Elementary education was considered to be the foundation of the education system.

Establishment of Universities: - The Despatch recommended the establishment of universities in the three Presidency towns of Calcutta, Bombay and Madras. The universities were to be modeled after the London University and these were to have a senate comprising of a Chancellor, a Vice-Chancellor, and fellows who were nominated by the Government. The Universities would confer degrees to the successful candidates after passing the examinations, (of Science or Arts Streams) conducted by the Senate. The universities were to organize departments not only of English but also of Arabic, Sanskrit and Persian, as well as law and civil engineering.

Grant - in-aid system: - The Wood’s Despatch recommended the sanction of a grant-in-aid system in the Indian educational system. To educate the large number of people of India was a difficult task and so the grant-in-aid system was adopted by the government. Grants were given to those schools and colleges which satisfied the conditions given below :-

a)       The schools must provide secular education.
b)       The school management should run the school well.
c)       The school should agree to state inspection from time to time.
d)       The schools should follow any rule prescribed by the government for the regulation of the grant.
e)       The school must charge fees from the students.

Grants were given to the schools for increasing the salaries teachers, construction of school buildings, granting scholarships to students, improving conditions of literaries, opening of science department etc.

Teaching of Language: - The Wood’s Despatch gave importance to teaching of English, but at the same time, it also stressed on the teaching of Indian languages. The Despatch realised that any acquaintance of European knowledge could be communicated to the common people and that could be conveyed to them only through learning their own mother tongue. Therefore the Despatch clearly stated that Indian languages as well as English should be used as media of instruction.

Education of Women: - The Despatch recommended that the government should always support education for women. The wood’s Despatch stated, “The importance of female education in India cannot be over rated; and we have observed with pleasure the evidence which is now afforded of an increased desire on the part of many of the natives of India to give a good education to their daughters. By this means a far greater proportional impulse is imparted to the educational and moral tone of the people than by the education of men”. The Despatch also encouraged the private enterprises to promote women education.The schools for girls were to be included among those to which grants-in-aid would be given.

Training of Teachers: - The Wood’s Despatch recommended the establishment of teacher training schools in each of the provinces. There should be training schools for teachers of engineering, medicine and law. The qualified teachers should be given better pay scales. The Despatch further emphasized on the provision of scholarships to the teachers during their training period.

Professional Education: - The Wood’s Despatch encouraged professional education. It recommended the establishment of medical, engineering law and other institutes of professional education. The Despatch stated that in order to develop vocational efficiency of people and also to make people realise that the British rule was progressive. Another reason for the encouragement of vocational education was to control the problem of unemployment.

Introduction of network of Graded Schools all over India: - The Wood’s Despath recommended the establishment of a network of graded schools all over the country. At one end were the universities and the colleges, then the high schools followed by the middle schools and the bottom of the middle schools and at the bottom of the network were the primary schools, both government and indigenous. Both the Anglo-vernacular and vernacular schools were to be included in the same class. This system was recommended in order to enable an individual to receive higher education after completing the different levels of schools education.

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·         The main objective of the Wood’s Despatch was to educate Indian people inorder to create a class of civil servants.

·         It also wanted to impart Western knowledge and information about Western Culture to the Indian people.

·         The Wood’s Despatch recommended for the first time, the creation of Department of Education in Bengal, Madras, Bombay, Punjab and the North Western Provinces.

·         The Despatch recommended the promotion of mass education by establishing schools, both public of and private.

·         The Wood’s Despatch recommended the establishment of three universities in the Presidency towns of Calcutta, Bombay and Madras on the model of the London University.

·         The grant-in-aid system was recommended by the Wood’s Despatch

·         The Despatch wanted to promote the study of English as well as Indian regional languages and classical languages like Arabic, Persian and Sanskrit.

·         The Wood’s Despatch supported women education. 

·         Importance of training of teachers was realised by the Despatch and so it recommended the establishment of teacher training institutes. It also suggested the improvement of working condition and salaries of teachers.

·         The Wood’s Despatch also encouraged professional education.

·         EVALUATION OF WOOD’S DESPATCH :-

Now we are familiar with the recommendations of the Despatch of 1854. We have observed that the Despatch includes a number of valuable and fundamental recommendations for future educational development in India. It gave new direction to education and laid the foundation of the present Indian educational system. It solved many oldeducational issues like gradation of education, medium of instruction and proposed new schemes for future educational development in India with far reaching consequences. However, it can not be said that it is free from defects. Below we shall be understanding its merits and demerits:

Merits of Wood’s Despatch

1. The Wood Despatch started a new era in Indian education system by clearly defining objectives of education.
2. It made the Government realise the importance of education for the people.
3. It presented a comprehensive scheme of education embracing primary, secondary and higher education.
4. It recommended the creation of a separate Department of Public Instruction in five provinces and appointment of a Director to head the Department.
5. The principle of Downward Filtration Theory was discarded by the Wood’s Despatch and it encouraged the promotion of mass education; it recommended the establishment of indigenous schools.
6. By the grant-in-aid system many schools were benefited and the quality of education improved and private organisations were encouraged to open new schools.
7. The Despatch encouraged higher education by recommending the establishment of universities in Calcutta, Bombay and Madras.
8. The Wood’s Despatch emphasized on the necessity of vocational education.
9. The Despatch recommended the importance of establishing teacher training institutes to improve the quality of teachers and also improves their conditions and salaries.
10. The Despatch recommended scholarships for the poor and deserving students.
11. Language teaching was encouraged by the Despatch; as a result, regional languages and classical languages were taught in the schools.
12.  

The Wood’s Despatch was a historical document because of its merits.

They are given below :-

1. For the first time the government seriously realised the importance of a well planned education system.
2. It recommended the creation of a Department of Public Instruction and appointed a Director to head the Department.
3. It recommended the establishment of both government and indigenous schools to promote mass education.
4. The Despatch also recommended the establishment of three universities to higher education.
5. The Despatch encouraged vocational edication and also training for teachers.
6. The Wood’s Despatch recommended the teaching of English and Indian regional languages as well as classical languages like Arabic, Persian and Sanskrit.

Demerits of Wood’s Despatch

1. The Despatch, in reality promoted Western literature and knowledge and government offices showed preferences for persons educated in English.
2. The education planning and management schemes remained only in black and white.
3. It neglected general education. Only the privileged class receives education. Indigenous schools remained neglected. Priority was given to people educated on English pattern with regard to government posts. M. R. Paranjpe stated that, “the authors did not aim at education for leadership, education for the industrial regeneration of India, education for the defence of the motherland, in short, education required by the people of a self- governing nation.
4. Departments of Education were opened in the five provinces but they could not promote the real interest of education.
5. The system of grant-in-aid did not operate in proper sense, i.e., there was always the paucity of funds, the irregularity of their release and bliased attitude towards the privately managed schools.
6. The idea of providing vocational education as advocated by the Despatch, was in reality absent. People were facing the problem of unemployment and this is persisting even today.
7. The Wood’s Despatch had a partial attitude towards the Christian missionaries; Christian religious books were easily made available to the students, in the libraries.
8. The three universities were modelled on the London University and the Government’s policy of nominating members to the senate was biased. Therefore higher education was not related to Indian conditions.
9. The Despatch succeeded in only producing a class of clerks and accountants.
10. The Wood’s Despatch could not remove the imbalance in Indian education system. The rich people sent their children to English medium schools, and the government gradually stopped financial aid to the indigenous schools and so the existence of these schools became jeopardised. It failed to develop character initiative and leadership among students.

In conclusion it has been observed that however, it must be noted that inspite of all the limitations, the Wood’s Despatch was recognized as the Magna Carta of Indian Education.’ The objective of the Despatch was very sincere but the government could not implement the various suggestions and recommendations. The Department of Education was created in the five provinces with a DPI, inspectors and other officers. In 1857 three universities were also established in Calcutta, Bombay and Madras. The main provisions of the document were of great historical importantance. It provided a boost to secondary education and to some extent to primary education also. It was however observed that some of the most important recommendations of the Despatch were not carried out for a long time and some were given effect in a distorted form. During the first thirty years after the Despatch, government institutions gradually increased and beside the Christian Missionaries other private enterprise were not encouraged. 

As education spread and new ideals of social service emerged, Indian private enterprise began and multiplied but the government was not prepared to hand over its schools and colleges to Indian management as it had little faith on the Indians’ capacity and managerial skills. Plans to spread mass education were not realized nor were vernacular high schools established. It was painful to observe that the Despatch, to an extent, thought of India as a supplier of raw materials for British industries and the consumer of the finished products of England. Indians never recognized the Wood’s Despatch as a ‘Magna Carta’ as it did not sincerely promote universal literacy. The promoters of the Despatch could not visualize the progress of Indian aspirations even after a century. The Sepoy Mutiny happened in 1857 and soon after, the East India Company was disolved and the government came directly under the British Crown. As a consequence, efforts were made to consolidate the empire and education was somewhat neglected.

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Demerits of the Wood Despatch: 

·         The Wood’s Despatch could not manage the education system well.

·         Mass education did not become a reality.

·         The grant-in-aid system did not work well as there was paucity of funds and irregularity of the release of funds.

·         The Despatch was more intersted in promoting Western knowledge and culture.

·         The Department of Public Instruction could not promote the interest of education and the education in the universities could not be related to Indian conditions.

·         The Despatch did not promote vocational education as was required. in fact, the idea was postponed indefinitely.

·         Women education continued to be neglected.

·         The Despatch produced a cass of clerks and accountants but did not develop character and leadership qualities among students.

After having the discussion on this unit, followings are the basic ideas that we have discussed in details.

In the 1853 renewal of the Charter Act, it was realised that a systematic pattern of education was necessary for India. As a result the Wood’s Despatch was issued, with Sir Charles Wood as the President of the Board of Control of Education.

The main objective of the Despatch was to impart Western knowledge to the Indian people and also to develop their intellect and moral character.

For the first time in India, the Wood’s Despatch recommended the creation of a Department of Public Instruction in five provinces.

A major recommendation of the Wood’s Despatch was to spread education among the common people and to make them vocationally efficient.

Three universities in three Presidency towns of Calcutta, Bombay and Madras were set up as per the recommendations of the Despatch.

A major recommendation of the Wood’s Despatch was to spread education among the common people and to make then vocationally efficient.

Grant-in-aid system was to be introduced as per the recommendation of the Wood’s Despatch.

The Despatch encouraged the teaching of Indian regional languages and classica languages like Arabic, Persian and Sanskrit as well as English.

The wood’s Despatch encouraged the establishment of teacher training institutes to improve the quality of teachers.

For all the recommendations mentioned above, the Wood’s Despatch was called the ‘Magna Carta of Indian Education’.

Inspite of sincere intentions of the Wood’s Despatch, the government failed to implement many recommendations.

English continued to be the medium of instruction and the common people were deprived of education.

The universities set up in 1857 imparted such education as to promote Western knowledge and culture in India.

In reality, there was no vocational education in the country.

Mainly because of the Sepoy Mutiny in 1857, most of the recommendations could not be implemented.

1. The main objectives of the Wood’s Despatch were – 

a) To impart Western knowledge and information about the Western culture to the people.
b) To educate the Indian people so that a class of public servants could be created.
c) To promote intellectual development and vocational skills and also to raise the moral character of the people.

2. Five main recommendations of the Wood’s Despatch were:-

a) Creation of a Department of Public Instruction in the five provinces of Bengal, Madras, Bombay, Punjab and the North Western provinces.
b) The Wood’s Despatch recommended the promotion of mass education by establishing schools - primary, middle and high schools.
c) The Despatch recommended the establishment of universities in three Presidency towns of Calcutta, Bombay and Madras for the promotion of higher education.
d) The Wood’s Despatch recommended the introduction of the grant-in-aid system. Grants were provided to schools which imported secular education, abide by the government rules and agree to inspection from time to time.
e) The Despatch recommended that the government should always support women education. 

3. The merits of Wood Despatch were:

i) The Wood’s Despatch, for the fist time started a properly planned education system in India.
ii) It made the government realize the importance of general education.
iii) It recommended the creation of a Department of Public Instruction and appointment of a Director to head the Department.
iv) The Despatch recommended the establishment of universities in Calcutta, Bombay and Madras to promote higher education.
v) The Wood’s Despatch also recommended the establishment of institutes of vocational education and teacher training.
vi) The grant-in-aid system was introduced by the Despatch to improve the quality of education in schools.
vii) It realised the importance of teaching Indian languages as well as English.

4. Four main drawbacks of the Wood’s Despatch were :-
a) The Despatch promoted English as the medium of instruction, encouraged western knowledge and culture and government offices showed preferences for persons educated in English.
b) General education remained neglected.
c) The education provided produced only a class of clerks and accountants.
d) Vocational education was almost absent and women education was still very much neglected.

5. In spite of all the demerits, the Wood’s Despatch started a new era in the history of Indian education system. It made certain Landmark recommendations and so it was called the ‘Magna Carta” of Indian education. The objectives of providing mass education, women and vocational education and also teacher training were very sincere effort of the Despatch, but the government could not implement the various suggestions and recommendations due to dearth of funds and their apathetic attitude.
As a result of the recommendations and suggestions of Wood’s Despatch, in 1857 universities were established in Calcutta, Bombay and Madras but because of the Sepoy Mutiny efforts were made only to consolidate the British Empire and education was neglected.

INTRODUCTION TO CHARTER ACT OF 1813

INTRODUCTION:-

Although, before 1813, Missionaries and various religious groups had brought some basic education non-officially to the Indian masses but it was through the Charter Act that a state system of education was officially introduced in Indian history. In this unit, we are going to discuss and identify the significance of the Charter Act and Macaulay’s Minute during the British period in India.

CHARTER ACT OF 1813:-

In the 18th century, it was the Christian missionaries from whom the Indian masses basically received religious education pertaining to Christianity. But when the East India Company came to India they did not allow the missionaries for the propagation of the religious education to the common people in India. Because they felt that the education from the missionaries would encourage the religious sentiments among the people in India that could affecte the business policy and the diplomatic role of the East India Company. Therefore, from 1793 to 1813 the company did not permit the missionaries to work for the Indian people. Thus, it created an agitation against the East India Company that the Company was opposed to the teachings of Christ and neglected to provide education for the Indians. Interestingly, the agitation was supported by many in England and ultimately made a conclusion by introducing an education clause which is known as Charter Act of 1813. Hence, this Act ultimately made a State system of Education in India.

In this clause, the basic statement or condition of the British Government was : “It shall be lawful for the Governor-General-in-Council to direct that out of any surplus which may remain of the rents, revenues, and profits arising from the said territorial acquisition, after defraying the expenses of the military, civil and commercial establishments and paying the interest of the debt in manner hereinafter provided, a sum of not less than one lac of rupees each year shall be set apart for the revival and improvement of literature and encouragement of the learned natives of India, and for the introduction and promotion of a knowledge of the science among the inhabitants of the British territories in India.” Thus, it was the clause in which the first time in the Indian soil; official money of rupees one lac was allotted to expand the education of the Indians. This clause of the Charter Act of 1813 compelled the East India Company to accept responsibility for the education of the Indian people. As a result, from 1813 to 1857, the company opened many schools and colleges under their control which laid the foundation of the English system of education in India.

Controversies between Anglicist and Classicists

Although it was the first act through which the education system was formally laid down in India, yet it had created a controversy between the anglicist and classicist on the medium of instruction. Also the Charter Act of 1813 did not clarify the objectives of education and the methods for improvement of literature of the learned natives in India. The Charter Act had given stress on allotting the one lakhs rupees only; no specific regulations were granted for establishing the schools and colleges in India. The controversy arose mainly for the following reasons:

1. Aims: Regarding the aims of education during that time, groups of people had different opinions. One group preferred the propagation of oriental literature, whereas the other group stressed the need to introduce western literature among the Indian people.
2. In terms of agencies to be employed for organizing the schools and colleges, there were also some forms of conflicts and controversies. One school of thought opined that missionaries should be an agency for educational management while another group believed that it will be better if Indians themselves played the role for conducting the educational institutions. The third school of thought recommended the establishment of the schools by the company itself.
3. Regarding the medium of instruction there were also three opinions. The first opinion was that the western sciences and knowledge should be promoted through the classical lanquage as a medium of instruction, namely Sanskrit and Arabic. The second school of thought was favored to the modern Indian language and lastly the third school of thought held that education should be given through the medium of English.
4. Methods of education also created the controversy among the people of India. It was of two opinions regarding the methods. The first opinion was that education always filters down from the upper classes of the society to the common masses. It was known as ‘Downwards Filtration Theory’. The other opinion preferred that the company should themselves take the responsibility for educating the masses.

In 1823, the Governor-General-in Council appointed a “General Committee of Public Instruction”, which had the responsibility to grant the one lakh of rupees for education. That committee consisted of 10(ten) European members of which Lord Macaulay was the president. The committee decided to spend major portions from the grant for the improvement of oriental literature.

Interestingly, during that time, there was a rapid change in attitude towards the importance of English education, mainly due to the missionaries and the political influence of the English language. Therefore, for the Council of East India Company, the decision for granting the money faced a greater problem. The Court of Directors of the East India Company asked the Government of India to take the decision for spreading the education; however the Court of Director of the East India Company was in favour of English education. In this way, the controversy was going on for twelve years. Even, the General Committee of Public Instruction also was not able to decide the medium of instruction by vote; because out of ten members, five were supporters of English lanquage or Anglicist as the medium of instruction and the rest were supporters of oriental or classic lanquage or Classicists as a medium of instruction. This is the famous Anglicist and Classicists controversy. The Indian of the orientalists’ literature was not willing to accept European knowledge and science unless it was presented to them through the classical lanquages. Actually, the oriental party wanted to preserve the oriental learning from existing educational institutions while the other group of anglicist party wanted to abolish the preservation of the oriental education.

Macaulay’s Minute

As a president of General Committee of Public Instruction, Lord Macaulay wrote a minute on 2nd February 1835, where he made the conclusion regarding the controversy. Lord Macaulay stressed the implementation of the English language as a medium of instruction through his minute. According to him, English was the best medium of instruction. He held that this would enable the emergence of a class of people in the Indian society, who would be well versed in English language, western ideology, taste and opinion. This class would serve as a medium of contact with the great mass of Indian people who were culturally different from the English. This class would also be the agents of change of the great Indian society.

By introducing the English lanuage for the education of the Indian masses, Macaulay’s opinion was that the public mind of India may expand under the English system and through the English language, it may educate the people into a capacity for better government. In the minute, Macaulay wrote, ”We must at present do our best to form a class who may be interpreters between us and the millions whom we govern-a class of persons, Indian in blood and colour, but English in tastes, in opinions, in morals and in intellects.” Thus, from this minute, Macaulay anglicized the education in India as a whole so as to get benefits in their business policy. Actually, the Government of the East India Company wanted to educate some great Indians for profits in their business through the Downward Filtration Theory. The downward filtration theory means that the education was provided to a small portion of the people, and through them, education was conveyed to the masses.

Hence, through this theory, the minute did partiality by giving education to some favourable persons as they liked to engage them in their business policy.

In his minute, Macaulay criticized the oriental learning as “a single shelf of good European library was worth the whole native literature of India and Arabic”. Macaulay believed that English should be introduced because it is a language of the ruling class and also the familiarity has been gained by higher classes of Indians.

In fact, the contribution from Macaulay through his minute was appreciated as the torch bearer in the path of progress by some people of the higher classes in India and the Company. But Lord Macaulay was not free from some of the criticisms. Some people in India had blamed Lord Macaulay as Macaulay, took only the quick decision to promote the English language, not to be the torch bearer to create the desire for English education. Macaulay was also blamed by some Indians for his severe condemnation of oriental literature and religion.

Thus, in lieu of the British rule over India, Lord Macaulay’s Minute was accepted by Lord Bentinck, the Governor –General of India and passed the resolution to accept the English language as a medium of instruction for the Indian education system. 

Bentinck’s Educational Policy

Lord William Bentinck accepted Macaulay’s minute or opinions towards the lanquage of education for India on 7th March 1835. The orders or resolutions of Bentinck were:

1. “His Lordship-in-Council is of the opinion that the great object of the British Government ought to be the promotion of European literature and science among the natives of India; and that all the funds appropriated for the purpose of education would be best employed on English education alone.
2. But it is not the intention of His Lordship-in-Council to abolish any college or school of native learning, but no stipend shall be given to any student that may hereafter enter any of these institutions, and when any professor of oriental learning shall vacate his situation, the committee shall report to the Government the number and state of the class in order that the Government may be able to decide upon the expediency of appointing a successor.
3. It has come to the knowledge of the Governor-General in-Council that a large sum has been expanded by the committee on the printing of oriental works; his Lordship-in-Council directs that no portion of the funds shall hereafter be so employed.
4. His Lordship-in-Council directs that all the funds which these reforms will leave at the disposal of the committee be henceforth employed in imparting to the native population a knowledge of English literature and science through the medium of the English lanquage; and his Lordship-in-Council request the committee to submit to Government with all expedition, a plan for the accomplishment of this purpose.” 

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1. The Bentinck Policy made the resolution of Macaulay’s views on the stress of English language as a medium of instruction.
2. In the orders of Bentinck policy, the whole focus was given to invest all the expenditure of education in improvement of English literature and science only.
3. The resolution which was made by Bentinck, ordered to ban for investing any fund on the printing of oriental works.
4. One of the order of the resolution was that, a vacant post of any teacher in oriental learning would be filled only after the Government finds it expedient

Thus, these orders which are discussed in the above points were made the confirmation in implementing the English as a medium of instruction. As a result of the resolution; there were established Zilla schools in the Principal towns of the presidencies where literature and science were taught through the medium of English lanquage. The policy of Lord William Bentinck in the field of higher education made obstacle to invest any expenditure on vernacular teaching, as a result of this policy, in Government vernacular schools, the use of vernacular lanquage as a medium of instruction was prohibited.

LET US SUM UP

After the above discussion, the following are the basic ideas that can be noted bellow:

1. The Charter Act of 1813 made a State system of Education in India officially.
2. This clause of Charter Act of 1813 compelled the East India Company to accept responsibility for the education of the Indian people by granting one lac rupees.
3. Regarding the way of spending the money for education, there was a controversy between the anglicists and classicists in terms of aims of education, agencies of education, medium of instructions and methods.
4. As a president of General Committee of Public Instruction, Lord Macaulay’s wrote a minute on 2nd February 1835, where he gave the conclusion regarding the controversy.
5. Macaulay concluded the controversy by acquiring English lanquage as a medium of instruction through his minute.
6. By introducing the English lanuage for the education of the Indian masses, Macaulay opinion was that the public mind of India may expand under the English system and through the English language it may educate the people into a capacity for better government.
7. Macaulay developed the policy of Downward Filtration Theory and through it; he made bifurcation of partiality in giving education to the Indian masses.
8. Some people of higher classes in India and the East India Company appreciated Macaulay as the torch bearer in the path of progress
9. Lord Macaulay submitted his minute to the Governor- General in Council where Lord William Bentinck was the Governor General of that Council.
10. Lord William Bentinck passed the resolution of the Macaulay’s Minute on 7th of March 1813, where all the funds that were allotted for Indian education should be disbursed only in favour of English language.

INTRODUCTION TO SECONDARY EDUCATION COMMISSION OF 1952-53

INTRODUCTION:-

In the previous unit we have discussed the University Education Commission which tried to give a new direction to university education in India. We will discuss the Secondary Education in this unit. Secondary education is the stage of education that includes all the classes after the primary school and before university education is started. This stage is considered to be the backbone of the country’s entire educational programme. This however, is also the stage which marks the completion of education for the large majority of pupils. Secondary education is also the basis of higher education which gives the desired direction to the nation’s power. An inefficient system of secondary education therefore is bound to affect adversely the quality of education at all later stages.

This unit deals with the Secondary Education Commission, 1952-53, covering its various aspects from the background of its appointment to its recommendations which had a far reaching effect on India’s Secondary Education.

BACKGROUND AND APPOINTMENT OF THE SECONDARY EDUCATION COMMISSION:-

Let us discuss the background of appointing the Secondary Education Commission. After achieving the independence in 1947, both the public and the Government began to take keen interest in the development of secondary education. Although the number of secondary schools and its enrolment began to significantly increase even before India’s attaining independence, the quality of education imparted was unable to meet the changing socio-economic needs of the country. As such, the need for reform was strongly felt. The university Education Commission also remarked that our secondary education remained the weakest link in our educational machinery and it needed urgent reforms. Meanwhile with the attainment of independence, the political situation of the country also underwent a complete transformation. Education also needed a fresh look, calling for a new outlook which was appropriately voiced by Maulana Abul Kalam Azad, the then Education Minister in his presidential address to the Central Advisory Board of Education in 1948. The Central Advisory Board of Education at its 14th meeting held in January 1948 recommended the appointment of a commission to examine the prevailing system of Secondary Education in the country and to suggest measures for its reorganization and improvement. There were other considerations also before the Government of India for setting up a commission for Secondary Education.

In view of these considerations, the Government of India set up, the Secondary Education Commission by Resolution dated 23rd September, 1952, under the Chairmanship of Dr. A. Lakshmanaswami Mudaliar, the Vice-Chancellor of the Madras University. Therefore this commission is also known as Mudaliar Commission. The Commission was inaugurated on 6th October, 1952. It submitted its Report on June 1953.

Terms of Reference:-

a)       To enquire into and report on the present position of Secondary Education in India in all its aspects.
b)       To suggest measures for its re-organisation and improvement with particular reference to -
i) The aims, organisation and content of secondary education.
ii) Its relationship to primary, basic and higher education.
iii) The inter-relation of secondary schools of different types.
iv) Other allied problems. So that a sound and reasonable uniform system of secondary education suited to our needs and resources may be provided for the whole country.

Method of Enquiry:-

The Commission prepared a questionnaire dealing with the various aspects of secondary education. This was sent out to various educational experts, teachers and educational institutions of India. On the basis of the replies received a good deal of information was collected. The members of the Commission took an extensive tour of the various parts of India and acquired first-hand knowledge of the various educational problems and presented its report running on August 29, 1953.

REPORT OF THE COMMISSION:-

Now we shall discuss about the report of the Secondary Education Commission, 1952-53. As the report is a very lengthy one containing 311 pages, it is not possible for us to discuss all aspects in detail. We will confine our discussion to the defects of the prevailing system of secondary education in India and the recommendations given by the Commission regarding its aims, new organizational pattern and the curriculum. Let us discuss all these points one by one.

Defects of the Existing System:-

The Commission pointed out the following defects of the existing system -

First, the education given in our schools is isolated from life. The curriculum as formulated and as presented through the traditional methods of teachings does not give the students insight into the everyday world in which they are living.

Secondly, it is narrow and one sided and it fails to train the whole personality of the student.

Thirdly, too much importance has been given to English. Students who did not posses special linguistic ability were, therefore, greatly handicapped in their studies.

Fourthly, the method of teaching generally practised failed to develop in the students their independence of thought and initiative in action.

Fifthly, the increase in size of the classes has considerably reduced personal contact between the teachers and the pupils. Thus the training of character andinculcation of proper discipline have been seriously undermined.

Finally, the dead weight of the examination has tended to curb the teachers initiative, to stereotype the curriculum, to promote mechanical and lifeless methods of teaching, to discourage all spirit of experimentation and to place the stress on the wrong, or unimportant things on education.

Its Recommendations on the Aims of Secondary Education:-

The Commission has made the following recommendations in regard to its aims of Secondary Education -

1. Development of democratic citizenship :-
   Since India has decided to make itself a democratic republic, the citizens have to be trained to uphold and practice the values of the democratic social order. This can be possible only when the qualities of discipline, tolerance, patriotism, co-operation, equal opportunities for thought, speech and writing, the essence of the world citizenship are inculcated and developed in the students. Secondary education, according to the Mudaliar Commission, should develop all these qualities in the students. Citizens with these qualities can grow into ideal - citizens capable of making Indian democracy a success. In short, the aim of secondary education should be to develop ideal democratic citizens in the country.
2. Improvement of Vocational efficiency :-
   One of the urgent needs of the country is to increase the productive efficiency of its people and to increase the national income. For this, education must aim at increasing the productivity or vocational efficiency of the young students. To achieve this goal, the Secondary Education Commission recommended for fostering the dignity of manual labour and for the promotion of technical skills for the advancement of industry and technology through secondary education. Therefore, secondary education is to be freed from purely theoretical education system and emphasis is to be placed on agricultural, technical, commercial and other practical courses.
3. Education for leadership :-
   Secondary education is a terminal point for majority of the students. Therefore, at the end of the school education, each pupil must be able to enter into various professions independently. “A special function of the secondary school, in the context, is to train persons who will be able to assume the responsibility of leadership - in social, political, industrial or cultural fields - in their own small groups of community or locality.”
4. Development of personality :
   The secondary education must aim at the development of the personality of the students. It should be so organised that the creative energy in the students should find proper expression. They should also be trained to appreciate their cultural heritage and acquire constructive and valuable interest. They should also be trained to preserve and conserve their cultural heritage. An all-round development of the personality of the student is an essential aim of secondary education.

Re-organisation of Secondary Education:-

Regarding the organizational pattern of secondary education, the Secondary Education Commission recommended that secondary education should be a complete stage by itself. This stage of education is most important for the students in their preparation for life. To raise the standard of school education the Commission proposed the following organizational pattern:
The duration of secondary education should be 7 years. It should cover the age of group of11-17.

Under the new organizational structure secondary education should commence after 4 or 5 years of primary or junior basic education.

The middle or senior basic or lower secondary stage should cover a period of 3 years.

The higher secondary stage should cover 3 years.

The commission also suggested abolition of the present intermediate classes. The 12th class should be attached to the university and the 11th class should be added to the high school. Thus it pleaded for one year pre-university and 3 year degree courses.

The commission recommended that technical schools should be started in large number and central technical institutes should be established in large cities.

Multi-purpose schools should be established, which would provide terminal courses in technology, commerce, agriculture, fine arts and home sciences. The object of theses institutions was to direct students into different walks of life at the end of the secondary course and this will reduce the pressure upon university entrance. 

CURRICULUM IN SECONDARY SCHOOL:-

The Secondary Education Commission has discussed at length the secondary education curriculum. First it pointed out the defects of the existing curriculum, discussed in detail the principle of curriculum construction and finally the curriculum of different stages of secondary schools.

Defects of the Existing Curriculum :-

The Commission has pointed out the following defects in the existing curriculum:

1. The present curriculum is narrow.
2. It is bookish and theoretical.
3. It is overcrowded and does not provide rich and significant contents.
4. There is no adequate provision for practical and other kinds of activities that should find place in any curriculum at this stage of education. Hence, the curriculum is not able to bring about the education of the whole personality of the child.
5. It does not cater to the various needs and capacities of the adolescents.
6. Technical and vocational subjects are very much needed for India today, but the curriculum does not find room for these subjects.
7. Curriculum is too much dominated by the examination.

The Basic Principles of Curriculum Construction :-

The Secondary Education Commission has recommended some principles to be followed in the construction of curriculum.

Principles of totality of experience –

According to the Secondary Education Commission, “The curriculum does not include only the academic subjects traditionally taught in the school but it includes the totality of experiences that a pupil receives through manifold activities that go in the school, in the classroom, library, laboratory, workshop, playground and in numerous informal contacts between teachers and pupils.” All types of experiences in the school or planned by the school should be included in the curriculum.

Principles of variety and elasticity –

The Curriculum should be elastic and include varieties of subjects and activities to meet the needs of the various types of pupils. The curriculum should be adaptable to meet the needs and interests of the students.

Principles relating to community -The curriculum should be related to the community. There should be community - oriented programmes in the curriculum so that a child can feel that he is an integral part of the local community. The curriculum should bring the child and the community closer.

Principle of training for leisure –

The Curriculum should be designed to train the students not only for work but also for leisure. For this purpose there should be a number of activities - social, aesthetic, sporting etc. which should be included in the curriculum. These activities will train the students to use their leisure time properly.

Principle of integration and correlation -The curriculum should not be merely a bundle of subjects and activities. The activities and subjects should be integrated and well - correlated. The curriculum should provide a ‘broad field’ units having direct bearing on life.

Curriculum of Different Stages of Secondary Schools:-

1) Curriculum for Middle Schools
2) Curriculum for High and Higher Secondary Schools.

The Commission has laid down the following different curriculum for these two stages in the secondary education.

1) Curriculum for the Middle Schools -
The Commission has recommended the inclusion of the following subjects.
a) English.
b) Social Studies.
c) General Science.
d) Mathematics.
e) Art and Music.
f) Craft.
g) Physical Education.

2) The Curriculum for High and Higher Secondary Schools-
For this stage of education, the commission has suggested that there should be a diversified course.
(a) Compulsory subjects or main subjects; and
(b) Optional subjects.

A. Compulsory Subjects :

The Compulsory subjects shall include the following :

1. Mother tongue or regional language or composite course of the mother tongue and a classical language.

2. One other language to be chosen from among the following:
i) Hindi for those whose mother tongue is not Hindi.
ii) Elementary English (for those who have not studied English in the middle stage).
iii) Advanced English (for those who have studied English at the earlier stage).
iv) A Modern Indian Language (other than Hindi).
v) A modern foreign language (other than English).
vi) A classical language.

3. Social studies - General course (for the first two years only).

4. General science, Including Mathematics - General course (for the first two years only).

5. One Craft to be chosen out of the list given below :
i) Spinning and weaving
ii) Wood Work
iii) Metal Work
iv) Gardening
v) Tailoring
vi) Typography
vii) Workshop Practice
viii) Sewing, Needle Work and Embroidery
ix) Modeling

B. Optional Subjects :

Three subjects from one of the following groups -

Group - 1 (Humanities) :
(a) A classical language or a third language from A (2) not already taken; (b) History; (c) Geography; (d) Elements of Economics and Civics; (e) Elements of Psychology and Logic; (f) Mathematics; (g) Music; (h) Domestic Science.

Group -2 (Sciences) :
(a) Physics; (b) Chemistry; (c) Biology; (d) Geography; (e) Mathematics; (f) Elements of Physiology and Hygiene; (not to be taken with Biology).

Group -3 (Technical) :
(a) Applied Mathematics and Geometrical Engineering; (b) Applied Science; (c) Elements of Mechanical Engineering; (d) Elements of Electrical Engineering.

Group - 4 (Commercial) :
(a) Commercial Practice; (b) Book-Keeping; (c) Commercial Geography or Elements of Economics and Civics; (d) Shorthand and Typewriting.

Group - 5 (Agriculture) :
(a) General Agriculture; (b) Animal Husbandry; (c) Horticulture and Gardening; (d) Agricultural Chemistry and Botany

Group - 6 (Fine Arts) :
(a) History of Art; (b) Drawing and Designing; (c) Painting; (d) Modelling; (e) Music; (f) Dancing.

Group - 7 (Home Science) :
(a) Home Economics; (b) Nutrition and Cookery; (c) Mother Craft and Child Care; (d) Household Management and Home Nursing.

Besides the above, a student may take as his option one additional subject from any of the above groups irrespective of whether or not he has chosen his other options from that particular group.

LET US SUM UP

1. The Secondary Education Commission was appointed under the chairmanship of Dr. L.S. Mudaliar on September 23, 1952. So, it is popularly known as Mudaliar Commission. The commission has pointed out some defects of the existing system of secondary education.
2. The commission gave important recommendations with regard to the aims of secondary education and the principles of curriculum construction.
3. The main aim of secondary education was to produce perfect citizens who may provide leadership and who are self-reliant, obedient and disciplined.
4. The commission has pointed out some defects in the existing curriculum. So, it has recommended the principles of curriculum construction. The principles are - totality of experience, variety and elasticity, relation to community life, training for leisure and correlation of the subjects.
5. The commission has suggested a scheme of curriculum for middle schools and high and higher secondary schools.

Indian Tax Structure

This guide provides an overview of the tax structure and current tax rates in India. The tax regime in India has undergone elaborate reforms over the last couple of decades in order to enhance rationality, ensure simplicity and improve compliance. The tax authorities constantly review the system in order to remain relevant. India has a federal system of Government with clear demarcation of powers between the Central Government and the State Governments. Like governance, the tax administration is also based on principle of separation therefore well defined and demarcated between Central and State Governments and local bodies.

The tax on incomes, customs duties, central excise and service tax are levied by the Central Government. The state Government levies agricultural income tax (income from plantations only), Value Added Tax (VAT)/ Sales Tax, Stamp Duty, State Excise, Land Revenue, Luxury Tax and Tax On Professions. The local bodies have the authority to levy tax on properties, octroi/entry tax and tax for utilities like water supply, drainage etc.

DIRECT TAXES

Individual Income Tax & Corporate Tax

The provisions relating to income tax are contained in the Income Tax Act 1961 and the Income Tax Rules 1962. The Income Tax Department is governed by the Central Board for Direct Taxes (CBDT) which is part of the Department of Revenue under the Ministry of Finance. In terms of the Income Tax Act, 1961, a tax on income is levied on individuals, corporations and body of persons. Tax rates are prescribed by the government in the Finance Act, popularly known as Budget, every year.

The Government of India has recently taken initiatives to reform and simplify the language and structure of the direct tax laws into a single legislation – the Direct Taxes Code (DTC). After public consultation the Direct Taxes Code 2010 was placed before the Indian Parliament on 30 August 2010, when passed DTC will replace the Income Tax Act of 1961. The DTC consolidates the provisions for Direct Tax namely the income tax and wealth tax. When it comes into effect, probably April 2012, it is likely to have significant impact on the tax payers especially the business community.

In the case of Individuals, incomes from salary, house and property, business & profession, capital gains and other sources are subject to tax. Women and Senior citizens are extended some special privileges. Individuals’ incomes are subjected to a progressive rate system. Tax treatment differs depending on the residence status.

Income of the company is computed and assessed separately in the hands of the company. Income of company is subjected to a flat rate plus a surcharge. In addition to these, an education cess is also charged on the tax amount. Dividends distributed are subjected to special tax and the distributed income is not treated as expenditure but as appropriation of profits by the company. Tax treatment differs depending on the residence status.

A company is liable to pay tax on the income computed in accordance with the provisions of the Income Tax Act. Although many companies have huge profits, and declare substantial dividends, they are relieved from tax liabilities because their income when computed as per provisions of the Income Tax Act is either nil or negative or insignificant. Therefore a provision called Minimum Alternative Tax (MAT) was introduced by an amendment in 1997. As per the MAT provision such companies are required to pay a fixed percentage (presently 18% for 2011-2012) of book profit as minimum alternate tax.

Additionally, by an amendment in 2005 companies are required to pay Fringe Benefit Tax (FBT) on value of fringe benefits provided or deemed to have been provided to the employees.

In addition to income tax chargeable in respect of total income, any amount declared, distributed or paid by a domestic company by way of dividend shall be subjected to dividend tax. Only a domestic company is liable for the tax.

Wealth Tax

Wealth tax, in India, is levied under Wealth-tax Act, 1957. Wealth tax is a tax on the benefits derived from property ownership. The tax is to be paid year after year on the same property on its market value, whether or not such property yields any income. Similar to income tax the liability to pay wealth tax also depends upon the residential status of the assessee. The assets chargeable to wealth tax are Guest house, residential house, commercial building, Motor car, Jewelry, bullion, utensils of gold, silver, Yachts, boats and aircrafts, urban land, cash in hand (in excess of INR 50,000 for Individual & HUF only),etc. But in reality majority of the potential tax payers do not pay this tax as most of the movable items such as jewelry, bullion etc are stashed away from accounting. Invariably they just pay tax for the immovable wealth such as real estate.

Capital Gains Tax

The central government also charges tax on the capital gains that is derived from the sale of the assets. The capital gain is the difference between the money received from selling the asset and the price paid for it. To restrict the misuse of this provision, the definition of capital asset is being widened to include personal effects such as archaeological collections, drawings, paintings, sculptures or any work of art.

Capital gain also includes gain that arises on “transfer” (includes sale, exchange) of a capital asset and is categorized into short-term gains and long-term gains. The Long-term Capital Gains Tax is charged if the capital assets are kept for more than three years or 12 months in the case of securities and shares that are listed under any recognized Indian stock exchange or mutual fund. Short-term Capital Gains Tax is applicable if the assets are held for less than the aforesaid period.

In case of the long term capital gains, they are taxed at a concession rate. Normal corporate income tax rates are applicable for short term capital gains. In case of the short term and long term capital losses, they are allowed to be carried forward for 8 consecutive years.

INDIRECT TAXES

Excise Duty

The central government levies excise duty under the Central Excise act of 1944 and the Central Excise Tariff Act of 1985. Central Excise duty is an indirect tax levied on goods manufactured in India and meant for domestic consumption. The Central Board of Excise and Customs under the Ministry of Finance, administers the excise duty. Central Excise Duty arises as soon as the goods are manufactured. It is paid by a manufacturer, who passes on its incidence to the customers. Excisable goods have been defined as those, which have been specified in the Central Excise Tariff Act as being subjected to the duty of excise.

There are three main types of excise duty -

• Basic Excise Duty is charged on all excisable goods other than salt at the rates mentioned in the said schedule
• Additional Duties of Excise is charged on goods of special importance, in lieu of sales Tax and shared between Central and State Governments
• Special Excise Duty is charged on all excisable goods on which there is a levy of Basic excise Duty. Every year the annual Budget specifies if Special Excise Duty shall be or shall not be levied and collected during the relevant financial year.

Note: Under the Cenvat (Central Value Added Tax) Scheme, introduced under The Cenvat Credit Rules, 2004, a manufacturer of product or provider of taxable service shall be allowed to take credit of duty of excise as well as of service tax paid on any input received in the factory or any input service received by manufacturer of final product. Such credits can be used to setoff any excise duty tax payable.

In the recent budget, a number of tax exemptions have been initiated. Specific goods enjoy concessional duty rates. Exemptions are allowed to tax payers engaged in the manufacture of certain goods such as, water treatment, bio-diesel, processed food etc and certain types of establishments such as small scale industries, cottage industries that create jobs are also exempted.

Customs Duty

Customs duty in India falls under the Customs Act 1962 and Customs Tariff Act of 1975. Customs duty is the tax levied on goods imported into India as well as on goods exported from India. Taxable event is import into or export from India. Additionally educational cess is also charged. The customs duty is evaluated on the value of the transaction of the goods. The Central Board of Excise and Customs under the Ministry of Finance manages the customs duty process in the country. The rate at which customs duty is applicable on the goods depends on the classification of the goods determined under the Customs Tariff. The Customs Tariff is generally aligned with the Harmonized System of Nomenclature (HSL). It should be noted that preferential/concessional rates of duty are also available under the various Trade Agreements.

Service Tax

Service tax was introduced in India way back in 1994 and started with mere 3 basic services viz. general insurance, stock broking and telephone. Subsequent Budgets have expanded the scope of the service tax as well as the rate of service tax. More than 100 services are subjected to tax under this provision. An education cess is also charged on the tax amount. The Central Board of Excise and Customs under the Ministry of Finance manages the administration of service tax.

Every service provider of a taxable service is required to register with the Central Excise Office in the concerned jurisdiction. Exemptions are available for services that are exported, small service providers whose revenue fall below the prescribed level, services provided to UN and International Agencies and supplies to SEZ(Special Economic Zones). Subject to conditions, service tax is not payable on value of goods and material supplied while providing services.

Securities Transaction Tax (STT)

Transactions in equity shares, derivatives and units of equity-oriented funds entered in a recognized stock exchange attract Securities Transaction Tax. Service Tax, Surcharge and Education Cess are not applicable on STT. Taxation of profit or loss from securities transactions depends on whether the activity of purchasing and selling of shares / derivatives is classified as investment activity or business activity. Treatment of STT also depends upon whether the income from these securities transactions are included under the head “Income from Capital Gains” or under the head ‘Profits and Gains of Business or Profession’.

NOTE: The Indian Government is keen on merging all taxes like Service Tax, Excise and VAT into a common Goods and Service Tax (GST).  GST system has been proposed in order to simplify current indirect tax system which is very tedious and complicated. All goods and services will be brought into the GST base. There will be no distinction between goods and services. Alcohol, tobacco, petroleum products are likely to be out of the GST regime. The state and central combined tax rate is speculated to be between 16%-20% in line with the global trend.  Originally slated for implementation by the year 2010 it has been postponed twice and now scheduled for the year 2012. The central and state tax authorities which had locked horns earlier are seemingly nearing a consensus. If implemented this will be the most outstanding reform ever to the Indian tax system.

STATE TAXES

Apart from the central taxes, the states also levy taxes on various good and services. Main state taxes consist of:

Value Added Tax (VAT)

Sales tax charged on the sales of movable goods has been replaced with VAT in most of the Indian states since 2005. This was introduced to counter the rampant double taxation issues and resultant cascading tax burden that occurred due to the flaws inherent in the previous sales tax system.

VAT, chargeable only on goods and does not include services, is a multi-stage system of taxation, whereby tax is levied on value addition at each stage of transaction in the supply chain. The term ‘value addition’ implies the increase in value of goods and services at each stage of production or transfer of goods and services. VAT is a tax on the final consumption of goods or services and is ultimately borne by the consumer. VAT comes under the state list. Tax payers can claim credit for the taxes paid at earlier stages and purchases known as Input Tax Credit, by producing relevant tax invoices. The credit can be used to setoff any VAT tax liability.

Different rates of VAT are charged depending on the category to which the goods belong. Rates vary for essential commodities, bullion and valuable stones, industrial inputs and capital goods of mass consumption, and others. Petroleum tobacco, liquor and so on are subjected to higher rate and differ from state to state.

Notably, there is no VAT on imports and export sales are not subjected to VAT. Therefore VAT charged on inputs purchased and used in the manufacture of export goods or goods purchased for export, is available as a refund.

Note: The Central Sales Tax which is levied on inter-State sales would be eliminated gradually.

Stamp Duty 

It is a tax that is levied on the transaction performed by means of a document or instrument as per the regulations of Indian Stamp Act, 1899. It is collected by the government of the state where the transaction is carried out. Stamp duty rates vary between the states.

Stamp duty is paid on instruments, which are essentially a document to create, transfer, limit, extend, extinguish or record a right or liability.  Document acquires legality once it is stamped properly after the payment of the requisite stamp duty charges. Stamp duty is payable for transfer of shares, share certificate, partnership deed, bill of exchange, shares, share transfer, leave and license agreement, debentures, gift deed, bank guarantee, bonds, demat shares, development agreement, demerger, power of attorney, home loans, houses & house purchase, lease deed, loan agreement and lease agreement.

State Excise

Power to impose excise on alcoholic liquors, opium and narcotics is granted to States under the Constitution and it is called ‘State Excise’. The Act, Rules and rates for excise on liquor are different for each State.

In addition to the above taxes by the Central and State Governments the local bodies have the authority to levy tax on properties, octroi/entry tax and tax onutilities

OTHER KEY NOTES

Filing of VAT, CENVAT, Service Tax returns

Periodic returns must be submitted by companies registered for CENVAT or VAT/CST or Service Tax in India.

• CENVAT filings are monthly, on the 10^th day following the period end.
• VAT reporting is either monthly or quarterly, depending on the particular State’s rules.
• Service Tax filings are bi-annual.

Permanent Account Number (PAN)

PAN is an all India, unique ten-digit alphanumeric number, issued in the form of a laminated card by the Income Tax Department.

Who Must Have a PAN

Every person,—

• if his total income or the total income of any other person in respect of which he is assessable, during any previous year, exceeded the maximum amount which is not chargeable to income-tax; or
• carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed INR 500,000 in any previous year; or
• who is required to furnish a return of income or
• being an employer, who is required to furnish a return of fringe benefits

PAN is increasingly being recognized as a valid Identity Proof across India and a mandatory document for important transactions such as purchase of property, motor vehicles, share transactions, opening of bank accounts, obtaining loans, maintaining deposits etc., therefore any person not fulfilling the above conditions may also apply for allotment of PAN.

Tax Deduction at Source (TDS)

The Income-tax Act enjoins on the payer of specific types of income, to deduct a stipulated percentage of such income by way of Income-tax and pay only the balance amount to the recipient of such income. Some of such incomes subjected to T.D.S. are salary, interest, dividend, interest on securities, winnings from lottery, horse races, commission and brokerage, rent, fees for professional and technical services, payments to non-residents etc.

Tax Collection at Source (TCS)

Tax is collected at the point of sale. It is to be collected at source from the buyer, by the seller at the point of sale. Such tax collection is to be made by the seller, at the time of debiting the amount payable to the account of the buyer or at the time of receipt of such amount from the buyer, whichever is earlier. The goods to be subjected to TCS are clearly specified and the type of buyers, sellers and purpose are clearly defined in the Act. Tax rates vary depending on the goods.

Note: All those persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for and obtain Tax Deduction and Collection Account Number (TAN), a 10 digit alpha numeric number, which is required to be quoted in all documents involving TDS/TCS transactions. Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty.

Double Taxation Relief

India has entered into Avoidance of Double Taxation Agreement (DTAA) with 65 countries including countries like U.S.A., U.K., Japan, France, Germany, etc. The agreement provides relief from the double taxation in respect of incomes by providing exemption and also by providing credits for taxes paid in one of the countries. These treaties are based on the general principles laid down in the model draft of the Organisation for Economic Cooperation and Development (OECD) with suitable modifications as agreed to by the other contracting countries. In case of countries with which India has double taxation avoidance agreements, the tax rates are determined by such agreements and vary between countries.

Unilateral Relief

The Indian government provides relief from double taxation irrespective of whether there is a DTAA between India and the other country concerned, if

1.      The person or company has been a resident of India in the previous year.

2.      The same income must be accrued to and received by the tax payer outside India in the previous year.

3.      The income should have been taxed in India and in another country with which there is no tax treaty.

4.      The person or company has paid tax under the laws of the foreign country concerned.