The University of Madras is at risk of a complete power outage if it fails to settle its ₹80 lakh electricity bill after clearing the hold on its 37 bank accounts imposed by the Income Tax (I-T) department. According to a report by The New Indian Express, these accounts have been frozen by the I-T department due to alleged nonpayment of ₹424 crore in tax dues.
Regulations state that if an institution receives over 51% of its revenue as grants from the state or central government, it is classified as a government institution and exempt from income tax. However, due to numerous audit objections, the university has not received grants from the Tamil Nadu government since 2017. Consequently, the I-T department considers the university a private institution and has imposed a tax of ₹424 crore for the period from 2017-18 to 2020-21.
University officials report unproductive discussions with income tax officials, who demand an immediate ₹20 crore deposit to lift the hold on bank accounts, an amount the university cannot afford.
The hold on bank accounts has led to bounced cheques issued by the university in the past few days. If electricity bills are not paid by, the university faces the possibility of power disconnection, affecting classrooms, hostels, and routine operations.
The university’s financial crisis not only jeopardizes the salaries and pensions of employees and pensioners but also impacts students, as fellowship and scholarship dues cannot be cleared. It requires a minimum of ₹18 crore per month for recurring expenses, including ₹7 crore for salaries and ₹8 crore for pensions.
Established 166 years ago, the University of Madras is known for producing six former Presidents and two Nobel Laureates. However, today it is in financial mess.
In addition to freezing 37 fixed deposit and bank accounts at the State Bank of India, Chepauk branch, the I-T department has also placed a hold on accounts with the Tamil Nadu Power Finance and Infrastructure Development Corporation, where funds such as corpus fund, endowment funds, donations, and earnings from various sources are deposited.
University officials and professors express concern about the unexpected financial crisis and its impact on daily operations, attributing the situation to government neglect and corruption over the years. With over 4,000 audit objections reduced to 1,900, the university faces challenges in securing grants from the state government, and the absence of a full-time auditor due to financial constraints further complicates matters.
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