The White Paper on Black Money in India, published in May 2012, estimated that deposits by Indians in all Swiss banks at the end of 2010 amounted to Rs 9,300 crore or about $1.5 billion. That much money, if not more, is changing hands in the black market of medical education in India every year.

Back-of-the-envelope calculations show that the ‘sale’ of MBBS and post graduate seats in medical colleges rakes in about Rs 10,000 crore or more in a year. And that’s a conservative estimate. Here’s the calculation.
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There are a total of about 8,100 MBBS seats in the management quota in private colleges (approximately 30% of the 27,000 seats in such colleges). The price of each seat varies from about Rs 55 lakh in Kerala and some not-so-well-established colleges in Tamil Nadu and UP to over Rs 75 lakh in colleges in Maharashtra, Andhra and Gujarat. At a conservative average of Rs 60 lakh per seat, the money generated is Rs 4,860 crore. Here’s why this could be an underestimation. Scams exposed almost every year show that although the management and NRI quota is said to be 30%, in reality the number of seats sold is much higher. In many states, the permitted management quota is higher ” in Madhya Pradesh, for instance, private medical colleges are allowed to keep 15% of seats for NRI quota and 44% for management, bringing the total saleable seats to nearly 60%.

In the Vyapam scandal in MP, 220 of 378 seats in the state quota or about 60% of the state seats were sold to ineligible students last year. “The state quota seats are filled by scorers hired by admission rackets. The scorers are later paid to vacate the seats, which are filled after the first counselling session for premium rates,” explained Dr Anand Rai, the whistle-blower in this scam, which exposed the involvement of senior politicians and bureaucrats in the medical admission racket. Similar rackets have been exposed in Karnataka and other states too, where the bulk of seats in private medical colleges were sold. The sale of PG seats is at an even higher rate. Seats in coveted fields like radiology are said to touch Rs 3 crore, while seats in gynaecology and dermatology could be available for Rs 1.5-2 crore. In most places, seats are sold even before the results for the All India Common Entrance Test were declared. In some states with no regulation, almost all PG seats in the private sector are sold.

Similar calculations for MD and MS seats as for MBBS seats show that these would fetch another nearly Rs 2,500 crore. Thus, the ‘market’ for medical seats as a whole is in excess of Rs 7,300 crore even by the most conservative estimate.

There are other factors to take into account ” for instance, in minority institutions almost 80% seats are management quota; in some states this quota is 40%; in most states there is little or no regulation of PG seats, so almost the entire lot gets sold off; in many states, the so-called state quota is diverted through various kinds of fraud and sold off. Factor all of this in, and the size of the market is actually probably over Rs 10,000 crore or $1.5 billion-plus, all of it in black money.

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