For-profit medical colleges may become a reality if the draft amendments to the National Medical Commission’s (NMC) regulations for establishing a new medical college go through.The proposed amendments to the Establishment of New Medical Institutions, Assessment & Rating Regulations, 2023, which were placed in the public domain on July 13, include one that will allow companies with the primary objective of profit generation to become eligible to establish medical colleges or medical institutions. Objections and suggestions to the draft are to be submitted within 30 days.The 2023 regulation allowed only “section 8 companies” to establish medical colleges. Under Section 8 of the Companies Act, such a company is a non-profit organisation in which surpluses can only be reinvested in charitable objectives. The amendment will allow all companies incorporated under the Companies Act, 2013 to start medical colleges.In January 2017, the erstwhile Medical Council of India had amended the Establishment of Medical College Regulations 1999 to allow all companies registered under the Companies Act, 1956 to be listed among organisations permitted to set up a medical college. The same amendment notification also allowed any autonomous body/society/trust to be converted into a company. However, the MCI was disbanded and replaced by the NMC constituted in September 2019. The fresh regulations for establishment of medical colleges drafted by the NMC allowed only section 8 companies to set up colleges.In May 2017, Vedanta, the mining conglomerate, established the first private limited medical college, Vedantaa Institute of Medical Sciences in Palghar through the entity Vedantaa Institutes of Academic Excellence Private Limited. The institute wrote to the state government that since it was registered as a private company, it was allowed to make profits and that its fees did not require the approval of the state fee regulatory authority. Though the institute was later forced to submit to fee regulation, its fees remain amongst the highest among private medical colleges in the state (Rs 15.7 lakh for management seats in 2025) barring deemed university colleges.Ironically, fees charged by deemed university medical colleges, which are established by trusts and societies and are supposed to be non-profit, are among the highest, and states do not have any quota of seats with lower fees in these institutions. Fees charged by these colleges are not controlled by any regulatory body.The Supreme Court had held in 1993, and again in 2002, that education was charity and disallowed educational institutions from engaging in “profiteering” but allowed “reasonable surplus” to meet the cost of expansion and augmentation of facilities. Till 2009, the official stance was that education could not be for sale or a for-profit venture. Hence on paper, most private medical colleges were run by charitable trusts and societies despite their high tuition fees, illegal capitation fees and other charges. However, in February 2010, the then government allowed companies registered under the Companies Act to open medical colleges with the caveat that “permission shall be withdrawn if colleges resort to commercialisation”.By 2016, the government was arguing that the no-profit stipulation was discouraging companies from coming forward to set up colleges and that profits were being made in non-transparent ways and that if profits were legally permitted, it would at least yield income tax for the exchequer. This is what led to the 2017 amendment.
