Rahim Khan | India Tomorrow
JAIPUR—COVID 19 has brought the education city of Kota in Rajasthan to a screeching halt. Known for its flourishing coaching classes industry for competitive exams, the city currently faces an unprecedented financial crisis where the hostel owners face extinction of trade and debts mounting to the tune of Rs 1000 crores.
Between 1.50 lakh to 2 lakh students who dream to become either engineers or doctors enroll themselves for coaching at Kota every year and are the mainstay of the city’s economy. With the outbreak of COVID 19, coaching is completely shut and long term closure has impacted the hostel owners in a big way leading to serious financial difficulties.
Kota city is known for its par excellence coaching centres across the country. Students are coached for successfully cracking the entrance exams of engineering and medical professions.
Currently between 2500 to 3000 students hostels in the city are shut with their owners facing severe financial difficulties. The hostel owners have aggregate loan liabilities estimated to be worth Rs 1000 crores for which lakhs of rupees are to be paid to the creditors by way of Equated Monthly Instalments (EMI)’s.
According to Kota Hostel Association, there are nearly 3000 hostels in the city having around 1.25 lakh rooms. The city saw an aggregate turnover of Rs 12 crores through the rooms while the PG facilities clocked around Rs 450 crores every year.
With the shutdown, coaching was discontinued since the lockdown began. Currently, there is no possibility of return of students with zero earnings for the hostel owners during last couple of months. At a time, when it has become difficult for the hostel owners to pay wardens, security staff, conservancy staff and others, regular payment of the pending EMI’s is well-nigh impossible.
The hostel owners were granted reprieve by the banks granting them flexibility in EMI payment till August 31 but since the period has expired, they find themselves in a Catch-22 situation once again. Thousands of employees associated with the industry have lost their jobs. The hostel owners are demanding compensation from the state and union governments.
A hostel owner narrated that banks are pestering them with SMS’es and phone calls asking them to deposit the EMIs following expiry of the moratorium period. Earlier, the hostel owners were paying an aggregate of Rs 250 crores towards EMI’s but currently they are out of business and have started new business to eke out a living. The deteriorating condition of the coaching industry has forced some owners to sell off their furniture and inventories to get money for survival.
Former General Secretary of Hostel Association Pankaj Jain said than an expenditure between Rs 30,000 to Rs 40,000 is incurred on each on the big hostels per month for its maintenance and upkeep. “Between 10 to 15 persons were employed at one hostel and roughly 3 lakh persons are associated informally with the coaching economy of Kota”, he said.
Constitution of Joint Hostel Sangharsha Samiti
According to the rules, the bank issues a notice to the debtor in case of three defaults of EMI payment and after that initiates the NPA process. If the defaulter does not pay up, then the property is seized. Taking this coercive action into consideration, Kota Hostel Association, Chambal Hostel Association and Koral Hostel Association have joined hands and formed the joint committee to take on the banks.
The Association has met District Collector and requested that the moratorium period be extended till March 2021 and said that they will prefer death by euthanasia if their demands are not met with. Besides, the committee has threatened a public agitation over the issue.
Shubham Agarwal, Committee member and President of Chambal Hostel Association said, “Hotels, vegetable vendors, autos, grocery shops owners, mobile shops and others are associated with coaching business. There is a dark cloud of economic ruin floating over Kota. All businesses are shut and as a result, it is becoming very difficult to pay the monthly EMIs,” he said.
Committee members air their grievances to Lok Sabha Speaker
The association members met Lok Sabha Speaker Om Birla at his residence and apprised him of their pressing and precarious financial condition including shutdown of schools and coaching classes in Kota. Birla assured them schools and coaching will resume soon. The representative body comprised of Alan Students Welfare Association Society President Mukesh Srivastava, Vivek Rajvanshi, LBS Chairman Kuldeep Mathur, BSN Director Dr Nakul Vijay , Sarvodaya School Director Dr Azhar Mirza, Bharati School Director Shalabh Vijay including other schools and coaching institute representatives.