In India, there is little space to wring the already tax-paying rich more on taxes (Photo: PTI)
In India, there is little space to wring the already tax-paying rich more on taxes (Photo: PTI)

Opinion | The solution to JNU fee hike issue: Let’s get rich to pay for the poor

  • The 1st solution is to get the well-off in JNU, to pay market rate not only for themselves but also for one friend they choose
  • A 2nd way is to begin new courses at full market prices that students are willing to pay for and use that revenue to subsidize the others

Delhi’s walled-in centre of education and residence is in the middle of a mobocracy that resulted in pitched battles with the police for violating the law, bitter graffiti, a statue of Vivekananda vandalized with communally inflammatory barbs, holding guests to the campus hostage and behaviour more suited to rioting brigades than pursuers of fine subjects that make the world a better place. The JNU mobs are making a proposed hostel fee hike a story about the entitled ripping into the poor, disposed and the weak. The issue is of a hike after about 40 years in the hostel boarding and lodging fees that students have to pay—a hike from an insignificant 10 and 20 a month. The upset is also about asking students to pay for utility and service charges that were zero till now.

The JNU administration rolled back the original fee hike that did not differentiate between the poor and the not poor, and has a new grid in place where BPL card holders pay less than the others, but more than 10 for a double-seater room they are currently charged. You can see the rates here. This did not make much difference to the agitation; if anything, it has become more virulent. I wrote a piece about the hike and looked at whether or not we should link it to an inflation index and that there is no case for stagnant fees for anybody. You can read the piece here.

The push back to the column has come from many places and rests on four legs. One, JNU is about education for all and it should be free. Two, we can afford to pay but we protest for those who can’t. Three, you are entitled and have no idea what it is like to be poor. Four, JNU is the last bastion standing against fascism and this is a part of the fight against majoritarianism.

I want to look for solutions that solve the first and second points—free education for all and the ability to pay. The next two are more of rants and political posturing than real push backs on a fee hike issue. So we need to solve for affordable education without bankrupting the state. On the cost side, the demand is for high teacher salaries, good facilities, free or very low-cost boarding and lodging, high scholarships and low or no fees. On the revenue side are government subsidies (academic receipts are 2% of the total budget), which means the taxpayer’s money. But unlike, say, a Switzerland with a per capita income of over $80,000 and a highest income tax rate of 40% with a tax-GDP ratio of 28.5% (countries like France have this at over 45%), India has a per capita income of just over $2,000, the highest income tax rate of 42.74% and a tax-GDP ratio of just below 11%. This means there is little space to wring the already tax-paying rich more on taxes. How to get those out of the net into it is another story, with every attempt to use Aadhaar to do that violently fought by the same “left liberals".

Therefore, we need to look for ways to fund this high-quality, low-cost education. The first solution is to get the well-off in JNU, who are protesting for their not-so-well-off comrades, to pay market rate not only for themselves but also for one friend they choose. Well-off Indians gave up the LPG subsidy to pay market price for their cooking gas, something similar can be suggested to the rioting students. You pay for yourself and an economically weaker friend. Should the students who are financially able to pay not come forward themselves to pay market prices for education, boarding and lodging? A noble way to fight for those without is to offer to pay their share yourself rather than expect another set of people—the taxpayers—to pay.

A second way is to begin new courses at full market prices that students are willing to pay for and use that revenue to subsidize the others. In this way too the rich will pay for the poor. If that too is not acceptable, there needs to be another way to bridge this income-expenditure gap and get the rich to pay for the poor. Since the decision on raising money is left to the government to solve, the manner in which the government funds this should also be left to it. Therefore, it should be within the rights of the government to relocate JNU to another place where land cost is very low, say, Muradnagar or Rewari, or even a remote area that would benefit from a large central institution. The land so released be used for commercial and residential purposes. Think of high-rise apartments, luxury condos, movie halls, shopping complexes, sports facilities—all things that the rich are willing to pay for. No tree gets cut since the existing structures are rebuilt. The money thus received could create an endowment that would make education and facilities at JNU fully free for 50 years. Fifty years because, given the rate at which Indians are escaping poverty, there should be either no, or very few poor left, who can then be subsidized, in that time. Would that work? This is really the rich paying for the poor.

Monika Halan is consulting editor at Mint and writes on household finance, policy and regulation.

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