Let the rich pay for tuition

Feb 09 2013, 17:33 IST
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SummaryA moderate Rs 15,000 a year from half the students in government colleges will meet a sixth of the deficit reduction target

increase in annual tuition of Rs 15,000. Many students pay multiples of this level for high-school education — remember, their parents are in the top 5 per cent of all income earners. The revenue generated from Rs 15,000 a year, from the top half of college goers attending government colleges (approximately 25 per cent of 22 million, or 5.5 million) is Rs 8,250 crore a year, or approximately 0.08 per cent of GDP. Our fiscal deficit is slated to be reduced to 4.8 per cent of GDP, a decline of 0.5 percentage points — a modest cut in education subsidy alone yields 16 per cent of this reduction.

Will there be protests if tuition is raised for rich students? Let me see — these students will say that they are paying more than three times this amount for private colleges, but the government should subsidise them, and therefore they will lead a demonstration? The CPM will argue that we cannot tax rich students and taxi fares must be reduced. And Mamata Banerjee will argue that her bankrupt state will continue to provide free education to the rich, as required by the laws of equity and inclusive growth.

The writer is chairman of Oxus Investments, an emerging market advisory firm, and a senior advisor to Blufin, a leading financial information company

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