Lets Get Serious On The Education Objective

Updated: Jul 1 2004, 03:45am hrs
What we have in this government is something that we have hoped for, for a long time. At its helm is a person of remarkable integrity, commitment to development and a desire to do innovative thinking. There is also a document, called the Common Minimum Programme, which is supposed to lay down the objectives of the new government. Frankly, as far as the objectives are concerned, there is very little to disagree with. The real issue is how the objectives will be attained.

As is the case for most economics-related issues, meeting these objectives requires resources. Economic policy pronouncements have no value unless governments can commit resources necessary to implement them. Everyone is eagerly, and with some trepidation, waiting for the outcome of the first budget exercise of the new government. The anxiety is essentially due to the looming possibility that there will be a new set of taxes to raise additional revenue. The Indian tax-GDP ratio is lower than many countries at comparable levels of development. India also needs increased public spending on governance and infrastructure. Then why are people anxious about new taxes

The first reason is that while everyone pays some amount of indirect taxes, very few pay direct taxes. Those who pay direct taxes are worried that the government will fall for the soft option of increasing the tax rate of such people, without doing much to increase the tax base. How can one increase the tax base There are two excellent documents lying with the government the Kelkar Committee reports on direct and indirect tax which talk extensively on how to rationalise the tax structure and improve administration to widen the tax net. The government has expressed some intent to implement these; the question that remains is how far this will be carried out.

Take for example the tax on agriculture. Even if you have the same tax slabs as in non-agricultural income tax, the farmers paying taxes will be the richest among the lot. They are not only the richest among all agriculturalists; they will be rich among all sections of the Indian population. Consequently, there are very few people who will disagree with the governments effort to push for agricultural income tax. Interestingly, this is one case where there is agreement among industry and labour, most right and Left parties, as well as large sections of the general population. However, most people also believe that this will never happen! And that is why people are worried about a new set of taxes it will be on those who are already paying taxes.

While most of the tax paying Indian polity is more or less resigned to the prospect of more taxes, a thing that worries them more is whether the extra tax revenue will be properly utilised. As I have remarked before, most people cannot disagree with the objectives of the Common Minimum Programme and the fact that resources are needed to implement them. But how will this happen

If the much talked about education cess is going to go into the general coffers of the government, will it ever be spent on education Or, will it be spent as fertiliser subsidy in the name of the poor farmer, who seldom has access to any subsidised fertiliser The fear is that even if it goes to education the first time around, sooner or later, it will be used for reasons far removed for providing education to the poor. What if an imminent assembly election is to be won Or, some coalition partner wants a special package for a particular state

Second, suppose this battle is won and the collection from the cess on education is, indeed, set aside in a separate account. How will this amount be utilised Will it be through the building of new schools that get washed away in the first drizzle Or, will it be through the appointment of more government teachers who can stay at home and earn a salary This is important to know as report after report shows how money has been, and is being wasted, or stolen, in the name of running schools. People are most worried about how the education objective will be implemented.

This is not to say that this government is any less honest than other government. We know that our Prime Minister is of impeccable integrity, something that has been demonstrated on more than one occasion. We also know that there are enough people in his cabinet who are still in the process of proving their integrity. More importantly, we know that you cannot run a country where the success of institutions depends on how honest a leader is. A better alternative is to ensure that the institutions have checks and balances that keep leaders honest.

So, suppose the government said that people, corporations and other tax-paying entities, have a choice. They can pay up the tax, or spend an equal amount of money on reaching education to the poor. This is not a revolutionary idea we are already doing such things by allowing tax-exempt contributions to specific charities. What it allows the general population, which is not averse to spending on others education, to do, is to vote with their feet. If the government education programme is not being run properly, it will encourage people to get away from contributing to it and give it to organisations that are actually delivering education to the poor. This will show up in government statistics and accountability will be maintained.

In the process, the government will save the costs of monitoring its education programme and the cost of hiring new vigilance staff. After all, public-private partnership should not become a buzzword, or an occasion to sit at the same panel and have tea. It should be more active in keeping each other honest. We should measure our success by how many poor children we educate, not by how much effort we put in, or what has been the amount of budget allocation to education each year. For once, let us get serious.

The author is director, India Development Foundation