We all know the state of Indian education and successive governments’ failures in pushing for a jobless growth. At the end of almost 17 years of education, close to 85 per cent students who passed through a system designed, structured, tested and assessed by the State are told that they are ‘unemployable’. The failure of the policymakers and the state is palmed off on a young mind.
The reason is not tough to imagine. While primary and school education have been the favourite child of every government (and rightly so), higher education always got a step-motherly treatment. All because the private players stepped in where the governments failed. The government has abdicated its responsibility of creating capacities and funding higher education. This lead to lack of quality higher education institutions and the resultant measure on the outcomes.
Look at the current GST imposed on higher education. Every student pursuing UG/PG/research would be paying a 18 per cent GST on the following services availed:
Transportation to the college
Hostel and mess charges
Food at the college canteen
Testing and assessment charges
Housekeeping charges at the campus
Security at the hostel
While professional education is largely residential, the student is burdened with 18 per cent GST. And this has been done specifically by removing such an exemption that higher secondary school education already enjoys. A clause in the GST rules says “provided that nothing contained in clause (b) of this entry shall apply to an educational institution other than an institution providing services by way of pre-school education and education upto higher secondary school or equivalent”.
The step-motherly treatment is well considered and deliberate. It is not an oversight. For a country with Right to Education (RTE), working on reaping its demographic dividend, making its youth skilled and employable, aspiring to be the global source of trained manpower, this is shocking to say the least. Which government works on increasing the cost of education? Which government taxes students pursuing higher education?
This is not the first time that India failed its youth. We have to look at the investments that we made as a nation in higher education over the years:
Since 2004, we invested about Rs 5,76,654 crore in education. That is 3.82per cent of the total spend.
However, of this investment, Rs 2,45,053 crores is education cess imposed and collected from us as taxes. Remove that, and the investment comes down to 2.2per cent.
The trouble starts here. P Chidambaram, in 2007, said: “1 per cent on all taxes to fund secondary education and higher education and the expansion of capacity…”
Now, look at the spends on higher education.
Total higher education spend in the last 10 years has been: Rs 1,77,953 crore. Total plan expenditure for higher education has been Rs 1,02,352.
Total cess collected for higher education is Rs 86,537.55 crore.
Simply put, the government’s investment in plan expenditure meant for Higher Education is a measly Rs 15,514 crore.
Every government has abdicated its responsibility to create an able, employable nation that can contribute to the demographic dividend. They acknowledged the problem, collected taxes, but ensured that it subsidised their own responsibility through our monies.
The CAG report, commenting on the 2014-15 accounts says “The Secondary and Higher Education Cess (SHEC) was introduced in the Finance Act 2007 to fulfil the commitment of secondary and higher education. Scrutiny of the Union Finance Accounts for the period 2006-15 showed that a total collection of SHEC of Rs 64,228 crore had been made. However, unlike the creation of PSK in the case of primary/elementary education cess, neither a fund was designated to deposit the proceeds of SHEC thereto nor schemes identified on which the cess proceeds were to be spent. Consequently, the commitment of furthering secondary and higher education as envisaged in the Finance Act was not transparently ascertainable from the Union Accounts. Thus, the possibility of the diversion of funds for purposes not mandated under the Finance Act cannot be ruled out”.
The fact is that while the 2 per cent cess on primary education is being credited to PSK (Pradhamik Shiksha Kosh) and two marquee projects are being implemented (Sarva Shiksha Abhiyan(SSA) and Mid Day Meals (MDM)), there has been no fund designated to utilise the 1 per cent cess being collected for higher education. And all they do is to use it to supplement their own budgetary allocation, which anyways is supposed to happen.
So, what is our contribution to reaping the Demographic Dividend? A measly Rs 15,514 crores over 10 years. That is an abysmal 0.105 per cent of our total budget.
The new GST laws have only deepened the divide by punitively taxing our youth seeking a better education. You may not invest in higher education, but at least don’t tax students pursuing higher education. However, I would be surprised if anyone in the government, but for the Prime Minister would listen to this cry. Because he is the only one talking of reaping demographic dividend.
Will they? Will he?
Mahesh Peri is Founder & Chairman, CAREERS 360. He is a qualified CA, CMA and ACS.