A Brief History of India’s Education System

Part 7: Mobilising Funds for ‘Education for All’

[This article is the last and concluding part of a series of articles on ‘India’s Education Journey: From Macaulay to NEP’. This is the twelfth part of this series. The previous articles have been published in previous issues of Janata Weekly.]

How Can the Government Increase its Revenues to Finance Universal, Free, Good-Quality Education for All Children

and also increase its social sector expenditures in other areas to make available good-quality and free or affordable health care to all our people, guarantee nutrition and care to all our pregnant women and children, guarantee a decent pension to all citizens above the age of 60 years … and make it possible for all the people of our country to lead dignified lives?

We outline below some measures the Centre can take to increase its revenues, and also make an estimate of the resulting increase in revenues.

i) Reducing the Huge Tax Concessions Given to the Rich

As discussed above, the Modi Government has been giving around Rs. 5.5 lakh crore in tax concessions to the rich every year. Even a 50 percent reduction in these concessions would result in an increase in the government’s annual tax revenues by Rs. 2.75 lakh crore. (This figure excludes the possible increase in revenues if the government takes action to curb illicit flows of money. Including that, this figure can double.)

ii) Reducing the Huge Transfers of Public Funds to the Rich

The Modi Government is transferring huge sums of public money—of the order of several lakh crore of rupees—to big business houses. Just the loan waivers total more than Rs. 2 lakh crore every year. Even if it partially withdraws these concessions, it will increase government revenues by several lakh crore rupees every year. For our calculations, we conservatively assume this increase to be Rs. 3 lakh crore every year.

iii) Imposition of a Wealth Tax on the Richest 1 Percent

There is nothing very radical about a wealth tax. In fact, inequality in the world has grown to such extremes that many mainstream economists are now calling for the reintroduction of wealth taxes to reduce inequality and fund social sector spending. The EU Tax Observatory (EUTO) has proposed a global wealth tax on ultra-rich individuals. In 2024, the G-20 formally discussed such a proposal to raise revenues for meeting the UN Sustainable Development Goals. In January 2024, over 250 millionaires and billionaires from 17 countries sent a letter to leaders at the World Economic Forum in Davos, urging them to introduce wealth taxes to help pay for better public services around the world.[1]

A working paper by economists Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty and Anmol Somanchi at the World Inequality Lab, Paris has estimated the increase in revenues if the Government of India imposes a small wealth tax on the ultra-rich. Their proposal calls for the imposition of a wealth tax on just the richest 0.04 percent of adults in the country (or 3.7 lakh adults) whose net wealth exceeds Rs. 10 crore. They have given three possible variants of wealth tax; we take their moderate variant for our calculations. Under this, they estimate that an annual wealth tax of 2 percent on those with net wealth exceeding Rs. 10 crore, and an additional 2 percent wealth tax on those with net wealth exceeding Rs. 100 crore, would have yielded a revenue of 4.23 percent of GDP in 2022–23, or Rs. 11.4 lakh crore.[2] Even if we assume a modest increase in the wealth of the rich by 15 percent per year [3], the wealth tax revenue for 2025–26 works out to a huge Rs. 17.34 lakh crore.

iv) Imposition of an Inheritance Tax on the Richest 1 Percent

This tax is also perfectly in sync with the ideology of capitalism. While supporters of capitalism argue that the rich are so because of their special qualities like ‘innovativeness’ and ‘entrepreneurship’, there is no reason why their children should automatically inherit all their wealth; and so it is perfectly justified if governments impose an inheritance tax on the very rich. Inheritance taxes on the rich are considered to be an important means of reducing inequality. Top inheritance tax rates are 55 percent in Japan, 50 percent in South Korea, 45 percent in France, 40 percent in the UK, 34 percent in Spain, 33 percent in Ireland and 30 percent in Belgium and Germany.[4]

Apart from their proposal for imposition of a wealth tax on the richest 0.04 percent individuals in the country, Nitin Kumar Bharti and his colleagues (in the paper cited above) also propose the imposition of an inheritance tax on them. In their moderate variant, they propose an inheritance tax rate of 33 percent on those with estates exceeding Rs. 10 crore in valuation, and 45 percent on estates exceeding Rs. 100 crore. They estimate that this would yield additional revenue to the government of 0.36 percent of the GDP in 2022–23, or Rs. 0.97 lakh crore. Assuming an average annual increase in the wealth of the rich by 15 percent, the inheritance tax revenue for 2025–26 works out to Rs. 1.47 lakh crore.

v) Total

All the four suggestions given above would fetch the Centre an additional (2.75 + 3 + 17.34 + 1.47 =) Rs. 24.56 lakh crore in revenue for 2025–26.

Social Sector Expenditures Can Be Significantly Increased

Assuming that the actual social sector expenditures of the general government (Centre and States combined) in 2025–26 remain at the highest level reached during the Modi years (7.6 percent), this would amount to approximately Rs. 27 lakh crore.

This means that if the Centre were to implement just the modest proposals outlined above for increasing revenues, the total social sector expenditures of the Centre and States combined could nearly be doubled. This additional revenue would be more than enough to finance:

• A tripling of the education budget: additional spending required = Rs. 2.58 lakh crore.
• A tripling of the total health budget: additional spending required = Rs. 2.08 lakh crore.
• A universal (non-contributory) pension for all elderly: Rs. 3,000 per month for all the 15 crore elderly in the country, estimated cost = Rs. 5.4 lakh crore.
• Implementation and expansion of a universal PDS, to provide all citizens 35 kg of rice/wheat and 5 kg of millets (at Rs. 3, 2 and 1 per kg, respectively) and 2 kg of pulses and 1 kg of edible oil (with a subsidy of Rs. 100 per kg on both pulses and edible oil) per household per month: additional spending required = Rs. 1.45 lakh crore [5]
• Tripling of government expenditure on nutrition schemes (including Anganwadi services, Pradhan Mantri Matru Vandana Yojana and Mid-Day Meal scheme): additional spending required = Rs. 74,000 crore.
• Genuine implementation of MGNREGA as demanded by the NREGA Sangharsh Morcha: additional spending required = Rs. 2 lakh crore.
• Tripling of government spending on agriculture: additional spending required = Rs. 2.76 lakh crore.

The total cost of implementing all these seven proposals comes to Rs. 17.01 lakh crore.

Even after implementing all these above suggestions, the government would be left with Rs. 7.55 lakh crore to finance many more such essential programmes.

Apart from significantly increasing the standard of living of the people, these measures would also create crores of jobs. They would stimulate genuine economic growth, and through the multiplier effect, also lead to a rise in government revenues, enabling a further increase in social sector expenditures. The general government expenditure on education can then rise to 6 percent of GDP, allowing the improvement of all schools to the quality level of Kendriya Vidyalayas.

Educate! Organise! Fight!

The neoliberal economic policies being implemented in India are not leading to development. Instead, they are transforming our country into a ‘first world–fourth world’ society. A recent paper by Thomas Piketty, Lucas Chancel and Nitin Kumar Bharti—all internationally renowned economists—says that these policies have made India one of the most unequal countries in the world. By the end of 2023, India’s richest 1 percent citizens owned 40.1 per cent of the country’s wealth, the highest since 1961, while the bottom 50 percent owned only 6.4 percent of the total wealth. The authors, in fact, go so far as to say:

The ‘Billionaire Raj’ headed by India’s modern bourgeoisie is now more unequal than the British Raj headed by the colonialist forces.[6]

An important consequence of these policies is that the country’s children are once again being denied meaningful, liberating education. Crores of children from the marginalised sections of society are being pushed out of school into vocational courses. They are being forced back into caste-based occupations or compelled to take up whatever low-wage jobs are available in the market. Education is once again becoming a preserve of children from the upper classes and upper castes.

‘Education for All’ was a central slogan of our freedom struggle and is an important fundamental right guaranteed by the Indian Constitution. The Narendra Modi-led BJP Government is systematically dismantling this right.

We have shown above that over the past nearly eight decades since independence, India has generated enough wealth to realise the economic vision of our country’s founders embedded in the Directive Principles of the Constitution. However, this wealth has got concentrated in the hands of a tiny elite. If the government imposes taxes on just the richest 0.04 percent of the people in the country, that would raise enough revenues to implement these Directive Principles.

In demanding that the government implement these suggestions, we are only asking the government to implement the dreams of our country’s founding fathers, which are encapsulated in the Directive Principles of the Constitution. They call upon the State to strive to:

• build an egalitarian society and a social order in which justice, social, economic and political, shall inform all the institutions of national life [Article 38 (1)];
• minimise inequalities in income [Article 38 (2)];
• direct policy towards ensuring that the operation of the economic system does not result in the concentration of wealth [Article 39 (c)];
• ensure that children are given opportunities and facilities to develop in a healthy manner and in conditions of freedom and dignity [Article 39 (f)];
• make effective provision for securing education and public assistance in cases of unemployment, old age, sickness and disability, and in other cases of undeserved want [Article 41];
• regard raising the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties [Article 47].

Dear friends,

These are dark times, but let us not lose hope. Whenever there is winter, spring can’t be far behind. And already, we can see the first signs of the onset of spring, the first flowers springing up across the country. In Karnataka, secular–democratic activists belonging to different groups, who believe in our Constitutional values, have come together to build a State-wide platform named Eedalu (Rise Up) Karnataka. Over the past two years, they have successfully mobilised thousands of people across the State to build a powerful movement in defence of the Constitution. In Maharashtra, in an exciting development, some leading activists have taken the initiative to launch a platform—Samvidhan Jagar Abhiyan (Constitution Awareness Campaign). Within just a few months, they have been able to bring together several organisations and hundreds of activists, and have launched a State-wide campaign to take the values and vision of our Constitution to every home.

Yes, it is possible to build a new world! Let us remember: the future is not something we await; it is something we shape. Let us stop being sceptics, dream of a better future, and believe that it is possible to change the world and build a society as visualised by our Constitution makers. Above all, let us not just believe. Let us act.

Notes

1. For a more detailed discussion on this, as well references, see: Neeraj Jain, Union Budget 2014–24: An Analysis, op. cit., pp. 271–73. This is also discussed in our article available online: Neeraj Jain, “Union Budgets 2014–24, Article 18: Proposal for an Alternate Budget”, 6 April 2025, https://janataweekly.org.
2. Nitin Kumar Bharti et al., Towards Tax Justice & Wealth Redistribution in India: Proposals Based on Latest Inequality Estimates, 24 May 2024, pp. 5–6, https://wid.world.
3. As per Forbes, the wealth of the richest 100 Indians has increased at an annual rate of 18 percent during the past 2 years: “India’s 100 Richest 2024: Fortunes of Indian Tycoons Jump 40% Blowing Past $1 Trillion”, 9 October 2024, https://www.forbes.com.
4. R. Ramakumar, “Inheritance Taxes: A Key Step Towards Reducing Economic Inequality”, 30 April 2024, https://frontline.thehindu.com.
5. Our calculation. We have explained the methodology followed for this calculation in our article: Neeraj Jain, “For a Universalised Public Distribution System”, Janata Weekly, 27 August 2017, https://janataweekly.org. We have updated this calculation with the 2024–25 economic cost for distribution of foodgrains as estimated by the FCI: for wheat, Rs. 27.74 per kg; for rice, Rs. 39.75 per kg. [Cited in: Demand for Grants 2024–25 Analysis: Food and Public Distribution, https://prsindia.org.] We assume economic cost of millets to be Rs. 26 per kg. Then we have assumed 6 percent inflation to calculate the cost for 2025–26.
6. Nitin Kumar Bharti, Lucas Chancel, Thomas Piketty and Anmol Somanchi, Income and Wealth Inequality in India, 1922–2023: The Rise of the Billionaire Raj, 18 March 2024, https://wid.world.

[Neeraj Jain is a social activist and writer. He is the convenor of Lokayat, an activist group based in Pune. He is also the editor of Janata Weekly, India’s oldest socialist magazine. He has authored several books, including Globalisation or Recolonisation?, Education Under Globalisation: Burial of the Constitutional Dream, Nuclear Energy: Technology from Hell, and most recently, Union Budgets 2014-24: An Analysis.]