A Transient Historical past of India’s Schooling System

Half 6: Is the Authorities Actually So Poor That it Can’t Present Schooling to All Our Kids?

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

Most developed nations have a really elaborate social safety community for his or her residents, together with unemployment allowance, common well being protection, free faculty schooling, free or subsidised college schooling, outdated age pension, maternity advantages, incapacity advantages, household assist reminiscent of baby care allowance, monetary help for these too poor to make a dwelling, and way more. Governments in these nations spend substantial sums for offering these social companies to their individuals.

The Modi Authorities claims that India is likely one of the world’s quickest rising economies and envisions India turning into a developed nation by 2047. No matter be the reality in these claims, on the very least, India’s social sector expenditures must be comparable with these nations at an identical degree of improvement. However a RBI report admits,

By way of GDP, the social sector expenditure, primarily constituting well being and schooling in India continues to stay woefully under friends. [1]

Whereas the common public expenditure on social companies within the OECD nations has remained round 21 p.c of GDP for the final a few years, and for the EU–27 has been even increased at almost 32 p.c of GDP, India’s social service expenditure (Centre and States mixed) is lower than 8 p.c of GDP (see Chart 6.1). Because the per capita GDP of the developed nations is way more than that of India, their per individual social sector spending is a number of instances increased than what these percentages recommend.

Chart 6.1: Social Sector Expenditure as % of GDP, 2022

Supply: for OECD: “Social Spending”, https://information.oecd.org; for EU: Authorities Expenditure by Operate – COFOG, https://ec.europa.eu; for India: Financial Survey, 2023–24.

On account of this low spending, India’s welfare companies—from well being to diet to pensions—are in a dismal state[2]:

1. India’s public well being spending is among the many lowest on the earth—it ranks 179 out of 189 nations.[3] Due to this, India is dealing with a ‘well being emergency’: it’s estimated that about 24 lakh individuals die annually from treatable illnesses due to lack of reasonably priced, good high quality public well being companies.[4]
2. A ‘starvation and malnutrition emergency’ grips the nation: in keeping with the 2024 State of Meals Safety and Diet within the World (SOFI) report printed collectively by 5 UN organisations, about 58.9 crore individuals—41.9 p.c of India’s inhabitants—suffered from average or extreme meals insecurity throughout 2021–23.[5] But, the federal government has slashed meals subsidy spending by almost 75 p.c (as a share of the funds) over the previous 5 years (2020–21 to 2025–26). As an alternative of offering foodgrains to the poor at subsidised charges, it’s extra fascinated with offering subsidised foodgrains to firms making biofuels for luxurious autos.
3. Our ruling regime is completely insensitive in the direction of the 5 crore youngsters within the nation who’re malnourished and the over 2 crore pregnant girls and lactating moms, majority of whom are affected by anaemia. It has reduce the funds for the essential Anganwadi programme—meant to offer supplementary diet to those teams—by 33 p.c over the previous decade. Almost 75 p.c of pregnant girls are even being denied the paltry monetary help promised to them underneath the NFSA—meant to partially compensate them for wage loss so that girls can take enough relaxation earlier than and after supply.
4. There are almost 15 crore individuals in India above the age of 60. Most of them labored for low wages within the casual sector and don’t have any financial savings to assist a dignified life of their outdated age. The least the federal government can do is give the aged a good pension. However the Modi Authorities’s allocations for pension schemes are scandalously low. The Indira Gandhi Nationwide Previous Age Pension Scheme gives simply Rs. 200 monthly (Rs. 500 monthly for these aged 80 years and above)—an insultingly meagre quantity.

Why are Social Sector Expenditures So Low?

The rationale for these abysmally low welfare expenditures is—the Modi Authorities has been doling out large ‘subsidies’ to the large company homes and the wealthy, to the tune of a number of lakh crore rupees yearly. These breathtaking giveaways are cleverly disguised as ‘incentives’ for financial development. In the meantime, in the case of funding important welfare schemes that present the naked necessities of life to the poor, the federal government pleads a scarcity of sources. To justify the cuts made in social sector expenditures, they’re derided as ‘wasteful’, ‘inefficient’ and inspiring ‘parasitism’.

Here’s a snapshot of among the subsidies being given to the wealthy:

i. Tax Cuts and Concessions to the Wealthy

The Modi Authorities has sharply diminished company tax charges. In September 2019, the bottom company tax price was diminished from 30 p.c to 22 p.c, and for brand new manufacturing firms from 25 p.c to fifteen p.c—making India’s company tax charges among the many lowest on the earth. The Finance Minister admitted that this could value the exchequer Rs. 1.45 lakh crore yearly.

India has no wealth tax. India additionally has nearly zero property tax.

Aside from low tax charges, the federal government has additionally been giving tax exemptions to the wealthy—in company taxes, revenue taxes and excise duties—to the tune of a number of lakh crore rupees yearly. An evaluation of Union Finances paperwork reveals that the full tax concessions to the company homes and the ultra-rich throughout the previous decade (2014–15 to 2023–24) work out to round Rs. 55 lakh crore.[6]

This can be a mind-boggling sum—it’s greater than the Union Finances for 2025–26 (Rs. 50.6 lakh crore)!

ii. Mortgage Write-Offs

Through the first ten years of the Modi Authorities (2014–15 to 2023–24), public sector banks wrote off loans totalling Rs. 11.57 lakh crore. After deducting recoveries, the quantity completely waived stands at Rs. 9.60 lakh crore—cash that may by no means be recovered. This determine excludes accrued curiosity; if that had been included, the full loss could possibly be as much as 4 instances increased.

Even after these large write-offs and waivers, public sector banks nonetheless had Rs. 3.36 lakh crore in dangerous loans (non-performing belongings or NPAs) as of June 2024. Given the federal government’s observe report, most of those are additionally more likely to be ultimately waived.

However that is simply the seen a part of the story. Moreover, public sector banks have restructured loans of the super-rich—a roundabout approach of writing off loans. Whereas precise figures are unavailable, these too are more likely to quantity to a number of lakh crore rupees.

Even when we make a conservative addition of the above quantities, the full mortgage waivers (official and disguised) over the last decade 2014–15 to 2023–24 must be of the order of Rs. 20–25 lakh crore.[7] Together with curiosity, the true determine could possibly be two to 4 instances increased.

iii. Switch of Public Wealth to the Non-public Sector

The Modi Authorities has handed over management of the nation’s mineral wealth and sources to non-public companies in return for negligible royalty funds; transferred possession of worthwhile public sector companies to international and Indian personal enterprise homes at throwaway costs; handed over management of infrastructure together with airports, ports, telecom community, and so forth. to its company buddies at vastly discounted costs; given direct subsidies (that’s, money transfers) to non-public companies as ‘incentive’ for investing in infrastructure tasks within the title of ‘public–personal–partnership’; and so forth.

These transfers have resulted in monumental losses to the general public exchequer—of the order of a number of lakh crore rupees yearly. For instance, whereas the federal government claims to have earned Rs. 46,000 crore in disinvestment revenue in 2022–23 A and Rs. 30,000 crore in 2023–24 RE, these gross sales have induced a notional loss to the general public exchequer of the order of Rs. 5–7 lakh crore, because of the undervaluation of those public belongings.[8]

iv. Refusal to Act In opposition to Black Cash

Through the 2014 Lok Sabha election marketing campaign, Modi promised that if voted to energy, he would convey again the black cash stashed away in tax havens overseas by the corrupt, and deposit Rs. 15 lakh within the account of each citizen.

After profitable the elections, his authorities made an entire U-turn on the problem. There have been a number of leaks exposing the names of Indians with unlawful international financial institution accounts—‘Swiss Leaks’ (2015), ‘Panama Papers Scandal’ (2016) and ‘Pandora Papers Rip-off’ (2021). Nonetheless, the Modi Authorities has not prosecuted a single particular person. As an alternative, it has diluted anti-corruption legal guidelines just like the Lokpal Act, the Whistleblowers Safety Act and the RTI Act.[9]

The federal government’s unwillingness to behave towards black cash has led to monumental income losses. Prof. Arun Kumar, considered one of India’s best-known specialists on black economic system, estimates that had the federal government taken steps to test black cash, the direct tax-to-GDP ratio would have conservatively risen from the current 6 p.c to 12 p.c [10]—yielding a further Rs. 18 lakh crore in income.

v. Electoral Bonds: The Largest Rip-off Since Independence

In 2017, the Modi Authorities rammed the Electoral Bonds Scheme via Parliament. Whereas the federal government claimed that scheme would convey transparency to political funding, in actuality, electoral bonds made the system of political funding opaque, and in addition created circumstances for quid professional quo preparations between corporates and ruling political events on the Centre and the States. After six lengthy years, in February 2024, the Supreme Court docket struck down the scheme as unconstitutional and ordered full disclosure of donations.

The information revealed that political events obtained donations of Rs. 16,492 crore via electoral bonds, with over half—Rs. 8,251.8 crore—going to the BJP. An evaluation of the electoral bond information by the Affiliation for Democratic Reforms revealed that at the least 33 company teams secured 172 main contracts and mission approvals—value a staggering Rs. 3.7 lakh crore—from the Modi Authorities, after donating Rs. 1,751 crore to the BJP via electoral bonds. In return for these donations, the BJP additionally allowed firms to interact in cash laundering, reduce corners in executing tasks leading to accidents and deaths, and diluted environmental laws, enabling company polluters to reap windfall earnings. Much more alarming, it allowed drug firms to get away with making sub-standard medication.[11]

Consequence of Transfers to Wealthy: Low Authorities Revenues

In each capitalist nation on the earth, together with the developed capitalist nations, whereas their governments basically run the economic system for the profiteering of the wealthy, in addition they acquire a big quantity of taxes from them and spend it on offering schooling, healthcare and different welfare companies for his or her individuals.

In distinction, in India, the tax and non-tax concessions and transfers to the company homes have reached such mindboggling ranges underneath the Modi Authorities that India’s whole authorities income as a share of GDP is among the many lowest on the earth. In line with the IMF Fiscal Monitor, in 2024, the overall authorities income as a share of GDP was

• 46.5 p.c for the 19 Euro space nations;
• 35.2 p.c for the Rising Market and Center Earnings Economies of Europe;
• 29.4 p.c for the Rising Market and Center Earnings Economies of Latin America;
• 20.9 p.c for Authorities of India (Centre + States mixed).[12]

If the Authorities of India had been to even partially cut back the huge tax concessions and transfers to company homes, and levy increased taxes on the super-rich, it might considerably increase public revenues—in all probability by as a lot as 40–50 p.c (from 20.9 p.c of GDP to round 30 p.c), bringing India in keeping with its international friends.

For 2025–26, a ten p.c improve on the whole authorities income as a share of GDP would quantity to Rs. 35 lakh crore. That’s greater than sufficient not solely to dramatically broaden public spending on schooling, but additionally to considerably improve funding throughout the whole social sector—enabling India to take actual steps towards turning into a genuinely growing nation.

We discover how this may be achieved within the subsequent article of this collection.

Notes

1. RBI Bulletin, April 2018, p. 98, https://rbidocs.rbi.org.in.
2. For detailed calculations of the information given on this part, see our ebook, Neeraj Jain, Union Finances 2014–24: An Evaluation, 2025, Aakar Books, New Delhi. The ebook offers information as much as Union Finances 2024–25; we have now prolonged the calculations to incorporate information for Union Finances 2025–26.
3. That is admitted by the Financial Survey 2020–21, p. 159.
4. Research printed in The Lancet, cited in: Swagata Yadavar, “Extra Indians Die of Poor High quality Care Than Resulting from Lack of Entry to Healthcare: 1.6 Million”, 6 September 2018, https://www.indiaspend.com.
5. The State of Meals Safety and Diet within the World 2024, https://www.fao.org.
6. For the methodology for this calculation, see our ebook, Neeraj Jain, Union Finances 2014–24: An Evaluation, op. cit., pp. 247–50. Similar calculations additionally obtainable on-line on this article: Neeraj Jain, “Union Budgets 2014–24, Article 16: Is the Authorities Actually Poor?”, Janata Weekly, 16 March 2025, https://janataweekly.org.
7. For an in depth dialogue of those calculations, and references, see our ebook: Neeraj Jain, Union Finances 2014–24: An Evaluation, ibid., pp. 250–54. Additionally see the Janata Weekly article cited in ibid.
8. For particular examples of those transfers, see: Neeraj Jain, Union Finances 2014–24: An Evaluation, 2025, ibid., pp. 254–57. Additionally see the Janata Weekly article cited in ibid.
9. For extra particulars, see: Neeraj Jain, ibid., pp. 259–60.
10. Arun Kumar, “The Hollowness of the Modi Authorities’s Tall Claims and Self-Reward on Economic system”, 18 August 2023, https://thewire.in.
11. For an in depth dialogue on all these points, the article: Neeraj Jain, “The Electoral Bond Rip-off: The Largest Rip-off Since Independence”, Janata Weekly, 26 Could 2024, https://janataweekly.org.
12. Methodological and Statistical Appendix. IMF Fiscal Monitor, April 2025, https://www.imf.org. [This document has data compiled on the basis of information available through 14 April 2025.]

[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.]