BS Number Wise: Education and the ability-to-pay principle in India

The fees Jawaharlal Nehru University (JNU) earned per student per annum, at Rs 7,375, was 99 times lower than the spending on academic, administrative, and other costs per student per annum in 2019-20

In 1776, while laying down the Canons of Taxation, Adam Smith espoused the “ability to pay” principle: those who could afford it should contribute more to government coffers. This principle now shapes taxation and welfare programmes worldwide.

India’s “Give it Up” programme in 2015 urged wealthier households to surrender their LPG subsidy and pay market rates. The country’s Goods and Service Tax (GST) rates, too, follow the ability-to-pay principle: necessities are taxed lower than luxuries.

Higher education in state-funded institutes is one field where this principle isn’t applied. Business Standard found that the gap between expenditures incurred by educational institutions