When a 300% hike is really about a ₹10 base and rising number of tax payers
Is the fee hike at Jawaharlal Nehru University (JNU) from ₹10 and 20 to ₹300 and 600 a month respectively as rent for a hostel room fair or not? Judging by the way student mobs are rampaging, this is the next thing after the Bengal famine to hit Indian shores. Instead of the ₹10 number, the much larger attention-grabbing heart-breaking 300% hike number is being thrown around rather than the base figure of ₹10 cost — the cost of a South Delhi room in a verdant walled campus on a twin-share basis in India’s capital city. Too busy earning their money, that they pay taxes on, on the other side are those who are asking why their money is being used to deeply subsidise students who may have the capacity to pay but are too entitled to do so.
Let’s step away from the two opposing camps and ask a basic question: is the room rent hike fair? This is a two part answer. The first part looks at a simple inflation indexing of the ₹10 over the years to see what its value would be today. We immediately run into problems of base dates and their change in 2001-02, and finding out when this ₹10 number was fixed. I reached out to professors and those handling the financial department in JNU and the answer, like many things about this issue, is muddled. But it would be safe to say that ₹10 was fixed somewhere in the 1980s. Luckily we have a data series on inflation that is used by the tax department that begins in 1981-82 with a value of 100, but goes only till 2016-17. But we can work with that. ₹10 of 1981-82 would be worth ₹112.5 by 2016-17 and about ₹128 by 2018-19. The ₹300 fee then looks higher than inflation indexing would ask for. But that leads us to the second question – was the ₹10 fee fair in the first place in the 1980s? I remember as a university student in the 1980s in Delhi we would pay ₹12.50 for a monthly bus pass. Most students could afford to pay much more and spent much more ON (in) autos, chola bhaturas and ice cream floats, but the ₹12.50 was an entitlement that the student body was loath to give up. I would say, no, ₹10 in 1980s as room rent for everybody was not fair. It should have been higher.
The issue then is of finding a way to subsidize those who cannot afford to pay but making the well-off pay for education, hostels, food and travel. Or find a way for cheaper loans so that the economically weaker students can pay back the loan once they on-board the job their education leads them to. A mob frenzy against any attempt to bridge the huge gap between income and expenditure of JNU will work against the students. And since we’re looking at data, the latest balance sheet I have of JNU is from 2015-16 and that showed a ₹145 crore shortfall in income over expenditure. But this hides the huge role that grants and subsidides play in the income of the institution – 92% of the income is grants in aid and subsidies, a mere 2% is from ‘academic receipts’.
As the number of income tax payers grows in the country and as the economy gets more formalized, we should expect the space for indulgence for a free pass to those who can afford to pay but are too entitled to do so, reducing.