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The Economic Times

Why high income tax rates are so unjust in India

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Govt's justification
1/8

Govt's justification

It’s true, there are countries where the super rich pay even higher taxes than they do in India.

The government used this to justify the higher taxes that those earning above Rs 2 crore will now have to pay.

Agencies
Missing link
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Missing link

But there was something it did not mention: most high-tax countries invest heavily to finance free education and healthcare along with various social security schemes. That doesn’t quite hold true for India.

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The failure
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The failure

Global experience suggests that among the most effective affirmative actions that alleviate poverty and bring equality are universal access to affordable health and education.

India fails miserably on both counts.

AFP
On education front
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On education front

According to a 2018 UK government report, of the total 87.4 lakh primary and secondary students enrolled in the country, 91.3% were studying in government schools.

World Bank data shows that in 2016, enrolment in private schools at the primary level was 15% in France and 9% in Canada. This was 33% in India.

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On healthcare
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On healthcare

Now consider health.

In 2016, 64.6% of all our health expenditure was borne by Indian citizens — in other words, this was an out-ofpocket expenditure.

This was less than 15% for Canada, US and France.

AFP
At secondary level
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At secondary level

At the secondary level, 25% of French students were enrolled in private schools while this was 8% in Canada.

In India, this was 51%. And the only reason this is so is because there aren’t enough good government schools in India. As a result, the taxpayer is not only paying taxes, but also paying large sums for her child’s education.

BCCL
Expensive health
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Expensive health

A 2011 WHO estimate shows that more than 5 crore Indians were pushed below the $1.90-PPP a day (international poverty line) because of health expenditure.

AFP
Some comparison
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Some comparison

World Bank data shows that the Indian government’s spend on education as a proportion of GDP is much lower than many high-tax countries.

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