IISPPR

Category: Public Policies

Public Policies
Farjana Akhter

The True Cost of Poverty and Corruption on Education System in Developing Nations

The True Cost of Poverty and Corruption on Education System in Developing Nations                      Authors-Srishti Prasad, Farjana Akhter, Tarunika B, Christopher.S.Rekwot , ⁠P. Harshitha                                                                                                              Abstract The paper looks into the intricate relationship between poverty and corruption in the education system, showing how corrupt practices in the sector deter access to quality education and sustain unequal opportunities. Reaching comfortably beyond academia, the book examines, with the help of the most insightful scholarship, as well as case studies, how corruption most negatively impacts vulnerable communities; it is a root cause of inequality that restricts social mobility and economic empowerment. Discussion The discussion highlights the need for transparency, accountability, and strategic investments in education to disrupt this cycle. Societies must take action to empower stakeholders and promote meaningful reform, to restore the promise of education as a path out of poverty and to promote more equitable and sustainable development.  1. Introduction What happens to a nation’s future when its children are denied the basic right to quality education? According to Senator Bernie Sanders, “Education should be a right not a privilege”. Education is considered to be one among the fundamental aspects of human development. It can make a better human being by improving one’s abilities, skills, knowledge, choices and decisions. It can also help one to live a healthy life, to have access to resources needed to maintain a decent standard of living, and to participate in the society. Education can also contribute to other aspects of human development, such as environmental sustainability, gender equality, human rights, and peace. Therefore, education is not only a human right, but also a human development. The Sustainable Development Goal 4 aims to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.” Are all children across the globe able to access quality education today? The promise of better-quality education for all remains unfulfilled due to the twin evils namely Poverty and Corruption. According to UNESCO’s Global Education Monitoring Report 2024, approximately 251 million children and youth aged 6 to 18 are still out of school globally with only 1% decrease in nearly a decade. The report highlights chronic under-investment especially in low-income countries and also emphasised that education should be a global priority. (Azoulay, 2024) In various developing countries, only a small percentage of children complete their primary school and even fewer children complete secondary school. The reasons behind it include difficulty to reach schools as well as the cost of schooling. This is seen as a crisis in many developing countries. Children being denied the right to education due to poverty are also being denied various opportunities, such as being employed, supporting their families and contributing to the development of their communities. (Nortje, 2017) It had been well said by Peter Eigen that Corruption is a major cause of poverty as well as a barrier to overcoming it. The two scourges feed off each other, locking their populations in a cycle of misery. Corruption must be vigorously addressed if aid is to make a real difference in freeing people from poverty. Nicole Duerrenberger confirmed that Corruption negatively correlates with the expected years of schooling using data from 88 developing countries. (Duerrenberger & Sussanne Warning, 2018) 2. Understanding Poverty and Corruption in Context of Education  Comprehending the rich nexus between Poverty & Corruption with respect of education and without knowledge is vicious circle which reinforces inequality and impede development. When corruption infiltrates education—whether through money paid for admissions or stolen school funds—it weakens the very quality and access of education, particularly for the poor. Transparency International reveals how corruption negates the quality of education with effects that include larger class sizes, teachers not being paid properly, lack of learning materials that hurts the less advantaged child12. And when educational resources are siphoned away, or access sold to the highest bidder, the promise of education as an escape from poverty is broken. Academic work tends to suggest that it is not just the case that corruption exacerbates poverty, but that it is driven by poverty. Publications like those of Gupta et al. (2002) and Tebaldi and Mohan (2010) show that higher levels of corruption accentuate income inequalities and reduce the opportunity of the poor to invest in education3. Poor families, from countries with high rates of poverty, may also be compelled to make “under-the-counter” payments for schooling “free” at the point of entry (as in Bangladesh, where more than a third of all students paid unofficial fees to gain access to schooling2). This is a particular feedback loop: poverty leads to susceptibility to corruption which leads to (made worse by) poverty which leads to vulnerability to corruption, and so on. Such a vicious circle cannot be reversed by policy changes alone but by a society-wide orientation towards transparency, accountability, and investment in education. Supporting evidence of this finding is evident from that Fomicová and Ortega (2017) found poverty and reduction in education and corruption to be negatively related.4 In comparison with countries that have lower education investment and less control over corruption, Castro (2019) argued that there is greater reduction in poverty in countries that have educational investment and active control over corruption. When we empower communities to demand better governance and ensure children receive the learning and health resources that those with more advantages already enjoy, we foster a fairer and more prosperous society 3. Poverty as a Barrier to Educational Access At present, there are lots of developing countries where poverty stands as one of the most significant barriers to quality education. The consciousness is profound, reinforcing a cycle of inequality and hindering economic development. 3.1 Financial Barriers:

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Public Policies
Ashwini Wagh, Niharika Bajpai, Sanya, Sowmya Radhakrishnan, Afreen Manzoor

Rohingya Crises – The Absence of National Asylum Law in India

Abstract Refugee policy in India exists in a legal and moral paradox. Despite hosting thousands of displaced individuals, including the persecuted Rohingya from Myanmar, the country has no dedicated national asylum law is not a party to the 1951 Refugee Convention. The Rohingya crisis brings to light the consequences of this legal vacuum, i.e., statelessness, insecurity and inconsistent treatment under laws that fail to differentiate refugees from illegal migrants. India’s reliance on the Foreigners Act and Citizenship Act results in arbitrary detention, limited access to rights and deportation threats, even for UNHCR (United Nations High Commissioner for Refugees) registered individuals. Judicial responses remain unpredictable, reflecting a broader policy shaped more by national interest than humanitarian need. This paper explores the intersection of statelessness, international obligations and domestic law, arguing for a structured legal framework that guarantees refugee protection while addressing genuine security concerns. A codified national asylum policy is not only a legal necessity but a test of India’s constitutional values and global leadership ambitions. Keywords: Refugee, Rohingya, Statelessness, Non-refoulement, Asylum Law, Human Rights, National Security, Displacement Introduction Refugees are those forced to leave their home country owing to persecution based on their race, religion, nationality, political beliefs, or social group participation (UNHCR, 1951). The Rohingya are predominantly Muslim and have resided in Buddhist Myanmar for decades. There are around 1.1 million Rohingya in Southeast Asian countries. They are not one of Myanmar’s 135 listed ethnic groups and have been denied citizenship rights since 1982, forcing them to depart their home country. (Al-Jazeera, 2018) India’s position on the Rohingya crisis has always been varied and multifaceted. The country has neither signed any international refugee conventions nor enacted a national asylum law (Yhome, 2016). Consequently, Rohingya refugees are treated as foreigners under domestic legislation, For instance, the Citizenship Act of 1955 and the Foreigners Act of 1946, recently amended in 2019, which apply directly to them (Nair, 2021). While India acknowledges the humanitarian dimension of the crisis, it has prioritized national security. As a result, the Rohingya remain caught in a web of borders, bureaucracy and brutality. In a nation that upholds the civilizational, Vasudhaiva Kutumbakam a ideal of “the world is one family”, the absence of a national refugee law speaks more profoundly than any proclaimed tradition of hospitality. To address the refugee issue effectively, a holistic strategy is essential, as refugees continue to face suspicion, surveillance and slow erasure. The paper examines the intersection between statelessness, human rights, and the legal gap in India’s refugee policy. Its objective is to advocate for the development of a robust and inclusive legal framework, incorporating measures such as resettling vulnerable refugees, providing safe spaces for asylum and supporting their integration through various initiatives in host countries (Lloyd College, Blog). The Legal Void India now has a greater need for comprehensive refugee laws because of the influx of displaced persons fleeing neighbouring countries including Afghanistan, Bangladesh, Tibet, Sri Lanka, and Myanmar. The absence of specific legal frameworks to address the difficulties faced by refugees creates a legal void that exposes them to a number of risks, including arbitrary detention, discrimination, prosecution, and obstacles to accessing essential services, even though India has a long history of welcoming migrants. Essential rights for refugees are guaranteed by the 1951 United Nations Refugee Convention.  India has a considerable Rohingya population, more than 46,000 have been officially recorded by the UNHCR but neither the 1951 Convention nor its 1967 Protocol has been signed.  This situation culminated in a significant event involving the deportation of unauthorized foreign nationals, including Rohingya, in 2017. In the Indian context, refugee governance falls under two legislative frameworks. The Foreigners Act 1946, with its most recent amendment in December 2018, confers considerable authority to the Government regarding the regulation of foreigners’ entry and stay. Additionally, the Citizenship Act of 1955, modified in 2019, establishes religious affiliation as a criterion for Indian citizenship for refugees present in the nation. (Shreya Mishra, 2024) Despite numerous Rohingya possessing refugee documentation and UNHCR registration, the Indian authorities do not officially acknowledge their refugee status or provide protection. Consequently, these individuals face perpetual vulnerability to detention or deportation and are denied access to fundamental rights. The manifestations of discriminatory practices against refugees and preferential aid have revealed an arbitrary interpretation of the non-refoulement principle. Since determinations made outside a structured legal framework tend to be arbitrary, unclear, and predominantly shaped by strategic and geopolitical considerations rather than humanitarian imperatives. This unsystematic methodology has resulted in inequitable, erratic and inconsistent handling of Rohingya. (Rajan, 2022) Without a thorough framework for determining refugee status, authorities struggle to distinguish between people trying to enter the country illegally and genuine refugees in need of protection. Inadequate vetting procedures place India at considerable risk of infiltration by persons with harmful intentions, creating serious national security vulnerabilities. Consequently, the lack of a thorough legislative structure governing refugee movements raises the critical issue of how the nation can appropriately balance protecting its national security interests while fulfilling its humanitarian obligations toward refugees. The implications of an absence of thorough refugee legislation are substantial. Undocumented refugees experience heightened susceptibility to human rights infringements, while judicial bodies issue inconsistent decisions owing to legislative ambiguity. Concurrently, the state confronts challenges about security, population disparities, and resource depletion in receiving communities. Additionally, refugees become susceptible to mistreatment, exploitation, and illicit trafficking. The deficiency in refugee statutes also generates national security apprehensions. Furthermore, India’s international standing suffers due to the lack of comprehensive refugee regulations. The nation’s non-adherence to global refugee conventions remains a source of concern within the international sphere.  (Debbarma, 2024) Statelessness and Security Concerns The Rohingya problem is a result of decades of statelessness and persecution in Myanmar, which are rooted in the 1982 Citizenship Law that denies the rohingya their legal identity and rights by excluding them from recognized ethnic groups. Large numbers of people were displaced as a result of military operations, crackdowns, and systematic discrimination. Their movement has been used as an excuse for

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Public Policies
Gannavarpu Rajlakshmi

The Impact of Inflation on Access to Basic Amenities in Rural Communities: A Comparative Study of Nigeria and India

Keywords: Rural Inflation, Poverty, Cost of living, Basic amenities, Healthcare access, Food Insecurity, Education affordability, Housing crises, India and Nigeria, Low-income households The Impact of Inflation on Access to Basic Amenities in Rural Communities: A Comparative Study of Nigeria and India Introduction Inflation in rural areas has emerged as a critical global concern in contemporary times, significantly affecting the well-being and resilience of rural households. As the prices of basic necessities continue to surge, rural families are finding it increasingly difficult to meet their daily needs, especially in the essential areas of food, housing, education, and healthcare. These four pillars, which form the backbone of human development, are being eroded by persistent inflation, threatening the very fabric of rural life. One of the most pressing issues is the intersection of food basket inflation and limited employment opportunities. The rising cost of staple foods, coupled with stagnating or informal income sources, has created a severe resource deficit in rural households. This financial strain forces families to make harsh trade-offs, such as choosing between nutritious meals and medical care, or between school fees and house repairs, thereby compounding their vulnerability. Compared to their urban counterparts, rural households are disproportionately affected. Factors such as lower per capita income, limited access to technology, poor infrastructure, and fewer formal employment opportunities widen the rural-urban divide. While urban residents may have relatively better access to social safety nets or diversified income streams, rural populations often lack the institutional and economic buffers needed to withstand prolonged inflationary shocks. Literature Review Food inflation poses a critical challenge to rural households’ food security in both Nigeria and India. In Nigeria, rising food prices severely impact household access to sufficient, nutritious food, leading to decreased dietary diversity and increased vulnerability to economic shocks, especially among rural communities that rely heavily on agriculture and limited market access (Anugwa & Ugwu, 2022). Similarly, in India, food inflation reaching 10.9% in 2024 has intensified the financial burden on rural families, where over half of income is spent on food, resulting in limited accessibility and negative health outcomes like malnutrition and anemia. Factors such as global commodity prices, crop focus on staples, and supply chain inefficiencies aggravate the situation (Fathima, 2024). Both contexts underline the urgent need for long-term interventions, including improving agricultural productivity, crop diversification, strengthened supply chains, and effective social support systems like cash transfers and efficient Public Distribution Systems, to enhance food security and rural resilience to inflationary pressures. Food basket inflation leads the people in African households to cope with scarcity of food with educational investment of their children (Obibuba,2024) . These not only have physical and medical implications but the psychological implications as well. The similar cases have been observed in the Indian subcontinent region as well where the scenario has worsened with a disproportionate rise of income and educational expenses (Bhattacharjee, 2016). Food basket inflation impacts the foundational block of the society, i.e., the educational sector of the society. Inflation also significantly affects healthcare in low and middle income countries by driving up costs and reducing access. According to Uzor et al. (2024), inflation in Nigeria has driven significant increases in medicine prices, particularly in private pharmacies, due to currency devaluation and import dependence. This has led to reduced access and frequent stock-outs in public health facilities. Similar to this, Poongavanam et al. (2023) note that India’s healthcare system faces rising costs fueled by technology use and a growing chronic disease burden. To mitigate these effects, Uzor et al. (2024) recommend strengthening local drug production and expanding insurance in Nigeria, which also aligns with Poongavanam et al. (2023) call for cost control policies and investment in India’s primary healthcare infrastructure. Inflation also severely affects fundamental sectors such as education, housing, and healthcare in low- and middle-income countries. Food basket inflation drives African households to divert resources from children’s education to survival needs, leading to long-term psychological and developmental setbacks (Obibuba, 2024). Similar patterns emerge in the Indian subcontinent, where income stagnation and rising educational expenses deepen inequalities (Bhattacharjee, 2016). Inflation also strains healthcare systems. In Nigeria, it raises medicine prices due to currency devaluation and import dependency, leading to frequent public sector stock-outs (Uzor et al., 2024). India faces parallel challenges from technology-driven costs and chronic disease burdens (Poongavanam et al., 2023). Mitigation strategies include boosting local drug production and expanding insurance (Nigeria) and investing in primary healthcare (India). Additionally, in rural India and Nigeria, inflation in construction materials has made housing unaffordable for the poor, undermining dignity and health security (Chattopadhyay et al., 2022; Adebayo & Iweka, 2020). Impact of Inflation On Accessibility To Food Food is one of the basic necessities of life. The Constitution of India also includes the right to food in Article 21 i.e. right to life. But due to rising inflation in recent years, has resulted in soaring prices of food communities and this has impacted the accessibility of food mainly to the rural population. The data of the Ministry of Statistics and Implementation states that there has been an inflation of around 9.03% in December 2023, 9.10% in November 2024 and 8.56% in December 2024 (MoSPI 2024, CPI). This rise in inflation has led to a rise in the prices of food which has fueled the already dreaded issues like malnutrition, undernourishment and consistent health problems. India’s Global Hunger Index in 2024 stood at 27.3(Welt Hunger Hilfe, GHI 2024) which was classified as ‘serious’. Another reason for such inflation is rise in the crude oil prices, which shot up in 2021, after COVID-19. The main cause behind this was the recent rise of the market after a year of sluggishness during 2020. People have cut on their food intake to combat the effect of inflation. This has led to consumption of seriously nutrition-less foods. This has resulted in high levels of anemia in women and children at 57% and 63% respectively (MoHEW, NHFS-5 2019-21). A similar situation could be witnessed in Nigeria but the condition is far worse. With inflation

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Public Policies
Aryaman Sandwar

Rising prices, Deepening poverty: Understanding the impacts of inflation in the Indian countryside

This study delves into the intricate dynamics of rural inflation in Indian context, emphasizing the influence of food price inflation, climatic variability, structural transformations, and fluctuations in wages on the living expenses faced by rural populations. The paper calls for a hybrid policy approach combining monetary tools with robust rural infrastructure, agricultural reforms, and inclusive growth strategies to effectively mitigate rural inflation and enhance the socio-economic conditions of marginalized communities.

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Public Policies
Azra T, Ritika, Anushka Verma, Prisca Ndoda, Surya Narayan, Vishakha and Modou Lamin Cham.

Cybersecurity Policies and Challenges in Public Sector Governance

INTRODUCTION In today’s hyper-connected world, digital technologies shape every aspect of our personal, economic, and political lives. From communication and banking to healthcare and critical infrastructure, nearly every sector relies on secure and stable digital systems. Yet, with these advancements come growing threats of cyberattacks, data breaches, misinformation, surveillance, and digital warfare. These threats do not respect national borders, and their impact can be devastating and far-reaching. As a result, cybersecurity has emerged as a top global priority, demanding robust and effective legal responses. It has become one of the most critical areas of concern for governments, businesses, and individuals across the world. As technology advances, so do the risks and threats to digital systems. Cyberattacks can target governments, critical infrastructure, hospitals, banks, and even personal devices.  GLOBAL APPROACHES TO POLICY REGULATION  Global legislative measures and compliance requirements in cybersecurity differ significantly across regions, reflecting varying regulatory philosophies, enforcement mechanisms, and national priorities. In the United States, cybersecurity regulation adopts a decentralised, sector-specific approach. This model provides flexibility for industries but also results in regulatory fragmentation. The Computer Fraud and Abuse Act (CFAA, 1986) is a foundational law addressing unauthorised access to computer systems. While pivotal, it has drawn criticism for being overly broad and outdated in an era of evolving cyber threats. Additionally, enforcement often falls under agencies like the Federal Trade Commission (FTC), which has played a central role in regulating cybersecurity through case law, as seen in FTC v. Wyndham Worldwide Corp. (2015), where the court held companies accountable for failing to implement reasonable cybersecurity practices. In contrast, the European Union has developed a more centralised and uniform regulatory framework. The General Data Protection Regulation (GDPR, 2018) is one of the world’s most comprehensive data protection laws, setting strict standards for data processing, consent, and breach notification, along with significant penalties for non-compliance. Complementing GDPR, the Network and Information Systems Directive (NISD, 2018) establishes security and incident reporting requirements for operators of essential services and digital service providers. Key rulings like Schrems II (2020), which invalidated the EU-U.S. Privacy Shield over surveillance concerns, have further complicated transatlantic data transfers and highlighted the global impact of EU regulations. The Asia-Pacific region exhibits a diverse regulatory landscape shaped by differing national priorities. China’s Cybersecurity Law (2017) is marked by its emphasis on data localisation, governmental oversight, and control over cross-border data flows, reinforcing state cybersecurity sovereignty. In Japan, the Basic Act on Cybersecurity (2014, updated 2021) empowers the National Centre of Incident Readiness and Strategy for Cybersecurity (NISC) to lead national cybersecurity policy, fostering public-private cooperation. India follows a hybrid model: the Information Technology Act (2000) addresses cyber crimes like hacking and identity theft, while the newer Digital Personal Data Protection Act (2023) strengthens privacy rights but allows exceptions for state interests. India also prioritises critical digital infrastructure, such as Aadhaar and UPI. Australia’s Security of Critical Infrastructure Act (SOCI, 2018; amended 2021) mandates incident reporting and imposes obligations on operators of essential infrastructure to maintain cyber resilience. In South Africa, a blend of criminal and data privacy laws has emerged through the Cybercrimes Act (2020) and the Protection of Personal Information Act (POPIA, 2013), aiming to combat digital offences while safeguarding personal data. Judicial decisions continue to shape global cybersecurity norms. India’s Shreya Singhal v. Union of India (2015) invalidated Section 66A of the IT Act, reinforcing free speech protections online. In the UK, R v. Andrew Skelton (2018) clarified corporate liability for internal data breaches. In China, Qihoo 360 v. Tencent (2013) exposed tensions between cybersecurity regulation and market competition. International Legal Instruments The Budapest Convention (2001) is the leading international treaty on cybercrime, promoting the criminalisation of offences like hacking and fostering cross-border cooperation (Council of Europe, 2001). However, key countries like India, China, and Russia have not signed it. India cites sovereignty concerns but supports many of its principles. The UN promotes responsible state behaviour through forums like the GGE and OEWG, though these often lack binding outcomes. Regional efforts such as the African Union’s Malabo Convention and frameworks from the Arab League and SCO remain limited by weak enforcement. Legal Challenges in Cyber Governance and the Way Forward One of the biggest legal challenges in cybersecurity is the lack of a global, binding treaty. This leads to conflicting national laws and confusion over jurisdiction when cybercrimes cross borders. Traditional mechanisms like Mutual Legal Assistance Treaties (MLATs) are often too slow for fast-moving digital threats. Another issue is that laws struggle to keep pace with rapidly evolving technologies. Areas like AI, cyber warfare, blockchain, and cloud regulation present new risks that most legal systems are not yet prepared for  To move forward, countries must harmonise key laws, improve cross-border cooperation, and build capacity through training and financial support. Public-private partnerships and awareness campaigns are also vital. Educational institutions should help train future legal and technical experts to ensure effective cybersecurity governance. ECONOMICS AND RESOURCES OF CYBERSECURITY In today’s digital world, cybersecurity is no longer just a technical issue. It has become an economic, political, and social challenge. As data, infrastructure, and services go online, protecting them involves not just money but also smart policy, strong partnerships, and proper regulations. Three main issues define the economics of cybersecurity: limited resources and outdated technology, the growing role of public-private partnerships, and different regulations across countries. Many organisations, especially small businesses and government departments, cannot afford the latest security tools. They often rely on old systems that cannot defend against modern cyber threats. For example, the 2017 WannaCry ransomware attack hit outdated Microsoft systems and caused damage in over 150 countries, affecting hospitals, businesses, and governments. There’s also a shortage of skilled cybersecurity professionals. As threats become more advanced, the number of trained experts is not enough. This creates a gap between the threats we face and our ability to deal with them. Wealthy companies can afford better security, while smaller ones remain vulnerable, increasing the overall risk. To handle these challenges, governments and private companies are

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Public Policies
Poorti

Health Insurance Penetration and Its Impact on Access to Healthcare in Developing Countries

1.Introduction 1.1 Understanding Relative Income in Economic Decision Making Relative income, as opposed to absolute income, refers to an individual or household’s economic position in comparison to others within their society or social reference group. James Duesenberry formulated the Relative Income Hypothesis (1949), which emphasized that individuals derive utility not only from their income but also from how that income compares to the income of others. In the school- and education-related context, this means that the decision regarding school type (public vs. private), tutoring, and other learning resources is dependent not only on the economic circumstances of the household but also on social norms and competitive pressures. Relative income shapes educational expenditures in both up and downward directions. Frank (2007) argues that families are often pushed to spend on visible status goods by perceived social comparisons, with education being one of the most important ones.  In a study by the Pew Research Center (2020), 62% of parents from urban areas in India reported “keeping up with peers” as a major consideration while spending on private tuitions and elite educational systems.This shows the non-linearity of educational investments: families will make a priority not due to their expectations of educational attainment, but because their sense of relative deprivation.   1.2 Link between Income and Educational Choices Statistical evidence from across the world and from Indian studies points toward strong concurrence between the income level of the household and the access to education. A significant proportion of high-income families can afford private schooling, extra tutoring, digital resources, and extracurriculars, all of which combine to enhance educational attainment. According to the National Family Health Survey (NFHS-5, 2019-21), the net attendance ratio for secondary education in India in the richest quintile is 71 percent, while in the poorest quintile, it is only 41 percent. According to UNESCO (2022), drop-out rates before completion of primary education are four times higher for children from bottom 20% income households than for those from the top 20%. Moreover, the Annual Status of Education Report (ASER) 2023 further indicates that the higher-income households consistently perform better than their peers in foundational numeracy and literacy, suggesting that income determines not only access but quality and outcomes too.   1.3 Income Tax Policies as a Determinant of Educational Investment Income tax policy is one of the most important tools through which wealth can be redistributed in an economy. The way such tax policies are structured at a given time can either alleviate or exacerbate economic inequality. For instance, progressive taxation whereby wealthier earners pay higher taxes in proportion to their income is almost invariably associated with greater redistribution and greater public services, education among them. Regressive taxation, or systems with very few tax brackets and fewer redistributive mechanisms, on the contrary, tend to increase inequality and limit the potential for public investment. Countries with more progressive taxes and more public education expenditure, such as Finland, Sweden, and Norway, are also among the best-performing and highly unequal societies in the world, according to the OECD (2023). The tax-to-GDP ratio of India, which hovers around 11.4% (2022-23), is far below that of the OECD average of 34%. Public expenditure on education is still much lower than the world average at 2.9%, notwithstanding the Kothari recommendation of at least 3% of GDP. Such low fiscal space means relatively poorer access to investment in quality schooling particularly in resource-poor rural and peri-urban areas. Further, amendments in income tax laws, such as increased deductions for education loans under Section 80E or the introduction of the new tax regime in 2020, have introduced differential effects on households and have sometimes acted as incentives while at other times tended to act as deterrence on private educational investment. 2.Objectives The link between tax policies and education has increasingly gained currency among economists, policy-makers, and social scientists. This study seeks to assess how changes in the system of taxation, especially income taxation, affect household decisions about children’s education. The objectives are designed to look into direct economic effects and indirect socio-psychological effects concerning income inequality triggered by taxation. To analyze the impact of income tax reforms on household income and child education outcomes. Income tax legislation directly affects households’ disposable income. Governments utilize progressive tax structures, tax rebates, deductions for education, and conditional cash transfers to increase or decrease private investment in education. Regressive tax structures, on the other hand, put a heavier burden on poorer households, making them less able to invest in education. The focus of the goal is to look into how historical changes in income taxation policies have resulted in measurable differences in educational enrollment ratios, quality of education, and dropout rates across different segments of income.    To analyze the role of income disparity in shaping aspiration for and access to quality schooling beyond absolute income, relative income- how well off a household is vis-a-vis all others within its reference group- can also influence attitudes regarding education. Children from poorer families might have lowered expectation and low motivation or feel stressed by trenchant socio-economic contrasts within school settings. Conversely, families feeling such pressure to “keep up” might invest heavily into education at the expense of basic necessities. This goal examines how such disparities, often exacerbated by uneven tax burdens and limited redistribution, shape aspirations and ultimately cascade down into education pathways.   Theoretical Framework 2.1 Human Capital Theory First conceived by Theodore Schultz in the year 1961 and later amplified by Gary Becker in the year 1964, the Human Capital Theory describes education as a form of investment, just like physical capital, which gives back dividends in the form of increased productivity, better employment alternatives, and much more enhanced overall economic growth; according to the theory, households and individuals behave rationally in cozying up or letting go from investing their resources into education according to analysis of costs (tuition materials, opportunity cost of time) vis—vis expected returns-future income, job security, among others. According to this framework, household income becomes a significant determinant of the ability

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Public Policies
Poorti

Relative Income and it’s effects on Child Education

In a country as socioeconomically diverse as India, the decision to invest in a child’s education is rarely dictated by income alone. Instead, it is shaped by a complex interplay of household earnings, perceived social standing, and the broader fiscal policies that govern disposable income. As income tax reforms continue to redefine the contours of economic opportunity, their ripple effects on educational choices—whether to pursue private schooling, supplemental tutoring, or higher education—become increasingly significant. This paper explores how relative income and income tax structures together influence household education decisions, not just through the lens of affordability, but also through social pressures, aspirations, and perceived deprivation. Drawing on Human Capital and Relative Deprivation theories, the study interrogates how inequality—both economic and psychological—translates into educational access and outcomes in contemporary India.

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