5. The government can implement a student loan scheme for higher education by the government universities. The loan is to be paid monthly for ten years after completing the degree without interest. This will recover a substantial portion of the government’s costs on universities. Subsequently, the student loan scheme could be extended to includeprivate universities. To estimate the recovery, if one assumes 50,000 students enter state universities a year, and the fee for higher education degree is Rs. 10,000/-a month, then the income for a year will be in the range of Rs. 24 billion. There are several advantages to this method. One is that the students will attempt to complete their degree on time rather than staying in university without completing the degree. This is due to his monthly cost increasing by Rs. 10,000/=.The other is that as the university gets paid Rs. 10,000/= a month for every student, they admit they will try to increase the capacity and the intake to increase their revenue.
6. Even for healthcare, a fee of Rs. 100/= for a consultation and, say, Rs. 500/-a day for hospitalization and Rs. 5,000/= for surgery is not unfair for members of a family that has an income of over Rs. 100,000/= a month or Rs. 25 million in assets.
7. Although not an example of a possible user-pay service, the cost of a poverty alleviation scheme (samurdhi) could also be modified to be less costly to the government and more effective for recipients. The poverty alleviation systems have failed to pull a significant portion of the poor out of their situation. If the government coordinates a scheme in which people and companies volunteer to look after a needy family by providing Rs. 10,000 a month, it will be way better than Rs. 3,000 or so the samurdhi pay. The most significant advantage is that the sponsor could provide children with used or new clothes, books, and education and career guidance. Some would help their recipient families with assistance for home renovations, household goods, and food. While many well-to-do individuals and families will volunteer to sponsor another (poor family, large state-sector and private-sector banks and other organizations will volunteer to support hundreds of families. The most crucial part of such a scheme is the guidance and further help the low-income families would get, so many families would come out of poverty after a few years.
The unfair part of this is that private sector employees are made to subsidize the services the government provides for everyone. The private sector employees not only pay for the salaries of the government sector employees but also have to fund their pensions.
The government should introduce a free services card for families with an income of less than Rs. 100,000 a month or Rs. 25 million in assets so they can be provided with free education and healthcare. This should be done based on an affidavit signed by the head of the household. If an applicant gives a false affidavit on their income and assets, they could be prosecuted, and a fine of several times the cost of free services provided could be recovered. Similar systems are implemented in developed countries with reasonable success.
Include high-salaried state employees for income tax While none of the government sector employees pay any tax on their employment income, private sector employees (who do not qualify for any pension on retirement) have to pay exorbitant taxes on their employment income from October 2022. The unfair part of this is that private sector employees are made to subsidize the services the government provides for everyone. The private sector employees not only pay for the salaries of the government sector employees but also have to fund their pensions.
As the current tax-free threshold is Rs. 100,000/= a month, why cannot the income taxes also apply to government sector employees? A salary of Rs. 100,000/= is way more than an average government sector employee gets. There would not be resistance from anyone as only the people with higher incomes get taxed like their counterparts in the private sector. A private sector employee making over Rs. 100,000/-a month must pay the same prices for goods and services as a government sector employee.
The writer is a Fellow of the Chartered Institute of Management Accountants of the United Kingdom and has been awarded an MBA from the University of Sri Jayewardenepura. He has held the positions of executive director and non-executive director in several companies in manufacturing, banking, insurance, healthcare, telecommunication, and several other industries. He is currently a director of Melstacorp.