The Parliamentary Elections 2019: Basic Income Proposal of Rahul Gandhi
By Amar Yumnam
The campaigning for the 2019 Lok Sabha Elections are now in full swing and the actual elections are going to happen in less than two weeks. General Elections for the parliament are the occasions when the political parties should generate agenda and articulate their respective policy responses to the core issues they perceive to be plaguing the nation. While the regional political parties are a significant component of the Indian political scenario today, the two parties people look forward to on a wider frame for articulation on national issues and their policy responses are the BJP and the Congress. Quite surprisingly, the BJP has utterly failed to articulate any agendum and any potential response from their end that can have nation-wide relevance and thus nation-wide appeal; the party has locked itself with the Phulwama and related Pakistan statements. The people definitely expected that the party would come forth with responses on the charges against both the party and their government on certain critical issues: (i) the destruction of institutions of governance; (ii) the demolition of autonomy and innovation strengths of higher educational institutions; (iii) compromising the Indian strength on data reliability built with difficulty over the years; and (iv) stand on secularism.
A pleasantly refreshing articulation for a policy intervention, and the only one in the present electioneering process so far, has come from the Congress Party’s promise for a basic income for the poor. This is characteristically very different from all the earlier schemes for addressing the pains of poverty. For instance, unlike the Mahatma Gandhi National Rural Employment Scheme, it is not asking for any work requirement for enjoying the benefits of this direct cash transfer; the transfer is absolutely unconditional. Further, it is not going to be a once in a while lump-sum grant but a regular stream of cash transfers. Still further, unlike the insurance schemes, it does not depend on the occurrence of a negative phenomenon and the needs arising thereof.
The response to and examination of this announced proposal of the Congress Party must go beyond the plain political labelling of it by the ruling party as just bluff, because there is definitely more to it. While there could be multiples of dimensions for examining the pros and cons, I would take up only certain aspects as I think of as immediately significant to be clear about.
First, the beauty of the Congress’s Minimum Income for the poor lies in the modification it makes to the Universal Basic Income (UBI) idea, which has been making rounds and implementation in Europe, Latin America and Africa. The UBI has been an idea which can be traced back to the Negative Income Tax proposal put forth by the inimitable Economics Nobel Laureate Milton Friedman. This idea has become much more popular and acceptable even to the Libertarian protagonists. One of most prominent protagonists today of this idea is the Belgian Political Economist-cum-Political Philosopher Philippe Van Parijs. He writes (2005): “Give all citizens a modest, yet unconditional income, and let them top it up at will with income from other sources. …Basic income is one of those simple ideas that must and will powerfully shape, first the debate, and next the reality, of the new century.” He defines “basic income as an income paid by a political community to all its members on an individual basis, without means test or work requirements.” Thus the usual Basic Income concept covers all the citizens within the territorial limits of a polity with a government of its own. The announcement made by Rahul Gandhi, President of the Congress Party, makes certain modifications to this. To begin with, he is talking of only the poor but not of all the citizens. Further, he is not talking of cash transfers of Rs. 15 lakhs at one go, but of a reasonable amount on a periodically regular basis. This modification of the UBI idea to suit the Indian reality is a master stroke. It reflects application of mind to the capability of the Indian state to finance such cash-transfer redistribution schemes. In other words, it immediately establishes the doability of the scheme.
Second, I love the democratic principle involved in the scheme. A poor knows her own needs much more than the state; in fact, no state should presume to have any better idea on how to address the needs of poverty than the poor themselves. The cash-transfer immediately restores the personal freedom to the poor to prioritise her needs; core unfreedoms are converted into freedoms.
Third, another brilliant feature of the scheme is the periodic regularity inherent in the transfer. This immediately enhances the capability of the poor to have a longer-term perspective for the household to escape from poverty. This as well immediately links the poor with the financial system and market of the country. What more can be better than this as a strategy for financial inclusion!
Fourth, the poverty removal schemes of India, including the Public Distribution System, have become too many and too complex with the transaction costs of governance rising over the years. The new proposal has an element of straightforwardness and simplicity while at the same time with easier potential for delivery. This would necessarily lead to score higher on reducing poverty.
Fifth, it is the poor who are made to increasingly become even farther from the digital-based technological advancements and thus shield their fate off the employment market. Thus this scheme has a wonderful hidden characteristic of equalising the opportunities across the population, which could have secondary round positive effects on production and productivity.
Above all, what I feel most happy about relates to the implications for the future of children if this Minimum Income Guarantee scheme comes about. The most painful thing is the children either not attending or dropping out of the schools without the children unrealising their own future implications; the signs of this are visible everywhere in the country. This is bad for the nation as well. For the poor families the present benefits of child labour are much higher than any potential future benefit of education. This being so they would rather sacrifice education for immediate needs. If the new scheme comes about, the country is going to witness a rise in school attendance and a fall in school drop-out rates. I love it.
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