The Congress President Rahul Gandhi has touched the right cord by announcing at a Party rally in Raipur on Monday that the Congress, if elected to power after the coming Lok Sabha elections, will implement the minimum income programme for the poor.
If the declaration is not taken as a sort of one-upmanship against Prime Minister Narendra Modi who is planning to announce some form of income support to the framers in the next budget on February 1 to influence the mood of the distressed farming community, it has very positive implications for bringing about a significant change in the livelihood of the people below the poverty line.
The proposal has been under discussion for quite some time and the proposal called universal basic income (UBI) has been at the centre of debate among the leading economists in the world, especially in the USA where the issue of inequality has been forcefully brought at the centre stage of politics by the self styled socialist Bernie Sanders.
Both Bernie Sanders in USA and Jeremy Corbyn in Britain have been talking about the economies being run in the interests of one per cent now and promising to change the system in favour of 99 per cent when they come to power.
Even the capitalists of new generation like Mark Zuckerberg and Chris Hughes, co founders of Facebook, have argued for UBI as not necessarily a comprehensive solution but as at least a moderating analgesic for the severity of income inequality and poverty in countries including America.
For India, the implementation of the UBI to the people below the poverty line including the urban poor, has a great potential in giving a boost to the rural economy through the flow of cash to every BPL family and this will automatically lead to pick up in demand of consumer goods.
The rural market will expand substantially leading to the growth of domestic industry. This will contribute to the GDP growth. As Dr Maitreesh Ghatak of London School of Economics explains a UBI programme cuts administrative costs and empowers citizens by giving them choice and control over how to spend the money received as assistance. Standard economic inefficiencies associated with in kind or conditional transfers, such as distorted resource allocation, direct bureaucratic costs and corruption, limit considerably the social returns of public funds.
Dr Ghatak, who is one of the proponents of the UBI programme on the lines of Rahul Gandhi’s announcement, does not agree with those who argue that this unconditional money transfers will make the people below the poverty line lazy and they will squander funds. He says that there is no such evidence that the money is squandered and there is no evidence also that this has led to rise in the consumption of non essential goods like alcohol and tobacco, though the studies have been done of limited areas.
In developed countries, the programme is meant to be universal but in India, the Congress along with the other opposition parties, can work out an India specific programme where the net transfer will take place in respect of the people below a certain income level.
Presently, the BPL level can be the basis but there is scope for revising it. Those who oppose the introduction of minimum income guarantee scheme for the poor mention of the huge costs of the scheme and whether the Indian government’s present financial position can ensure that. To this, another proponent of the UBI Dr Pranab Bardhan of the University of California, Berkeley argues that the fiscal cost of the scheme can be managed provided there is political will on the part of the ruling party. According to him, the highly defective loan waiver programme, if applied to all states in India, will easily cost Rs 4 trillion.
The farm income support plan for the country as a whole, which the Modi government is now considering as a part of the interim budget announcement, will come to no less than Rs 2 trillion. As Dr Bardhan sees it, there is enough scope for the India government to organize resources for the UBI programme by doing away with the subsidies enjoyed by the better off sections of the population and mobilising resources from the under taxed sections. If there is requisite will, the Government can take the plunge and this will transform the economy along with the improvement of the living standards of the poor.
The Congress has to take the major role in framing the common minimum programme of the anti-BJP Opposition for the 2019 Lok Sabha election putting this basic minimum programme as the prime agenda. The other should be the free medicare for the poor and the senior citizens. The Ayushman Bharat programme has to be tweaked to suit the needs of the poor so that nobody has to pay anything. These are the two vital areas which the anti-BJP coalition has to take into account. The CMP has to act as a game changer in the interests of the distressed farmers, unemployed youth and the economic insecurity of the working people.
The global economy is under turmoil as the neo liberal agenda being pursued in different countries, has failed to deal with the pressing problems of the people. Even in the developed west, the struggle for removing inequality has become the core issue of the movement against the ruling governments. Socialism is back on the agenda of the new century. Both Sanders in USA and Corbyn in Britain are leading the young brigade giving the hope of a new society based on socialist ideals.
In India, the time has come for Rahul Gandhi to declare that he believes in socialist ideals which will be updated to suit the needs of India in the 21st century. He has to unite the forces which believe in a secular inclusive resurgent India. For Rahul, this is the right time to seize the opportunity and strike hot.
Nitya Chakraborty is a freelance journalist. Views are personal.