Editorial Simplified: Ensure A Minimum Income For All| GS – II

Relevance :  GS Paper II (Welfare)


Why has this issue cropped up?

The idea of a universal basic income (UBI) is gaining ground globally. It has supporters among proponents as well as opponents of the free-market economy.


What is UBI ?

A UBI requires the government to pay every citizen a fixed amount of money on a regular basis and without any conditionalities.


Why a UBI ?

Crucial to the appeal for such a demand — for a UBI — is that millions of people remain unemployed and are extremely poor, despite rapid economic growth in the last three decades.


Limited version of UBI

The present govt has already unfolded a limited version of the UBI in the form of the Pradhanmantri Kisan Samman Nidhi Yojana (PM-KISAN) which promises ₹6,000 per annum to farmers who own less than 2 hectares of land.


Where will  UBI work ?

  • The UBI is neither an antidote to the vagaries of market forces nor a substitute for basic public services, especially health and education.
  • Besides, there is no need to transfer money to middle- and high-income earners as well as large landowners.
  • However, there is a strong case for direct income transfers to some groups: landless labourers, agricultural workers and marginal farmers who suffer from multi-dimensional poverty.
  • These groups have not benefited from economic growth. They were and still are the poorest Indians. Various welfare schemes have also failed to bring them out of penury.

How the above groups have not been historically able to avail the benefits?

  • Institutional credits account for less than 15% of the total borrowing by landless agricultural workers; the figure for marginal and small farmers is only 30%.
  • These groups have to borrow from moneylenders and adhatiyas at exorbitant interest rates ranging from 24 to 60%. As a result, they do not stand to benefit much from the interest rate subsidy for the agriculture sector.
  • Likewise, the benefits of subsidised fertilizers and power are enjoyed largely by big farmers.
  • In urban areas, contract workers and those in the informal sector face a similar problem. The rapid pace of automation of low-skill jobs and formalisation of the retail sector mean the prospects of these groups are even bleaker.

How can UBI help these groups?

  • An income support of, say, ₹15,000 per annum can be a good supplement to their livelihoods — an amount worth more than a third of the average consumption of the poorest 25% households, and more than a fourth of the annual income of marginal farmers.
  • This additional income can reduce the incidence of indebtedness among marginal farmers, thereby helping them escape moneylenders and adhatiyas.
  • Besides, it can go a long way in helping the poor to make ends meet. Several studies have shown that at high levels of impoverishment, even a small income supplement can improve nutrient intake, and increase enrolment and school attendance for students coming from poor households.
  • Income transfers to the poor will lead to improved health and educational outcomes, which in turn would lead to a more productive workforce.
  • It will help bring a large number of households out of the poverty trap or prevent them from falling into it in the event of exigencies such as illness.
  • It will reduce income inequalities.
  • Since the poor spend most of their income, a boost in their income will increase demand and promote economic activities in rural areas.

Can UBI discourage beneficiaries from seeking work?

  • Cash transfers can result in withdrawal of beneficiaries from the labour force. However, the income support suggested above is not too large to discourage beneficiaries from seeking work. In fact, it can promote employment and economic activities.
  • For instance, income receipts can come in handy as interest-free working capital for several categories of beneficiaries (fruit and vegetable vendors and small artisans), thereby promoting their business and employment in the process. Moreover, such a scheme will have three immediate benefits.

Can UBI replace basic services?

  • An income transfer scheme cannot be a substitute for universal basic services.
  • The direct income support to the poor will deliver the benefits mentioned only if it comes on top of public services such as primary health and education.
  • This means that direct transfers should not be at the expense of public services for primary health and education.

How to make UBI effective?

  • It seems to be a good idea to transfer the money into the bank accounts of women of the beneficiary households. Women tend to spend more of their income on health and the education of children.
  • Budgetary allocation for basic services should be raised significantly.
  • Programmes such as the Mahatma Gandhi Rural Employment Guarantee Scheme should also stay.
  • It will have to be restricted to the poorest of poor households. The Socio-Economic and Caste Census (SECC) 2011 can be used to identify the neediest.
  • Groups suffering from multidimensional poverty such as the destitute, the shelter-less, manual scavengers, tribal groups, and former bonded labourers should be automatically included.
  • It should include many small farmers who face deprivation criteria such as families without any bread-earning adult member, and those without a pucca house.
  • The Aadhaar identity can be used to rule out duplications and update the list of eligible households.
  • The tax kitty can be expanded by reintroducing wealth tax.
  • The required amount for UBI is beyond the Centre’s fiscal capacity at the moment. Therefore, the cost will have to be shared by States.
  • States such as Telangana and Odisha are already providing direct income support to their farmers. These States can extend their schemes to include the ‘non-farmer poor’. The other States too should join in.

Conclusion

The income transfer scheme is costly. However, the cost of persistent poverty is much higher.


 

Editorial Simplified: The Best way to Vote | GS – II

Relevance :  GS Paper II (Polity & Governance)


Why has this issue cropped up?

Whether or not to use EVMs (electronic voting machines) for elections in India has been a raging debate of late. There have been claims of hacking of EVMs and counter-claims of  its impossibility.


Can EVMs be hacked?

  • On the one hand there have been claims that all computer systems can be hacked . 
  • There indeed are computer systems that are provably secure, but sometimes such guarantees are difficult even for many well-designed ones.
  • The question of whether they can be hacked or not is often “undecidable”.
  • The fact that a system has not yet been hacked has sometimes been claimed as a proof of its infallibility. That a system has not been hacked provides no guarantee that it cannot be.

Manual ballot vs EVM

  • Manual ballot has the advantage of not taking away agency from the poll officials, whose understanding of the poll process enables them to improvise on the spot to try and ensure correctness.
  • In contrast, the obscurity of an EVM makes its correctness analysis absolutely crucial.
  • Public posturing by the ECI, based on pronouncements by a hand-picked set of experts, does not engender confidence.

Ways to secure voting

  • Ultimately the onus of establishing trust, either formally through verifiable proofs, or even informally using best practices and due-diligence, must always lie with the designers.
  • Correctness demands that all votes are accurately counted and there are no false or duplicate votes.
  • Secrecy demands that it should be impossible to determine who an individual voted for, provided the voting is not completely lopsided for any candidate or any social or political groups.
  • Anonymity — indistinguishability from a specified number of other voters — follows from secrecy. Secrecy and anonymity are necessary conditions for coercion-free voting.
  • Sufficient conditions for coercion-free voting will require methods and processes beyond an EVM.
  • Verifiability demands that it should be possible to prove to every voter individually that their vote has been accounted for correctly in the aggregate without revealing, or even determining, the vote.
  • Verifiability also implies non-repudiability — that is, if a voter falsely claims to have voted differently from what she actually did, it should be possible to prove that the claim is false without determining who she voted for.
  • Identity verification must be certified by the polling officer and can either be offline or online, and must have its own guarantees.
  • Un-hackability demands that the EVM should be tamper-proof, through any direct or even side-channel attacks.
  • Fault tolerance demands that the system should be resilient to network and component failures. In particular, there should never be any data loss.
  • Consistency demands that the design and implementation of all EVMs must be identical, and provably so at all stages of the election.
  • Finally, auditability and self-certifiability demand that it should be possible to verify the above invariant conditions at all stages of voting.
  • The EVM should be able to self-certify and provide proofs of all the above invariants at any stage.

Conclusion

It is imperative that the complete design, analysis and the hardware synthesis specifications be made public at the earliest so that the EVM may be subjected to rigorous scrutiny by the general public, institutions, political party representatives and experts.


 

Essential Facts (Prelims): 14 March, 2019


Global Environmental Outlook

Category: Environment

  • India could save at least $3 trillion in healthcare costs if it implemented policy initiatives consistent with ensuring that the globe didn’t heat up beyond 1.5 degrees Celsius by the turn of the century, says the sixth edition of the Global Environmental Outlook (GEO).
  • Global Environmental Outlook (GEO) is prepared by the United Nations Environment Programme.
  • India’s stated commitment is to lower emissions intensity of its GDP by 33-35% compared to 2005 levels by 2030; increase total cumulative electricity generation from fossil free energy sources to 40% by 2030, and create additional carbon sink of 2.5 to 3 billion tons through additional forest and tree cover.
  • The Paris Agreement aims to keep global temperature rise to below 2 degrees Celsius above pre-industrial levels.

TIR Convention

Category: International

  • The first shipment under the United Nations ‘Transports Internationaux Routiers’ (TIR) convention arrived in India from Afghanistan through Iran’s Chabahar Port.
  • The consignments arrived at port of Nhava Sheva, Mumbai.
  • TIR convention will help in fast and easy movement of goods across multiple countries under a common customs document and guarantee.
  • India had joined the TIR Convention (the United Nations Customs Convention on International Transport of Goods under cover of TIR Carnets) in 2017.
  • The convention allows goods to be outlined in a TIR carnet and sealed in load compartments.
  • Customs officials verify the carnet and check the seals, with no need for physical checking of the contents, enabling shipments to pass through countries without being opened at borders.
  • Reciprocal recognition of customs controls is at the heart of the Convention. This enables a facilitative and non-intrusive environment for multi-modal transport of goods through several countries.
  • TIR will play a pivotal role in improving ease of doing business and pave the way for smoother and safer transport of goods across international borders and will help boost trade between India, Central Asia, Europe and Russia
  • It will act as a strong catalyst for moving goods using the multi-modal transportation route like Chabahar and International North-South Transport (INSTC) Corridor.

Forex swaps

Category: Economy

  • The Reserve Bank of India (RBI) has decided to inject rupee liquidity into the system through long-term foreign exchange buy/sell swap — a first-of-its-kind instrument used for liquidity management.
  • The RBI would conduct dollar-rupee buy/sell swap auction of $5 billion for a three-year tenor on March 26.
  • The move is seen to lower the dependence on open market operations which have been a significant amount of the overall borrowing.
  • The move would boost RBI’s foreign exchange reserves which is around $402 billion.

Air pollution-Diabetes

Category: Environment

  • Long-term exposure to harmful smog particles increases the risk of diabetes, a new study in China has shown, providing evidence for a link between the country’s air pollution and the disease.
  • China is facing the largest diabetes problem in the world with around 11% of its population suffering from the metabolic illness.

Mercer’s index

Category : International

  • The Austrian capital Vienna has topped Mercer’s index of most liveable cities for the 10th year in a row.
  • Baghdad was ranked last.