Editorial Simplified: No Shortcuts To Income Guarantee| GS – II

Relevance :  GS Paper  II


Theme of the article

Rahul Gandhi’s proposed scheme will do more harm than good if it comes at the cost of existing subsidies for the poor.


Why has this issue cropped up?

Congress president Rahul Gandhi d to end poverty and hunger by announcing  a Minimum Income Guarantee for the poor. This income transfer will target the poor with a minimum income of Rs 1,000 to Rs 1,800 a month.


Inferences  from  Minimum Income proposal

  • It suggests an acknowledgment that massive market-led economic growth, by itself, cannot raise millions out of grinding poverty.
  • This requires, with rapid growth, sensitively-designed direct state support to families who live with want.
  • It affirms a strive to build a redistributive welfare state.

Questions that arise

  • How the households will be identified ?
  • What the scale of assistance would be?
  • How the required resources will be raised?
  • What other elements of social protection, if any, would together with income-transfers constitute a defence against poverty.

Problems in executing Minimum Income programme

  • Most poor and socially powerless have a greater chance of being excluded by governments than included by them.
  • There is no objective way of evaluating incomes of households in the informal sector.
  • Poverty-selections give far too much discretion to the field bureaucracy, leading to enormous rent-seeking, excluding those most socially vulnerable by age, gender, caste, religious identity, migration, disability and geography.
  • Funds required for such transfers will be re-appropriated from those spent on food subsidies and other programmes.
  • If minimum income transfers are envisaged as substitutes to food and other existing food and social protection transfers, these are likely not to reduce hunger but will only aggravate it.
  • Culturally, decisions about food tend to be taken by women. So food transfers are far more likely to end up as food in the stomach of a child, than cash transfers, decisions about which tend to be taken by men.
  • Cash transfers also are inflationary in ways that food transfers are not.

Way forward

  • It is not that India cannot afford an income-support programme. Just that the pathway to this cannot be by cutting back on meagre existing subsidies to the poor.
  • Subsidies to the middle-classes are thrice in quantum to those for the poor, and can be curtailed by a redistributive state.
  • But most of all, there is considerable scope in taxing the wealth of India’s super-rich dollar billionaires.
  • If the Union budgets simply start by ending just the tax holidays to private businesses, they could fund far greater social spending, whether for income transfers, or health, education and social protection.
  • Income transfers to the poor can work only if these augment, not substitute, the existing support to the poor.
  • Welfare campaigners have for long demanded several kinds of cash transfers. These include universal pensions for the aged, single women-headed households, and persons with disability, equivalent to at least half the prevailing minimum wage.
  • There is also a strong case for maternity benefits for all women in informal work, equivalent to six months’ minimum wages, to bring some parity with women in the formal sector, enabling them rest, nutrition, breast-feeding and childcare.
  • Another form of income transfer for which the time has come is transfers to farmers for every acre of land they cultivate, as has been attempted by the Telangana and Odisha governments.
  • Expanding the National Employment Guarantee Scheme to a massive housing, water and sanitation programme for the urban poor would be the best mode of support for them.
  • Work under these programmes should also incorporate the care economy, including community-based child-care, disability and old-age care services.
  • Minimum Income would make sense only if the resources are mustered not by cutting back on existing programmes for the poor, which are already very poorly funded.
  • We must ensure universal public healthcare and public-funded education at all levels.

Conclusion

When Rahul Gandhi reminds us of our “brothers and sisters”, who are still forced to sleep hungry, he is invoking the idea of fraternity in our Constitution. This would require an entirely new social contract, one that ensures that no child sleeps hungry, or is deprived of a decent education, or dies without health care.


 

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