Four decades after his grandmother stormed back on the power of ‘garibi hatao’, can Rahul Gandhi's UBI work?
Universal Basic Income (UBI) is an idea that is being agonised over by politicians, economists and social scientists across the world. Recently, Finland began a small-scale pilot of exactly such a scheme. However, what Congress president Rahul Gandhi is sure to make his main plank ahead of the 2019 general election is just such an idea. But given India’s huge size, even a pilot of such a scheme in the country will exceed national programmes across the world. More importantly, will it do any good? Well to start off, several million people in India are covered under various monthly income plans, old-age pensions and in some States monthly payments for unemployed youth.
In fact, a large proportion of people, who are unemployed and below the poverty line and who still live in their town or village, are likely covered by some sort of benefit scheme or another. Most of them offer minuscule sums of money, at best just a couple of thousand rupees every month. Subsuming many such welfare plans into one national umbrella will cover some people currently outside. But some existing schemes are not available uniformly in States simply because they are, for lack of a better word, bankrupt. There is the added problem of a massive volume of transient people across India, millions of urban poor and homeless without access to formal banking networks. How on earth does any such scheme plan to cover those? Of course, there is that other vital question on just how a potential Rahul Gandhi-led Government proposes to pay for this? India’s tax-paying classes are getting increasingly restless and any further cess or charges on taxes may lead to a flight of talent and capital that this country can barely afford. Possibly, one could argue that a single basic income directly delivered to accounts will actually be cheaper than having multiple subsidy schemes for the rural and urban poor.
However, the problem is that members of Rahul Gandhi’s cohort have been making noises against the rich buoyed by an Oxfam report. That could be disastrous for the country and will almost certainly lead to wealthy individuals pulling out their assets and acquiring global passports or residency which will devastate India. Then there is that other irony. Almost 40 years after Indira Gandhi promised ‘garibi hatao,’ there is still a huge number of Indians who are desperately poor thanks to decades of failed policies, leaking subsidies and uncontrolled population growth. We just need to look to our East to see what can be achieved by proper planning. China has lifted half a billion people out of poverty in the same timeframe. How? Not by indulging in things like an universal basic income but industrial development and becoming the factory to the world. The very fact that we are discussing this issue today is appreciating 70 years of policy failures and they include those by Mr Gandhi’s grandmother.