Agrarian distress has come to the forefront and turned to be a national issue, especially in the election year. From the days of Independence, the unemployment level has more or less fluctuated around a fixed figure. Demonetisation has had its adverse impact on the unorganised sector. Circumstances have compelled political parties to vive with each other to hold out schemes and programmes that marginally help the situation. Whatever be the programmes, the implementation thereof poses a perennial problem. In this scenario, schemes hitherto not thought of have been evolved by the State Government and the Central Government.
The National Democratic Alliance Government has already unfolded a limited version of the universal basic income (UBI) in the form of Pradhanmantri Kisan Samman Nidhi Yojana (PM-KISAN) which promises Rs 6,000 per annum to farmers who own less than two hectares of land. As indicated by media reports, the election manifesto of the Congress may announce an even more ambitious version of the scheme. But the idea of a UBI is gaining ground globally. It has supporters among the political Left and Right and among proponents as well as opponents of the free-market economy. A UBI requires the government to pay every citizen a fixed amount of money on a regular basis and without any conditions. It is asserted that such a demand (for a UBI) would help millions of unemployed and extremely poor people. This is despite a rapid economic growth in the last three decades. The UBI is not an antidote to the vagaries of market forces. It is also not a substitute for basic public services, especially health and education. Obviously, there is no need to transfer money to middle and high-income earners as well as large landowners. There is a strong case for direct income transfers to some groups like landless and agricultural workers and marginal farmers who suffer from multi-dimensional poverty. These groups have not benefitted from the professed economic growth. They were and still are the poorest. Various welfare schemes also failed to bring them out of the course of poverty.
There is grossly-inadequate availability of and access to institutional credit through banks and corporative societies. According to the National Sample Survey Office (NSSO) data from the 70th round, 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 private moneylenders 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. Similarly, the benefits of subsidised fertilisers and power are enjoyed largely by big farmers. In organised/industrial areas, contract workers and in the informal sector, the wage-earners face a similar problem. The rapid pace of automation of low-skill jobs and formalisation of the retail sector would lead to making the prospects of these groups even worse. An income support of like Rs 15,000 per annum can be a good supplement to their livelihoods. This amount is 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. The additional income can reduce the incidence of indebtedness among marginal farmers, thereby helping them escape the clutches of moneylenders. Additionally, it can go a long way in helping the poor make ends meet. Several studies have shown that at high levels of impoverishment, even a small income supplement can improve nutrient intake and enable increased enrolment and school attendance for students coming from poor households. In other words, income transfers to the poor will lead to improved health and educational impacts, which in turn would lead to a more productive workforce. 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 a greater share of their income on health and education of children. The effect of an income transfer scheme on unemployment is an important issue. Theoretically, cash transfers can result in withdrawal of beneficiaries from the labour force. However, the income support proposed or implemented, 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 like fruit and vegetable vendors and small artisans by promoting their business and employment in the process.
Such a scheme will also have three immediate benefits. One, 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. Two, it will reduce income inequalities. Three, since the poor spend most of their income, a boost in their income will increase demand and promote economic activities in rural areas. However, an income transfer scheme cannot be a substitute for universal basic services. The direct income support to the poor will deliver the benefits only if it accords primacy to public services. This implies that direct transfers should not be at the expense of public services for health and education. The budgetary allocation for these services should be raised significantly. Programmes like the Mahatma Gandhi Rural Employment Guarantee Scheme should also stay in an effective manner. With direct income support, the attractiveness and demand for the programmes is to gradually come down. However, as an interim measure, it will come to the benefit of the poorest and give them a proper safety net.
As an approximation, the number of eligible households is around 10 crore. That means that in its basic form, the scheme will require approximately Rs 1.5 lakh crore per annum. The PM-KISAN can be aligned to meet part of the cost. Moreover, the tax kitty can be expanded by reintroducing wealth tax. Nonetheless, the required amount is beyond the Centre’s fiscal capacity as at present. The cost will inevitably have to be shared by States. Some States such as Telangana and Odisha are already providing direct income support to farmers. These States can extend their schemes to include the ‘non-farmer poor’. The other States too should join in.
The problem also includes more than six crore landless labourers. It also includes many small farmers who face deprivation criteria such as families without any bread-earning adult member and those without a pucca house.
As mentioned earlier, the implementation of the programmes is more important than their announcement itself. The trend appears one of fanfare and propagandist announcements without their appropriate translation into reality at the ground level. The announcement of such programmes under UBI should not be at the cost of general social sector development schemes. The inevitability of budgetary constraints makes a dent into these endeavours. A time has come for the nation to debate the priorities so as to evolve an appropriate policy. Political parties have to rise above the sectarian considerations and think of the “nation”. Hitherto, the programmes, both at the State and Central levels, have been independently announced. This has its own malady because of different parties ruling in different parts of the country. A national cause is not to be turned into a forum of political brinkmanship. Evolving of UBI policies have to be formulated through a national debate and consensus so that the entire country rallies for implementation of such a radical programme. The cost of eradication of poverty should not deter appropriate action which alone can restructure socioeconomic framework in a positive direction. We must remind ourselves of the famous statement of Mahatma Gandhi, “There is enough for everyone’s needs, but there is not enough for our greed.”
(The writer, a Senior Advocate, is a former All India Service officer, a former diplomat, a former editor, a former President of Orissa High Court Bar Association and a former Advocate General of Odisha. jayantdas@hotmail.com)