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Is Rahul Gandhi's 'Minimum Income Guarantee' promise feasible?
'Is Rahul Gandhi's proposal of minimum income guarantee a viable promise?' One of my friends asked me.

In fact, many on social media too have doubted the feasibility of such a proposal and criticised it as an impossible electoral promise.

But then, as a neutral observer, one shouldn't dismiss anything. The 'Minimum Income guarantee' is nothing but NDA's long pending 'Universal Basic Income' scheme. As per this scheme either a section of people (belonging to low income category/poor) or all the citizens (after a certain age) may be given a certain amount monthly to meet their bare minimum expenses. The UBI to all is argued because in that way no person will be left out for sake of income certificate or such issues.

This concept is very old when kings used to pay certain people or sections of society a special cash allowance. In some places it's considered as social allowance, or welfare allowance etc. These types of welfare programs were debated in every century. From 2008 onwards, the debate picked up globally through various experiments. For example, Finland provided 560 Euros per month to 2000 unemployed people from January 2017 to December 2018 and then scrapped it. Ontario province of Canada started to pay 150 Canadian Dollars to 4000 people of low income or precarious jobs doing people as a pilot project last year but is now set to scrap it. Kenya is running a pilot project in 120 villages to pay $23 or a lump-sum $276 per person. The US is paying $2072 per adult person since 1980 in Alaska as Permanent Fund Dividend. Spain and Netherland too have started similar pilot programs where as Switzerland's voters rejected such a program.

However, we need to test this in Indian context. The point to be noted is that India is a welfare country. That means the government of India as well as state governments have a Constitutional responsibility for the welfare of their citizens. Providing a minimum or guaranteed income is neither unconstitutional nor should be a slogan.

The question really is whether it's feasible. Feasibility can be tested by what will be the amount required and how the amount can be arranged. Here, let me say that I prefer that all should get a guaranteed income irrespective of their income level or social condition or any other consideration. The reason is simple. No need to prepare an income certificate which might be forged or manipulated. No section should think that they are discriminated against like in quota cases. Those who need, will get the amount and those who pay taxes will get tax-relief.

What would be the required amount? There are estimates by different economists on the quantum of funds required. If Rs 10000 per annum is paid to all then it will cost 10 per cent of GDP. But how will this amount be arranged? Simply by ending subsidies worth 10 per cent of GDP, non-merit subsidies accounts for around 9 per cent of the GDP and privatisation of public sector to get another 1 per cent of GDP. However, is Rs 10000 a year sufficient? I think at least Rs 36000 a year (Rs 3000 per month) can do some justice and be effective. That means around 35 per cent of GDP must be spent. How funds will be arranged? Like I mentioned above, by cutting non-merit subsidies of 9%, ending MNRGS and PDS of 11 per cent each, this becomes 20 per cent. For another 15 per cent, other subsidies needs to be rolled back including government sponsored welfare schemes, implicit middle class subsidies, tax farm incomes (Rs 1000000 and beyond etc), increasing GST on some commodities etc. However, it can be only done if there's a political will.

I will not discuss the demerits of such a proposal in the context of social behaviour, because everything has some positives or negatives. But my worry is simple. India is a democracy and political interest of the parties is above all. Thus implementing such proposals must be benefiting politically too. For example, a political party might want to make UBI or MIG (Minimum Income guarantee) for a particular section only so as to make them a vote bank. You can't divide people into vote banks if you give all the same thing. If you roll back some subsidies, people will start demanding re-rolling of such subsidies despite getting UBI. Even if people don't demand still political parties will offer to re-introduce those subsidies as electoral SOPs for the sake of power. Thus, in this process again all subsidies will be re-enforced while the UBI or MIG still continues. In that case there would be chaos in the economy and soon the nation's economy will collapse.

The bottom line is that UBI or MIG has a utility to the society. But politicising this would be damaging to national interests. That's why perhaps the Modi government understanding all these considerations hasn't implemented such a proposal as yet. But Rahul Gandhi's MIG promise may force the Modi government to think on it as national interest is alright, but first, retaining power is the only priority for any political party especially when 2019 general election is knocking at the door.

In conclusion, I would say that MIG as proposed by Rahul Gandhi or UBI being deliberated by the Modi government is always feasible considering the amount being spent on welfare programs and subsidies. However, considering the Indian political environment, I would suggest that there should be a Constitutional amendment so that there would be a cap on spending towards subsidies, cash allowance and other individualistic or social welfare schemes.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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