1 June 2020 06:59 PM

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AVAY SHUKLA | 23 APRIL, 2020

The Time for Universal Basic Income Has Arrived - Scraps Mean Little

Needed overhaul


It is time to accept that the global mayhem currently playing out has not all been created by the Coronavirus- it is a catalyst which has exposed the many problems that already existed- chief among them being rampant (and increasing) inequality, pathetic health care systems, lack of social safety nets and environmental degradation.

COVID 19 is not just a public health issue- it will begin as one, but its real impact in times to come shall be on livelihoods, social structures, economic models and our ways of life.

Limiting myself to India, it is clear that if we don't reform our governance immediately, we will be even more vulnerable to COVID 22 or 23 when it comes around again, as it inevitably shall. There is only so much dependence that can be placed on Ayurveda, Pranayam, Yoga, lock downs and lighting of candles.

Take the economic model that reigns supreme these days, and has since the 1990s- the neo liberal capitalist theory. Its false Gods are GDP and the creation of wealth, never mind that the top 1% of Indians own 51.3% of the national wealth, leaving only 4.8% for the bottom 60%; putting it another way, 12 million Indians own four times the wealth held by 953 million Indians ( OXFAM report, Davos 2020).

The coronavirus is just a temporary nuisance for the former, but a life and death issue for the latter, as the misery and mass suffering of millions of migrants and abandoned labourers in Mumbai, Anand Vihar, Surat, Hyderabad, etc testify to. It is expected that perhaps as many as 200 million additional Indians shall be pushed below the poverty line this year, adding to the 250 million already there. Many will not even be able to access the PDS rations because they are either migrants or do not have ration cards; the collapsed economy will render tens of millions unemployed for a long time.

COVID has exposed the inequity and hollowness of the economic model we have been following and it is time to throw out the billionaire with the bath water. It is public values, and not private values, which should shape our economic planning; the distribution of wealth is as vital as the creation of wealth, and the wretched must be given their rightful place at the high table, they should have first claim to the nation's resources.

Noam Chomsky, the American philosopher and linguist in an interview to DIEM TV ( which all of us must watch) does not mince his words. He ascribes the devastating economic impact of COVID 19 to a " neo-liberal plague", a " savage neo-liberalism" the script of which has been dictated to governments by their " corporate masters". In an alarming aside he further warns that "authoritarian states are quite compatible with neo-liberalism."

We have seen enough evidence of this in India too, particularly over the last six years. Corona is telling us that this mould has to be broken, the "Daridranarayan" of Mahatma Gandhi, not the billionaire of Davos, must now become the focal point of all economic planning. A country with more than a third of its population below the poverty line, and with a current unemployment rate of 24% ( rising every day), cannot even think of any other model.

The time for Universal Basic Income( UBI) has arrived. What India's 800 million poor/ migrant/ landless population desperately needs now is a safety net, not just an uncertain 10 kgs of rice, which in any case is not available to the 139 million migrant workers ( Census 2011) who lack a ration card or even a BPL card. Leading economists and Nobel prize winners have been imploring the central government to dispense with these requirements at a time like this when starvation is just over the horizon, but the response would put a four toed sloth to shame.

UBI is already being tested on a pilot basis in some countries, but the time for clinical trials is over and it must be implemented in the next few months. Vijay Joshi, an eminent Oxford economist, has estimated in a study that giving Rs. 17500 to each household in India every year would cost 3.5% of GDP or about Rupees seven lakh crores. A lot of this, however, can be recouped by doing away with many non-merit subsidies which currently total up to 7.5% of our GDP.

Moreover, UBI does not have to be universal: it can be restricted to only the BPL and the migrant workers, in which form its financial implication would be significantly less. We already have the required digital and banking architecture to implement this- the famed JAM trilogy of Jan Dhan, Aadhar and Mobiles; using it for welfare is much better than employing it for surveillance. Combined with a more inclusive PDS, while the UBI cannot prevent the poor from falling, it can at least ensure that they will rise again some day when the jobs return.

Exiled by force from their jobs and the cities, almost the entire labour force has now reverse- migrated to their villages, presenting a problematic irony: now that parts of the economy are re-opening there are no workers to turn the wheels of commerce and industry. There is no labour for agricultural operations, 85% of truck drivers have simply abandoned their vehicles ( and freight) on the roads and fled, most construction labour have gone. They are not likely to return soon after their horrific experiences, their fear of further indignities and uncertainties outstrips their fear of the virus.

Even if the inevitable prospect of starvation in the villages forces them to return, the same script will be repeated when the next Corona strikes. To prevent a recurrence of the humanitarian tragedy now playing out, it is imperative that they be assured of a minimum income. Not ad -hoc, temporary doles but a permanent, assured income which will enable them to weather any future storms, stay put, and resume working when the clouds have gone.

Lack of financial resources can no longer be an alibi for the government to deny them a UBI. A country which aspires to be a five trillion dollar economy cannot allow almost half its population to wallow in poverty and live a life of extreme indignity.

Our economic model can no longer be dictated by corporates who have siphoned off ten lakh crore rupees under the guise of NPAs- sufficient, if recovered, to fund UBI for the next five years. This is not just an economic crisis, as Dalal Street would have us believe, but a civilisational crisis for the country as a whole.

Worse, it is an existential crisis for our poor: Ms Sitharaman may not admit it, but it takes more than five hundred rupees a month, ten kilos of rice and a police lathi to keep body and soul together. Ask that weeping young worker we all saw on TV at Anand Vihar the other day, without any money, job or food; he just wanted to walk back home in UP two hundred miles away but was not even being allowed to do that.

He has probably gone now but ask yourself- Why in hell should he want to come back? And if he doesn't, then how in hell do we become a five trillion dollar economy?

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