The main opposition party in India, the Congress party, has just promised to implement a “nationwide minimum income for the poor”, rolling out the unprecedent scheme starting as soon as May 2019, if it gets elected. The party’s president Rahul Gandhi, has announced this on Monday, while speaking to farmers in Chhattisgarh state, where Congress was elected after promising statewide loan waivers.
Critics from the Bharatiya Janata Party (BJP), currently in power, dismiss this minimum income for the poor as a false promise from Congress, taken in a populist fever given the upcoming general elections, but Congress leaders have replied with the fact that they are fulfilling their promises on farm loan waivers in the states where they have been elected to recently. According to them, namely though BJP leader Ravi Schankar, this is just one more announcement, among many others which never saw the light of day. As Shankar speaks, though, regional leaders are fulfilling some of the Congress party regional electoral promises. Ashok Gehlot, just recently elected as chief minister of the Rajasthan region, India’s largest state located on the East side shouldered by Pakistan, just said on Monday that “whatever promises [Rahul Gandhi] made during assembly elections in Rajasthan, Madhya Pradesh and Chhattisgarth, we are fulfilling them, be it farm loan waiver or allowance to unemployed youths.”
Rahul Gandhi has firmly stated: “Nobody will remain hungry and nobody will remain poor as all poor people will be entitled to a guaranteed income. We will do this in Chhattisgarh, Madhya Pradesh, Rajasthan and all other states as well. All you have to do is to give us an opportunity”. Particulars have not yet been revealed (for instance, what are the parameters defining “poor” in India), but this announcement from Congress comes on the wake of the 2016-2017 Economic Survey, which suggested the implementation of a basic income to support the bottom 75% of the population in terms of income. In that document, the scheme’s realization would include the rollback of several (conditional) subsidies.
Running up these last months to the general election, spirits are agitated. There has been speculation on whether Narenda Modi and his government would attempt to implement a nationwide basic income on this week’s presentation of the interim budget, as a response to farmers protests all over the country. That led some to think that Ghandi’s move was meant as a strike to turn the table and get Congress one step ahead facing the impending elections. Could be. However, government officials are sceptical about how to finance such a bold policy, without cutting on State essential services and unleashing “runaway inflation”, which discourages the belief that government will make history in only three months.
As expected, the Congress party leadership was quick to support Gandhi’s announcement, with messages and statements from Chidambaram, Sheila Dikshit and Bhalchandra Mungekar, all Congress heavyweights (Chidambaram occupied ministerial positions for ten years, from 2004 and 2014, and Sheila was the longest serving Chief Minister of Delhi). Chidambaram as stated that “the poor in India have the first charge on the resources of the country and the party will find the resources to implement the promise of Rahul Gandhi.” He has been nominated the Congress Manifesto chairman for the 2019 elections, steady on the belief that “now we should make a determined effort to wipe out poverty in India”.
Chidambaram. Picture Credit to: The News Minute
Whoever gets to implement basic income in India, the proposal as it stands seems to be framed as a Negative Income Tax (NIT), since it is being direct to the poor. Arguably, the financing mechanism will expectedly use taxes and savings on welfare schemes to make direct cash transfers to those who fall below a certain poverty threshold. The next few months will be critical to Indian politics, and probably to the world’s social landscape. Right now, all eyes are on India. Sarath Davala, a long-standing basic income activist in India and internationally, has stated on Facebook:
“Indian National Congress, the main opposition party now announces Basic Income to the poor. Details are yet to be worked out. I cannot ask for more. Ironically though, our real challenge begins NOW – translating the idea plus evidence into concrete national policy without diluting the spirit of basic income.”
BIEN Civic Forum will be held on the 22nd of August. On this day, having been called “India Day”, two major plenary discussions will be held: one that focuses on the Indian state of Telangana and its policy initiatives related to basic income, and a second one about the more general debate at the Indian national level.
As for the Thematic Areas for Plenary Sessions, these have been improved and detailed, as follows:
Ideological Perspectives and Diverse Worldviews on Basic Income
Exploring different ideological perspectives and worldviews that see an unconditional Basic Income as a desirable component of a more equitable and inclusive society
Women’s Care and Unpaid Work: Is Basic Income an essential component of a new paradigm of Equity?
What implications and impact would basic income have on the lives women who constitute more than half of the global population? Can we talk of a sustainable society as long as we steal labor from women? Can an unconditional basic income remedy this structural inequity?
Is Basic Income the Foundation of a Caring Economy and Society?
Is it possible to build an economy and a society that is based on values of caring, sharing and partnering rather than power, domination and control? Is an unconditional basic income an essential ingredient of such a society?
The Emancipatory Potential: What forms of Freedom and what kind of Community Life does Basic Income promote?
Basic Income experiments across the world have demonstrated repeatedly that an unconditional basic income has a strong emancipatory effect of its recipients. It loosens the constraints of existence and liberates the mind to seek a life and a community better than what we have now. What implications does this freedom and emancipation have on us and the communities that we dwell in?
Basic Income, the Commons and Sovereign Wealth Funds
Our society privileges and celebrates private inheritance, but it equally turns invisible what can be called our public inheritance, and the fact that it is people who own natural resources and the state is just a custodian. This perspective if implemented can radically transform the way we view, manage and account for our natural wealth and endowments.
BI Pilots: Opportunities and Limits of Evidence
In both the low-income countries and in high-income countries, there have been basic income pilot studies. While we already have the results of some of the studies, by mid-2019, we are likely to have more results. The Congress will deliberate both the results and also what they can achieve in terms of policy change
Basic Income and Political Action: What does it take to transform and idea into policy?
It is one thing to have strong evidence from pilot studies and something else to get the acceptance of the policy makers and persuade them to act on it. There have been some pioneers among politicians and policy-makers across continents who have taken the plunge and implemented different versions unconditional income transfers, inspired by the spirit of the idea of basic income. Do we see them as first steps towards a full UBI? Or as distortions of the idea?
Development Aid and Corporate Philanthropy: Is Basic Income a Better Paradigm and Way Forward?
In recent years, there has been a great deal of rethinking about the effectiveness of the current paradigms of giving aid either to countries or to communities. Unconditional Basic Income is increasingly emerging as a radical alternative to conventional notions of giving aid. We witness this shift as much within the UN think-tanks as that of corporate philanthropy.
As for thematic areas for concurrent sessions have been updated and completed:
Ideological Perspectives on Basic Income
Women’s Care and Unpaid Work: Is Basic Income the new paradigm of Equity?
Basic Income in Development Aid Debate: Is there a Paradigm-shift?
Religious Perspectives on Basic Income
Basic Income as a Foundation of a Caring Economy and Society?
What forms of Freedom and What kind of Community Life does Basic Income promote?
Basic Income and Blockchain Technology: Are there Synergies?
Basic Income, Poverty and Rural Livelihoods
Basic Income, the Commons, and Sovereign Wealth Funds: Is Public Inheritance an emerging issue?
Basic Income Pilots: Opportunities and Limits
Basic Income and Political Action: What does it take to transform an Idea into Policy?
Basic Income and Corporate Philanthropy: Is Basic Income a better paradigm and way forward?
Basic Income and Children
Basic Income and Mental Health
Basic Income and Intentional Communities: What does this Experience Teach us?
There will also be a Short Films Exhibition, organized in partnership with Grundeinkommen Television (Gtv), which a is part of the Initiative Grundeinkommen, a pioneering civil society initiative established in 2008. Guidelines for submission:
The length of the Film should be below 15 minutes;
Your film should be made in 2018 or 2019 and be shown for the first time to a wider audience at the Congress;
The film should be in English or with English subtitles;
Entries should reach latest by 1st June 2019;
A committee appointed by INBI will select the entries for exhibition at the Congress;
Two of these selected films will be jointly rewarded INBI Short Film Prize of 500 US Dollars each.
For further information and to submit films, please contact Enno Schmidt, Chair of the Committee. ennoschmidt@me.com.
General registrations can be made here. For paper abstract submission (in MS Word document between 300 and 500 words), please email to: 19biencongress.india@gmail.com.
Alexandria Ocasio-Cortez cartoon. Picture credit to: Folding Hamster.
Alexandria Ocasio-Cortez (AOC) “keeps kicking ass”, as put by Nathan Robinson, editor-in-chief of the Current Affairs magazine. Unlike other young left-wing politicians in the past, who end up conforming and moderating their views on important political issues, according to (Democratic) Party Elders’ advices, AOC keeps a sharp edge, which has already won her the name “radical”. Instead of falling into meekness or fright, she has actually embraced the nickname, by stating that “I think that it only has ever been radicals that have changed this country.” And she gives examples: Abraham Lincoln with the Emancipation Proclamation signature, Franklin Roosevelt with the first Social Security program. Among others, for sure.
According to some, then, AOC has been pushing nothing but “radical” ideas, ever since she was elected as an MP in Congress, last November. She starred the presentation of a Resolution which outlined the very ambitious “Green New Deal”, allowing the United States to meet its environmental duties as far as energy use and production are concerned. Using that same document, she has been also advocating for nothing less than the end of gender and class divisions in the American society, along with the abolition of poverty. Moreover, she has mentioned that the pursuit of basic income will probably be a part of a real progressive agenda for the country.
Not happy with that, and because “she doesn’t take crap”, AOC went on to defend that taxes should be raised to as much as 70% for the ultra-rich. Naturally that this proposal was met with horror by many right-wing politicians, but it seems that, actually, the proposal is sensible and is backed by 59% of Americans (recent poll by The Hill-HarrisX). This apparently “radical” proposal is also supported by mainstream economists like Paul Krugman, plus a surprising 45% of Republicans (71% of Democrats support it). AOC hasn’t found these survey results surprising, since she recognizes that “What we see, overall, is that the vast majority of Americans know that income inequality is one of the biggest issues of our time”. This fair tax hike would, according to Washington Post’s Jeff Stein, be enough to cover for Bernie Sanders’ public college plan, erase over half or deeply alleviate student debt in the US, get Barack Obama’s plan to offer universal prekindergarten off the shelf…or a very modest unconditional income of 280 US$/year for every adult citizen in the country.
On a final note, AOC has also shown to master online communication, which really helps her message coming through and, most importantly, get discussions going. Using Trump’s favorite online toy, Twitter, her comments have generated more monthly interactions (11,8 million) than the sum of three of the most popular Democratic senators Kamala Harris, Bernie Sanders and Elizabeth Warren, which is also more online interaction than the largest American corporate media outlets…combined.
Indian woman worker with spectacles. Picture credit to: Sarah Day
New ideas seem to be running dry in the Indian political context. Within Congress, Government (BJP – Bharatiya Janata Party) and opposition parties (ex.: AAP – Aam Aadmi Party). Tweaking with the minimum support prices for food production and/or with the multiplicity of welfare programs is not going to substantially change rural population’s main concern, which is declining real wages (purchasing power after adjustment for price variations). These have been steadily falling since 2014, ever since the BJP came to power, which means that to stay too focused on the former issues will not probably get BJP reelected this year. Also farm loan waivers (credit write off) has been used as a political tool, especially by the opposition (mostly center and left-wing) parties, given the high indebtedness rates of rural families (over 50%) and their dependency on predatory lenders (also over 50%).
However, according to political analyst Saubhik Chakrabarti, from The Economic Times, loan waiver is not going to be decisive for these next elections, even though it has been flagged by the opposition in regional suffrage (which has won three states from BJP). This decisiveness might very well come from pushing the basic income policy, an old new idea that has been hot in India ever since the 2016-2017 Economic Survey Report featured a whole chapter to it. And this applies to both parties / coalitions with a shot at forming a government in 2019, because what really impacts real wages is not topping crop prices or forever trying to fix a broken welfare distribution system (very complex and prone to corruption). A real difference may come from directly and unconditionally giving people what they need the most, economically: money.
Even though there will be no time to properly design, let alone implement a basic income scheme regionally – and even less likely a national implementation – before this year’s elections (latest in May), Chakrabarti suggests that one or more pilot tests could be tried out. According to him, that could be done “in chosen districts, accompanied by a blaze of political publicity, [being] enough to take to voters, with the promise that re-election will lead to an across-India UBI program.”
In the last two weeks, there has been much speculation in some sections of media about Prime Minister Narendra Modi seriously considering Universal Basic Income (UBI) as a policy option. This comes on the heels of the electoral debacle Modi’s party faced in the recent elections in four states, and coincidentally just months ahead of the 2019 parliamentary elections.
This is the second wave of interest the current government has shown toward the idea of Universal Basic Income (UBI). The first wave was in early 2017 when the then Chief Economic Advisor to the Government of India, Dr. Arvind Subramanian, included a substantial chapter [2] on UBI in his annual Economic Survey (2016-17) which was presented to the Indian Parliament. The chapter explored the concept of UBI and observed that it could be a way forward to address poverty. Subramanian stated that a full-fledged UBI may not be feasible in India immediately, though it was possible to think of a Quasi UBI (QUBI) which would identify specific demographic groups in the population and give them an unconditional basic income. One of his speculations was that a QUBI could be to all women citizens, which would ensure that every household will receive a basic income. The discussion within the government did not proceed beyond this point, apparently as the Prime Minister was not convinced at that time of the political dividends flowing from this policy route.
The immediate trigger for the second wave of interest in basic income is the recent elections in the states of Telangana, Rajasthan, Madhya Pradesh and Chhattisgarh. At the time of these elections, the financial crisis affecting farmers became center-stage and the Congress party promised that they would waive farm loans as soon as they came to power. And they did so when they took charge of three states.
In the state of Telangana, the ruling party TRS went a step further by implementing several months before the elections a scheme called Rythu Bandhu, (Farmer Investment Support) which gives to the farmers Rs. 8000 (USD $115)[3] per acre per annum[4]. The cutting edge of the scheme is that it is unconditional, a feature that is considered central to the idea of basic income. Irrespective of whether farmers take up cultivation or not, the investment will be transferred to the farmers. The scheme benefited about 5.8 million farmers who own a total of 14 million acres of cultivable land in Telangana.
In 2017, responding to farmers’ agitation in the state, the Madhya Pradesh government implemented a different kind of scheme for farmers. It was called Bhavantar Bhugtan Yojana (BBY) which originally intended to pay farmers the net difference between the actual sale price and the Minimum Support Price announced by the government. Subsequently, however, the government introduced the notion of a modal rate which is the average of the sale price of a given crop sold in Madhya Pradesh on any given day, and in markets of two other neighboring states.
Both the schemes ran into controversy, particularly the latter. Regarding the Rythu Bandhu scheme, the criticism was that the scheme does not give any benefit to the tenant farmers who actually cultivate the land. Secondly, the scheme was criticized as regressive since it was paying rich farmers as well. The government then appointed J-PAL, a reputed international group based in the Massachusetts Institute of Technology in the United States to monitor and evaluate the scheme. In the initial survey conducted by it after the first round of transfers were made in June 2018 revealed that most cheques were for less than Rs.20,000 (USD $287), and only 0.8% of the farmers received more than Rs.50,000 (USD $718). A follow-up survey by J-PAL revealed that farmers spent the money judiciously with over 77% purchasing crop inputs, and 92% percent saying that they were satisfied with the scheme.
The Madhya Pradesh scheme was criticized because it brought in the notion of a modal rate which was far above the actual sale price. Ordinary farmers, who were unaware of the critical distinction between the actual sale price and the modal price, were in for a shock. Assuming the government would compensate them the difference between MSP and Sale Price, many of them also made distress sale of their produce and then realized that they would get much less compensation. Disappointed with this conditionality, many farmers were unwilling to sign up for the subsequent crop. This was not the only conditional aspect of this policy. The sale must take place during a prescribed window of three months. There was a cap on the volume that a farmer can get compensated per hectare. There was also a proposal that if a farmer sells his produce for less than 50% of the MSP, he becomes ineligible since it is the poor quality of his produce that is the reason for the low sale price, and that government should not compensate the farmer for producing low quality produce. And lastly, the scheme was applicable to only seven specific crops.
It appears that these two schemes and the farm loan waivers are the three primary options that the central government is discussing in order to find an effective response to the distress farmers all over the country are experiencing. Let us consider each one of them.
First, the loan waivers. All the three new Congress governments have announced loan waivers within days after assuming power. Even as these announcements have been taking place, experts from different locations have criticized loan waivers as harmful to the economy. Following these announcements by the new Congress governments, the former RBI Governor Dr. Raghuram Rajan released a document entitled ‘An Economic Strategy for India’ which he co-authored with 12 other well-known economists including the IMF Chief Economist Gita Gopinath and Sajjid Chinoy of JP Morgan, among others. The report advises the government to “… eschew loan waivers that divert resources from needed investment.” Arvind Subramanian in a recent interview severely criticized farm loan waivers as “an inefficient, retrograde and even perverse method of addressing farmers’ distress”. He further added that nearly 50% of the small and marginal farmers cannot and do not borrow from formal banks and they are completely left out of this mode of addressing farmers’ issues. Dr. Urjit Patel who had recently resigned as the RBI governor criticized farm loan waivers as corrupting the credit culture in the country. Addressing his party workers in Karnataka, PM Modi himself called Karnataka government’s farm loan waivers as a “cruel joke on farmers”, and that it benefits only a handful of farmers.
It is clear the farm loan waiver is not likely to be part of PM Modi’s new grand electoral narrative. This now brings us to the other two options. Between the two, the Rythu Bandhu seems to be a clear winner not just because of the electoral gains that the TRS party reaped from its introduction. It is because of certain essential features it has that are unique and demonstrate a clear transformation in the very grammar of welfare policymaking in India.
Firstly, it is an entitlement without having numerous conditionalities. The only conditionality is that the recipient must have a clear title. The curse of various welfare schemes in India is that each one comes with innumerable conditionalities thereby giving extraordinary discretion to inspectors who administer it. Rythu Bandhu makes a departure from this welfare practice. This is based on the assumption that any support given by the government must be given only to the deserving and that we need to ensure that it is spent only for the purpose it is given. Who deserves and who does not is decided by the government. And so is the purpose. Secondly, Rythu Bandhu is a proactive policy and not relief after the calamity has occurred. In fact, some economists such as Ashok Gulati, Arvind Subramanian, Bimal Jalan, etc., have said that it could be a potential agricultural policy for the entire country. The main point is that it is defined as an investment rather than welfare. Thirdly, because it is unconditional and a cash transfer, it is very easy to deliver. The record of delivery of Rythu Bandhu has been very impressive. Except in those cases where the land ownership is in dispute, the majority of farmers in the state have received cash in their bank accounts.
In addition to these innovative features, the TRS government has also added an additional scheme to all farmers called Rythu Bima, a life insurance scheme which provides coverage of Rs. 500,000 (USD $7,179). The annual premium of Rs.2272 (USD $33) per farmer is to be paid entirely by the state government.
This is this grand electoral moment that PM Modi is facing. What is he likely to do? Given that farmers have become quite vocal and that there is hardly any time before the Model Code of Conduct would come into operation around March 2019, he must respond in some form in the interim budget. Most likely, he will implement some version of Rythu Bandhu in combination with an insurance scheme for farmers. While this cannot be called a true UBI, it does carry the spirit of the idea of basic income because of its unconditionality. Normally we would be inclined to dismiss this is an electoral gimmick. We should not forget that in an electoral democracy, change comes in a clumsy way. We must be clear when we are positively moving forward and when we are not. In this case, the Indian political parties are embracing the spirit of basic income. This shift in India’s policy grammar should be seen as a welcome move in our journey to build a better society.
[1] Sarath Davala is the Vice-Chair of BIEN and Coordinator of India Network for Basic Income (INBI).
[3] To make sense of these amounts, it is useful to know that the rural poverty line in India is defined on the basic of per capita expenditure, which is half a dollar a day.
[4] This amount will be disbursed twice in a year, one just before Rabi crop season and one before the Kharif crop season.
