In an effort to seize the initiative from Indian Prime Minister Narendra Modi’s Bharatiya Janata Party, the main opposition Congress Party has held out the promise of creating the world’s largest “minimum income scheme” for nearly 250 million poor people if voted to power in general elections beginning in two weeks.
Critics have slammed it as a populist measure to entice voters and questions have been raised on the funding of a scheme estimated to cost $52 billion. The ruling Bharatiya Janata Party has dismissed it as a “false dream” being shown to the people and pointed out that there are already a number of social welfare schemes for the poor.
But the promise has turned the spotlight on an idea that is getting attention - an income for the country’s lowest economic strata.
“The final assault on poverty has begun," Rahul Gandhi, the head of the Congress Party, said as he announced his pledge to give 20 percent of India’s poorest households, or 50 million families, a guaranteed income of about $1,050 a year.
Gandhi gave no details about how the ambitious project would be financed, but said that it would be fiscally prudent. “We’ve done all the calculations, we’ve asked the best economists.” It is being called “Nyay,” which means justice in Hindi.
Political analysts see the Congress Party’s announcement as a bid to outdo Prime Minister Modi, who last month announced a much more modest annual $90 cash handout for poor farmers. “The bigger the better in politics” was the refrain of many commentators.
Satish Misra, a political analyst in New Delhi, said the Congress Party’s promise would get resonance with tens of thousands of people disillusioned that the “good days” Modi promised when he came to power have proved elusive. “There is joblessness in the rural countryside, there is agricultural distress, people will look at this.”
Misra says it would bring attention back to bread and butter issues at a time when the ruling party has chosen to turn the focus on national security in the wake of recent tensions with Pakistan. “It would take the steam out of the external security narrative that the ruling party has been touting.”
A cross section of unskilled migrants from the countryside who flood mega cities like New Delhi and Mumbai in search of a livelihood say their principal challenge is not lack of an income, but meager wages.
“What I earn is barely enough to support me. I can’t think of any future,” said 36-year-old Parmanand Bhagat, who drives an electric rickshaw after trying his hand at two other occupations since he came from his village four years ago – working as a security guard and selling food on the pavement. “Only if I get some more money, I can plan ahead.”
Ramanand, a gardener who migrated three years back hoping to earn money to send back to his family in the village, faces the same challenge – his income of about $ 120 a month does not support their basic needs. “Buying enough food is a problem, clothing, education for my children, are also a challenge.”
The scheme has been announced at a time when the concept of a universal basic income has got attention in some developed countries such as Finland and France. In India, the debate has centered on giving an income to the poor. While a growing economy has rapidly lifted tens of millions out of poverty cutting the numbers of poor people by half since 2005, the country is still home to one-third of the world’s poor. Income disparities with its burgeoning middle class are huge. The country’s Economic Survey of 2016-17 studied the idea and even presented a model.
Economists say handing out a basic income to the poor would be viable if India phases out the hundreds of existing social welfare subsidies, such as cheap food for the poor, fertilizer subsidies for farmers and a rural jobs guarantee scheme that account for about 12 percent of the budget. Their success in tackling poverty has often been questioned: the subsidy programs are riddled with corruption and leakages.
But many caution that may never happen – the Congress Party has already said it will not end existing subsidies. “This will be an additional burden and can easily aggravate your financial situation,” warned Niranjan Sahoo at the Observer Research Foundation in New Delhi. He said it is very difficult to phase out existing subsidies. “For the simple reason, there will always be a strong vested constituency that would fight tooth and nail that it continues.”
While the debate continues, the key issue as election campaigning reaches fever pitch is: will the poor in India be swayed with the lure of cash in their pockets? Many are cynical, calling it an election promise that will never see the light of day. Others say they do not want a handout but decent work.
“I want to be paid a better wage, around $200 a month. We can work hard,” said Lakshmi Devi, who has a young son and whose husband never holds down a steady job. Lakshmi, who works as a helper in an office earning about $120 is emphatic. “We don’t want doles.”
And gardener Ramanand feels a payout will not solve the challenge of a brighter future for his children. “It can make us happy for some time, but it is also true that we will still be troubled, there will still be sadness inside us.”
