Indian commentators are debating whether the next government should introduce a minimum income guarantee, as the world’s largest democracy with 1.4 billion people gears up for parliamentary elections starting on April 11 and lasting six weeks.
Rahul Gandhi, leader of the opposition Indian National Congress party, announced in January plans to introduce a policy that he believes would “help eradicate poverty and hunger.” This week, he announced further details about what could be the largest variant on basic income ever implemented: 72,000 rupees ($1,040) per year for the poorest 20 percent of families, around 250 million people, a scheme expected to cost $52 billion. The policy is called “Nyay,” the Hindi word for justice. The Times of India claims the policy will cost 1.88 percent of the gross domestic product.
Although it’s not a true universal basic income, the idea’s proposal on the campaign trail could prove a key moment for the movement. Its proponents argue that basic income can make people healthier and happier, as evidenced by results from experiments in Ontario and Finland. Campaigners argue that this security could prove vital with the rise of automation taking over jobs.
India, which suffers from large-scale wealth inequality, could prove a major beneficiary of a basic income scheme. An Oxfam report released in January claimed that in 2017, the top one percent richest in India claimed 73 percent of the income generated over that year. United Nations data shows that poverty is improving as the economy grows, dropping from 45 percent of the population below the poverty line in 1994, but at 22 percent in 2012 there is still progress to be made. Figures from the Center for Global Development placed the number of people living on less than $1.25 per day in 2011 at around 100 million people.
Gandhi’s election promise, however, has attracted mixed opinions. Ram Madhav, national general secretary of the Bharatiya Janata Party, the party of current prime minister Narendra Modi, derided the idea as promising the moon:
However, Modi advisor Arvind Subramanian previously stated in a 2017 report that spending around 200 rupees ($2.79) per person per month, or two percent of the gross domestic product, could cut extreme poverty by 15 percentage points.
Others were more scathing. In an article for News18, a news outlet with a partnership with CNN International, writer Ravi Shanker Kapoor argued that the scheme would be “fiscally deleterious, economically ruinous and morally reprehensible.” Kapoor noted that finances are already tight as the fiscal deficit in 2018-19 reached 3.4 percent, 0.1 percent higher than targets. He went on to dismiss Gandhi’s policy and others like it as they “make serfs out of free individuals, making them perpetually look askance at the gigantic feudal lord called the Indian state.”
The Times of India, the country’s largest English language newspaper, took a more cautious stance in its editorial. It examines the policy from three angles: previous means-tested benefits have proven hard to administer, it’s unclear whether the guarantee replaces existing benefits that are in need of reform, and it’s a poor substitute for economic policy that encourages job growth. The editorial concludes by stating that “when Rahul’s announcement is juxtaposed against these three aspects, it falls painfully short of being a game changer for society.”
Sarath Davala, vice-chair of Basic Income Earth Network, wrote in an editorial for India’s second-largest business newspaper Mint that the scheme “can transform lives.” While most proponents argue that the income should be universal to reduce government bureaucracy and improve access, Davala argues that “some kind of targeting is inevitable as a starting point.” The editorial ends by calling for a pilot scheme in select areas of the country before a wider rollout.
At the time of writing, Gandhi’s chances of implementing his policy look slim. A Times Now opinion poll this month projected Modi’s National Democratic Alliance winning 283 seats in the 543-seat Lok Sabha lower house of the Indian parliament, an overall majority. The United Progressive Alliance, of which Gandhi’s Indian National Congress is the largest member, is projected to win just 135 seats.
The proposal may have already shaped the conversation in a positive direction. Finland’s pilot project was only a small-scale test of the idea for 2,000 people over two years, but provided valuable data around how it altered trust in politicians and brought health benefits. Scrutiny of Gandhi’s proposal could spark more ideas about how to implement a policy on a wider scale.
It’s a global conversation that could bring in more participants soon, as Andrew Yang is running in the 2020 election for the American presidency on a plan to bring basic income to the country.