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LATEST NEWS UPDATES | Instead of Withdrawing Food Security, a Minimum Income Guarantee Is Needed -Santosh Mehrotra, Anjana Rajagopalan and Rakesh Ranjan

Instead of Withdrawing Food Security, a Minimum Income Guarantee Is Needed -Santosh Mehrotra, Anjana Rajagopalan and Rakesh Ranjan

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published Published on Dec 6, 2022   modified Modified on Dec 7, 2022

-TheWire.in

A Minimum Income Guarantee would not just cushion exogenous shocks, but would arrest the process of vulnerability begetting vulnerability.

While the worst of the pandemic is behind us, there has been a decline in general purchasing power amidst inflation. The provisional Consumer Food Price Index (combined for rural and urban) for September 2022 is pegged at 8.6%, a huge increase from 0.68% for September 2021.

The latest Periodic Labour Force Survey (PLFS) shows that simultaneously, the urban unemployment rate by Current Weekly Status still remains high at 7.6% (all ages) and is even higher at 18.9% for the youth (15-29 years). One in every five urban youth is unemployed. These factors signal stagnation and jobless growth.

Given the situation, withdrawal of food security after December 2022 could increase the vulnerability of households. Cash-based assistance is required more than ever, and is feasible with the Direct Benefit Transfer system in place. A Minimum Income Guarantee (MIG) would not just cushion exogenous shocks, but would arrest the process of vulnerability begetting vulnerability. We suggest a transfer which keeps fiscal considerations and efficiency in mind. The proposed transfer would be just sufficient to reduce vulnerability, with no danger of a leftward shift of the labour supply curve.

The proposed transfer is an improvement over the existing three cash transfer schemes in India, all targeting landed farmers, the most significant being PM-KISAN. Launched by the Union government in 2019, it assists landholding owner-cultivator families with Rs 6,000 per year. However, the government further relaxed landholding criteria to include big farmers as well.

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TheWire.in, 6 December, 2022, https://thewire.in/economy/instead-of-withdrawing-food-security-a-minimum-income-guarantee-is-needed


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