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LATEST NEWS UPDATES | Why income transfers are not enough -Harsh Mander

Why income transfers are not enough -Harsh Mander

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published Published on Apr 12, 2019   modified Modified on Apr 12, 2019
-The Indian Express

An urban employment guarantee programme is an idea whose time has come.

Temperatures are rapidly warming up in what promises to be a blistering summer of India’s electioneering. Amidst the belligerent grandstanding on national security and the communal messaging barely below the surface, Rahul Gandhi’s announcement of a minimum income guarantee scheme came as a relief, if only because it tried to steer the public discussions to the struggles of India’s poorest people to survive with dignity. It is perhaps telling that even for this, Rahul Gandhi felt compelled to use a military metaphor: Of a surgical strike.

The details of the proposed programme are unclear on many points. A literal interpretation of the announcement is that it will be a monetary top-up, designed to ensure that each family takes home at least Rs 20,000 every month. This seems patently impossible to implement, because it would require accurate estimation of the incomes of every household, which is impossible to do with any kind of objectivity for the large mass of households whose earners are not in formal salaried employment. This is even more difficult for households dependent on casual work, or self-employment in farms or small businesses.

But when the details of the proposed minimum income guarantee scheme were fleshed out by Congress spokespersons, it seemed that the main intention is to identify the country’s poorest households who comprise the bottom 20 per cent of the country’s population, into whose accounts the government, if elected, would transfer Rs 6,000 every month.

There are obvious implementation difficulties with this formulation as well. These relate, most of all, to how the poorest households can be identified with any kind of objectivity and certainty. All poverty lists of governments so far have been ridden with fatal flaws. Even Planning Commission studies have demonstrated that if you are poor, the chances are more that you will not be included in an official list of the poor, than included. The reason for this universal experience of intensely flawed official poverty lists is that there are no objective and verifiable criteria by which the monetary income of a household in the informal sector can be measured. These lists, therefore, inevitably become dependent on the discretion of officials and politicians at the local level. Since the stakes — for inclusion in these lists — are so high, this can easily encourage rent-seeking and power-brokering.

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The Indian Express, 12 April, 2019, https://indianexpress.com/article/opinion/columns/nyay-scheme-rahul-gandhi-poverty-why-income-transfers-are-not-enough-5671399/


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