This year's Congress manifesto for Lok Sabha had promises which the party leaders have termed "revolutionary". As the election gets set to move into the third phase, many of these promises are now being discussed and analysed with a greater degree of interest.
One of the big promises under the spotlight currently is the Congress plan to roll out a Mahalakshmi scheme providing Rs 1 lakh per year to every poor Indian family as an unconditional cash transfer.
The poor will be identified among the families at the bottom of the income pyramid. The amount will be directly transferred to the bank account of the oldest woman of the household. The scheme will be rolled out in stages and reviewed every year to assess the number of beneficiary families and its impact on alleviating poverty.
Before I discuss the merits of this scheme, let me underline that my support to the INDIA Alliance is based on the existential threat that we face today in this country in the form of a polarising politics of hate and bigotry as well as a slow undermining the values of our Constitution. We need to preserve and protect both the country and its Constitution, which ensures equal treatment to all its citizens.
Having said that, voters also look at the manifestoes of the main political parties. In that sense, the manifesto of the Congress Party deserves serious scrutiny. The above proposal is one that could have a long-term consequence for the welfare of the poorer sections in the country.
I am, however, opposed to any kind of unconditional universal basic income transfer in a poor country like India. The reasons are: (1) Such a scheme doesn't respect the dignity of the poor, and (2) it runs away from the primary obligation of a government in a developing country to ensure access to gainful employment to the poor.
My preference instead is for creating public employment when there is surplus labour in the economy. But, this is not enough, as the working poor are a significant segment of the workers in India. They get less than a recommended national minimum wage necessary for the subsistence of a family. How then can a public employment scheme help address this?
I would suggest revitalising the MG-NREGA Scheme by making it at least 100 days of employment per person instead of per household. This will ensure around 160 days of employment for a family of rural labourers given that the average number of workers in a rural labour household is around 1.6. Currently, the average number of days of employment has been hovering at around 50 days. An addition of 110 days per family will mean Rs 50,160 per year at a national minimum wage of Rs 456 per day.
Besides this, in order to address the problem in the urban areas a National Public Employment Guarantee Schene advocated earlier by many should be initiated. In fact, this has been promised in the current Congress manifesto.
The national minimum wage should be equal to the recommended national minimum wage of Rs 375 per day (in 2017-18 prices) put forward by the Satpathy Committee, whose report was summarily dismissed by the current regime although they had appointed the Commission!
Please remember the enactment of a national minimum wage was one of the key recommendations of the National Commission for Enterprises in the Unorganized Sector constituted by the then Prime Minister Dr Manmohan Singh in 2004. I was a member of this Commission that submitted several reports and a final one in 2009.
According to my estimate of the 2021-22 employment data, 58 percent of the wage workers (regular and casual) in India do not get a wage that is equal to or more than the recommended national minimum wage of Rs 456 per day at 2022 prices. They number around 141 million as of 2021-22.
The third element that I want to highlight is the need for a universal social security scheme of the kind recommended by the The National Commission for Enterprises in the Unorganized Sector in 2007-08. The coverage will be for all workers in the unorganised sector with a minimal contribution.
Here I would like to mention the self-employed workers who constitute around 54 percent of the total workforce in India. Barring a top layer of high-income earners, 90 percent of the self employed are low-wage workers.
They deserve a social security protection because health is their primary capital. Without health, a self employed person will lose his or her capacity to work and hence income. The cost of social insurance may be low to the government in the form of insurance premium; but the benefits it accords to the working poor by covering health/old age/accident and death risks will be quite significant.
If these three proposals i.e. additional public employment, a statutory national minimum wage and social security for all unorganised sector workers are implemented, it will translate itself into more than a Rs 1 lakh per year per poor family scheme.
The current promise of unconditional income transfer of the order of Rs 1 lakh to selected poor households has many drawbacks apart from its element of patronage. The practical difficulties of identifying the eligible poor from the bottom of the pyramid will be a difficult task and could generate tension at the local level. In most government schemes in this country, we have experienced two kinds of erros; one wrong inclusion and wrong exclusion.
Secondly, when money is transferred to the seniormost woman in the family, what is the guarantee that she will spend it on the welfare expenditure of the family. Family dynamics is a complex issue that could leave the weaker members in jeopardy.
For example, a mother-in-law need not necessarily help her daughter-in-law and her kids if there is no bonding between them. Similarly, a husband who doesn’t care about the family could snatch the money away from his wife given the physical and social power men hold in an intensely patriarchal society. Moreover, unconditional cash transfer could generate political patronage leading to all kinds of avoidable disputes and conflicts at the local level.
There are several options for providing livelihood security in addition to the ones enumerated above. Strengthening child care by providing better food and health care through the Anganawadis is one such. As per the National Family Health Survey of 2019-21, the prevalence of anaemia among children below 5 years is as high as 67 percent in the country. Direct provisioning of nutritious food and health care should be seen as a national investment in human capital as well as human development.
Apprenticeship scheme for youth - Doable or just a pipe dream?
The other big announcement was the Apprenticeship scheme for youth.
Every young diploma and degree holder below the age of 25 will have the right to apprenticeships in the private or government sectors. During the one-year apprenticeship, they will be paid Rs 1 lakh (Rs 8,500 monthly) and it will be backed by law, the party claimed in its manifesto.
This is certainly doable. It should though not be restricted to public and private sector industrial enterprises. It could be widened and implemented through the Panchayat Raj Institutions at the local level.
Better educated as well as less educated youth could be deployed as apprentices or interns or under any other name and deployed in child care centres, primary health care centres, panchayat and municipal offices, schools, environmental restoration and protection works for a specified period of time. They may be offered a wage equal to the national minimum wage. This will especially benefit young women given their restricted mobility in taking up employment due to a variety of reasons.
The other promises
Many of the promises in the election manifesto are indeed commendable. There may be scope for fine-tuning them or making them less cumbersome at the stage of implementation. But the real test of the Congress manifesto's ability to attract people will depend on the credibility as well as the seriousness with which the commitment to the manifesto is demonstrated.
During the period 2004-14, a number of pro-people and pro-poor initiatives were made but many suffered in implementation. These schemes included MGNREGA, social security, agricultural development and so on. The rural-urban gap ended up widening and it is time that failing is addressed with all seriousness.
KP Kannan is a development economist and a member of the erstwhile National Commission on Enterprises in the Unorganized Sector.
(Views are personal.)
