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Bridging The Gap Between India’s Haves And Have-Nots

Universal Basic Income may offer a glimmer of hope.

23/08/2017 11:37 AM IST | Updated 23/08/2017 11:37 AM IST
Parth Sanyal / Reuters

Seventy years since its Independence from colonial rule on 15 August 1947, glaring inequities continue to bedevil India's teeming masses, which happen to make up a third of the world's poor.

The World Bank, in its report "Poverty and Shared Prosperity 2016" estimates that India has more than 2.5 times as many poor—those living below the $1.90-a-day poverty line—as the 86 million in Nigeria, which has the second-largest population of the poor worldwide.

And on 8 August, the 75th anniversary of the launch of Mahatma Gandhi's Quit India movement against the British colonialists, Prime Minister Narendra Modi cited poverty as amongst the greatest challenges before India, alongside corruption, malnutrition and illiteracy, and urged parliamentarians to take a common pledge to free India of these scourges within the next five years. In this regard, he brandished yet another slogan when he said: "In 1942, the clarion call was karenge ya marenge (do or die) — today it is karenge aur kar ke rahenge (do and resolve to get it done)."

There is a deepening slogan fatigue as the nation looks to the litany of official catchphrases to translate into affirmative action.

There is a deepening slogan fatigue as the nation looks to the litany of official catchphrases to translate into affirmative action. Not least among the expectant are the over 195 million of India's 1.32 billion population who are undernourished, comprising a quarter of the hunger-stricken the world over. They stand forgotten even as the country's economy surged 7.6% last year and it had the world's fourth highest number of billionaires—101—after the United States, with 565, China's 319 and Germany's 114.

Fiscal inequity and black money are manifest in the glaring disparities in society. India's "black economy"—economic activities outside formal banking channels—is generated significantly from bribery that is rampant in government. A lot of it is routed through gold, real estate, the film industry, the informal sector and businesses that flourish on cash transactions.

Meanwhile, poverty manifested itself harrowingly when it was recently discovered that destitute inhabitants of the periphery of a tiger reserve in north India were sending their aged family members into the forest as prey in order to claim government compensation by blaming the deaths on tiger attacks. More disturbing was that many of the elders were reportedly voluntarily seeking out the carnivores to help their families out of misery.

With a GDP of $2.11 trillion, India is the seventh largest economy globally, after the US, China, Japan, Germany, UK and France, but it is not a welfare state. The McKinsey Global Institute, the research arm of consultancy McKinsey & Company, calculates that on average, just half of the public money spent in India on basic services actually reaches the people as real benefits. It adds that 56% of the country's population lacked the means to meet the basic needs of food, energy, housing, drinking water, sanitation, health care, education and social security.

The Finance Ministry's Economic Survey 2016-17 has opened a debate on considering a direct stipend to the poor under a Universal Basic Income (UBI) scheme.

Bain & Company's "India Philanthropy Report 2017" projects a financial shortfall of $8.5 trillion if the country were to accomplish its Sustainable Development Goals (SDGs) even by 2030. "It needs significant additional funds, along with systemic changes at the policy and service-delivery levels, to achieve these goals," the report mentions. While the Union Budget for 2017-18 lavished $42 billion on defence, public health was granted $7.5 billion, alongside $12 billion for education, $28 billion for women & children, and $29 billion for agriculture.

These circumstances have engendered the highest tally of non-government organisations (NGOs) in the world—an estimated two million—most of them rendering critical services that the local, state or central government should be delivering. There is one NGO for approximately every 600 people, a startling ratio for a country that has just one doctor for every 1,370 people and one policeman for every 943.

Yet, India also harbours the most expensive residence in the world—worth $1 billion, this 27-storey 48,780 square feet building in Mumbai is home to the wealthiest Indian, Reliance Industries chairman Mukesh Ambani, his wife and three children. With a net worth of $35.2 billion, Ambani is ranked the 19th richest man in the world in the latest Bloomberg Billionaires Index. His home, moreover, is maintained by a staff of 600 and has six underground levels of parking and three helicopter pads.

According to the last census, 62% of Mumbai lives in slums. Yet the city found itself ranked 21st in the City Wealth Index of Knight Frank Wealth Report 2017, ahead of Moscow, Washington and Toronto. Besides, while 17% of urban India lives in informal housing or out in the open, the Wealth Report estimates the country's ultra high net worth individuals— with net assets worth over $30 million—to have increased 290% over the last decade.

A basic income is a form of social security that provides a regular and unconditional income to all inhabitants of a country, whether they work or not.

Indians are reckoned to be the largest depositors in banks abroad, with an estimated $500 billion of illegal money salted away in tax havens. The Central Bureau of Investigation says the country's economy has been blighted immeasurably by this flow of capital to tax havens overseas. Meanwhile, in Palghar district just 110 km to the north of Mumbai, 254 children succumbed to malnutrition in the last one year alone, while 195 additional foetal deaths were registered, caused by malnourished mothers. In India, 44% of children below five are underweight.

Treading a radical approach in dealing with the widespread poverty in the country, the Finance Ministry's Economic Survey 2016-17 has opened a debate on considering a direct stipend to the poor under a Universal Basic Income (UBI) scheme. In analysing the scheme, the government acknowledges the limited success its varied social welfare programmes have had in mitigating poverty, marred as they have been by wastefulness, incompetence and corruption. A basic income is a form of social security that provides a regular and unconditional income to all inhabitants of a country, whether they work or not. And perhaps this is the glimmer of hope, however faint, that we need.

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