Why India’s polity has adopted the logic of Nyay
The Trinamool Congress (TMC) has announced a minimum income scheme for the poorest families of Bengal in its election manifesto for the upcoming state elections, as has the Dravida Munnetra Kazhagam (DMK) in Tamil Nadu. The Congress, in Kerala and Assam, has also talked about a minimum income guarantee scheme, and the Bharatiya Janata Party too has promised a variant of income assistance in its election manifesto.
Political parties of all hues, across states, are embracing the idea of a basic minimum income for citizens. It may be tempting to dismiss this as hollow election propaganda. But it is no coincidence that different parties have all converged on this one core idea. View this along with the other recent nativistic policy announcements by the governments of Haryana and Jharkhand to reserve jobs in their states for local citizens, and there emerges a larger pattern.
“Household income” is perhaps the most critical political, economic and social issue in the country today. The jobs and income situation is staggeringly dismal. In the absence of any other concrete and immediate solution to boost incomes or create new jobs, political parties are seeking to address this issue by providing income assistance to citizens in the form of cash and/or in the form of job reservations.
The idea of a basic minimum income in India has so far been discussed primarily as an economic idea to reform government welfare delivery and make it more efficient in the form of cash transfers. This is a misplaced positioning of the idea.
The notion that no family should fall below a certain minimum income threshold, which can guarantee a life of dignity and respect in society is, foremost, a political-philosophy construct. A basic minimum income is not an efficiency tool for governance to replace in-kind welfare with cash assistance. It is a doctrine for a harmonious society where the gap between the haves and the havenots does not become so enormously large that it threatens to erupt into violence and cause social disorder. Politics is the medium to resolve the contests of such forces and hence, the idea of a basic minimum income in a society should primarily be championed by political leaders.
In India, the idea of a basic minimum income was first articulated to the mass public and championed politically during the 2019 elections, when the then Congress president, Rahul Gandhi, unveiled the Nyuntam Aay Yojana (Nyay) initiative. Under Nyay, the woman head of the poorest 20% of India’s families would get ₹6,000 a month as income assistance for her family directly in her bank account or through some other easily accessible window.
The logic behind the numbers of Nyay was that in today’s India, a family needs a basic minimum income of ₹12,000 a month to lead a life of dignity and respect, which represents the 20th percentile of the household income distribution in India. The poorest one-fifth of India’s households, on average, earn only ₹6,000 a month. Hence, the gap between their average current earnings and what it takes to live a life of dignity is ₹6,000 (₹12,000- ₹6,000) a month. Nyay was envisaged as a federal scheme to be funded by both the Centre and the states and implemented by the states.
A cheeky counter-factual would be that had India elected the Congress in May 2019, and had a functioning Nyay scheme by April 2020, when the pandemic hit, millions of families may not have had to struggle to eat or millions of migrants may not have been desperate to walk back to their homes for food and income. A sudden lack of income was the biggest damage inflicted on families by the lockdown and Nyay would have provided the required safety net.
A Nyay-type programme is perhaps even more critically required in post-Covid-19 times where economic recovery is extremely skewed in favour of the wealthy and exacerbates India’s already large income inequality. The finance minister took great pride in announcing a positive headline Gross Domestic Product (GDP) growth in the October to December 2020 quarter. But, even in the shorter month of February 2021, 28 million families, with absolutely no other source of income, pleaded for work at paltry minimum wages under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
This was the highest demand for MGNREGS work in the last seven months, just when India’s economy was apparently recovering strongly. Clearly, these 28 million families did not experience any of the robustness of the economic recovery that the government waxed eloquent about. A recent report indicated that 75 million more Indians may have slipped back into poverty post-Covid, just when the financial markets have blessed the richest Indians with even greater wealth.
The basic income proposals announced by the various parties may vary in its details from Nyay but the idea is the same. However, in a post-Goods and Services Tax (GST) era, states have very little fiscal autonomy or the money to be able to fund and implement their own income schemes on a large-scale. Hence, any version of an income scheme designed and funded only by the state without assistance from the Centre will be limited in its impact.
The very idea of a minimum basic income is to set an income floor and provide a cushion for people that slip below it. The resurgence in Nyay-type ideas is neither mere populism nor a coincidence. It is a manifestation of the ominous income inequality that threatens to rupture our social disorder.
I recall a meeting in 2019 when Rahul Gandhi told some of us, “Political parties will soon have to address income inequality with a concrete plan such as a minimum income threshold”, which laid the origins for Nyay. Similar to his early warning about Covid-19, his call for a political embrace of a minimum income initiative has proved to be prophetic.