Minimum Income Guarantee: Plot to handcuff India

A fortnight ahead of first ballots to be cast, Congress president Rahul Gandhi unveiled script to thrust his party at the centerstage of 2019 Lok Sabha elections. With promise of Rs 12,000 a month for five crore poor, 20 per cent of the total poverty stricken households, Gandhi ushered in a Rs 3.60 lakh crore annual package to blunt the march of BJP's mascot Narendra Modi. In the absence of repackaging of subsidy programmes, currently implemented worth  Rs 7 lakh crore, Gandhi is arguably calling for freezing nearly 40 per cent of India's total annual Budget to stay politically relevant. 

ONLY a few days ago, Congress' poll wizardry in unleashing Priyanka Gandhi Vadra wrapped up her Ganga yatra. Ensconced in a customized boat with necessary comforts, she sought to rekindle the old touch of former Prime Minister Indira Gandhi. But crowd hungry television crews struggled to find thronging mass of people during the course of yatra. The political voyage was scratchy and revealing. The verdict within the Congress was evident, that the magical touch of Priyanka Gandhi Vadra is suspect. 

The Opposition grand alliances in parts of the country have shown contempt for the Congress. Akhilesh Yadav and Mayawati, holding the turf of Uttar Pradesh, found no merit in giving lease of life to the Congress in the state where the grand old party is in prolonged vegetative state. Mamata Banerjee (West Bengal) would not yield an inch to the Congress, which is gasping for breath in the state. The Congress remains a baggage on the back of Lalu Prasad's heirs in Bihar. Regional satraps' shunning Congress robbed the main Opposition party of the political depth to claim the status of a challenger of the ruling BJP.

Former chief economic advisor Arvind Subramanian in the 'Economic Survey (2016-17)' floated the idea of universal basic income. Early this year, he followed his idea with a book -- Of Counsel: The challenges of the Modi-Jaitely economy -- publicly lobbied for political acceptance of the idea of universal basic income (UBI). 

Prime Minister Narendra Modi seemingly has no appetite for doles of universal nature. His statecraft is embedded in targeted welfarism. That he shunned the proposal for a universal farmer income support for small and marginal farmers with an annual cost of Rs 75000 crore is a definitive illustration. So, Modi didn't fall for Subramanian's welfarism prescription, which in some forms are being implemented in China, Germany, Canada, United Kingdom and elsewhere. 

THE Congress has principally been slammed by party sympathisers for failure to come out with a narrative to counter Modi. The Congress stayed the course of Modi the person bashing all five years. Sympathisers were rightly alarmed, for knowing well that Modi thrives on negativism. And, consequently, Rahul Gandhi clutched on the Subramanian straw to stay relevant in the elections.

Union Minister Arun Jaitely has said that the NDA government currently is running subsidy programmes worth Rs 7 lakh crores. The annual Budget size of India is about Rs 24 lakh crore. So, Rahul Gandhi's dole could take the subsidy burden to about Rs 11 lakh crore, accounting for almost 40 per cent of the national resources. That the question on how would additional Rs 3.60 lakh crore be mobilized was left unanswered by Gandhi on expected line. That the inflationary impact and the consequent mortal blows to economy weren't worth shedding light by the Congress leadership was also on predictable line. Answers to details would rob the magic of Congress' political art of revisiting 'Garibi Hatao' slogan.

Former vice chairman of NITI Aayog Arvind Panagaria, the only economist worth mentioning in the Modi dispensation for first three years, has reasoned that universal basic income or its any variant would only mean that there would be no incentive for work. All those earning less than Rs 12,000 a month would find incentivized to stay home. The government will pay for their leisure. Agriculture could be denied farm labour. The informal sector's labour cost could go up punitively. That the Congress is brewing a recipe to make India more lazy arguably isn't an outlandish claim.         

One doesn't need to be an economist to know that there's no scope for India to expand its resources by additional Rs 3.60 lakh crore imminently. That makes it incumbent that the resources being earmarked for infrastructure upgrade -- rail, road and port -- would face the axe. The spiral effect of mortally wounding developmental resources would unleash wave of employment for the educated youth. 

INDIA evidently can ill afford the political expediency of a political outfit scrounging for survival tricks. Economists must come out of their closets to unequivocally condemn Congress' recipe for economic disaster.    

           

Rising spate of unemployment in India: Is Modi riding a tiger

BJP top guns are sweating hard to talk gains of demonetization. Hard-selling his book "I do what I do", Raghuram Rajan has  emerged within a few days a nemesis of the BJP and Prime Minister Narendra Modi. Desperation on the back of mainstream media not believing numbers thrown by government to talk achievements is sinking in fast. In three years, Modi seems high on the steroid administered by achievements on borders with China and Pakistan, but quite fragile on domestic front, with unemployment at its peak.

Anand Mahindra is arguably a straight-talking India Inc man. He is also one of a few Indian industrialists who has been expanding his businesses. But he too is not an industrialist who invests in employment intensive sector. He prefers businesses with light manpower. And, so does most of the Indian industrialists, with vision of just immediate future. Expansion of the industry and the consequent job growth happens when industrialists think long into the future with certainty of growth. 

India undeniably is caught in a time when vision is short -- ultra short.       

"In the special economic zones (SEZs) of Gujarat, most liberal labour laws are in practice backed by

world class infrastructure. yet, I've not seen industrialists taking advantage of facilities to invest in employment intensive industries," first vice-chairman of NITI Aayog Arvind Panagariya told Mahindra in a discussion with an intention to genuinely know why Indian industrialists have aversions about businesses which could trigger employment generation.

Before Mahindra could shed light of his wisdom, a senior officer, betraying a sense of resignation, stated that the ministry of labour had engaged the industry captains and sought to know from them what all changes they wanted so that they could take up businesses with employment generation. She rued that no concrete suggestion came. "We talk of labour regulations impeding on industrial growth. Yet, when asked what all regulations should go, there are no answers from the industry," the officer told Mahindra.

At last Mahindra replied, with an admission that Indian industrialists are only attempting to imitate the outsiders setting up shops in the country. "We are best following others. The foreigners are coming and setting up units in the country. We may be watching them out and follow them in the coming years," Mahindra quipped.

The Economic Survey of 2015-16 pegged unemployment at five per cent, a notch higher than previous year. Subsequently, situations have only worsened. The informal sector accounts for bulk of employment in the country. The construction sector has been the bellwether of employment. They lay battered following demonetization. The result was reflected well in the numbers, as the first quarter gross domestic product (GDP) of 2017-18 slumped to 5.7 per cent. Rating agencies rushed to scale down growth projection to 7 per cent. Growing at 8 or more per cent GDP growth rate is a distant dream for at least a couple of years by all accounts.

So, what happens to employments in a country where 68 per cent of population is in working age group. Number of the working population is on an ascent only. Millions of youth are passing out from schools, colleges and institutes with prospects of job market further squeezing. That they would become employer is looking a crude joke after all the talks of Start Up India, Stand Up India turning out to be all about App and portal makers bottled in Bangalore and Hyderabad.

"We've given 80,000 jobs in various government departments in the last one year. But they youth don't remove their names from the employment exchange till they get the jobs of their choices. That explains why there is not much of change in the job data," the Gujarat chief minister Vijay Rupani reasoned at unemployment rising to quite high level.

The organizational secretary of Swadeshi Jagran Manch (SJM) Kashmiri Lal claims that the Chinese goods coming in the country account for 50 per cent of the Indian manufacturing outputs. "Chinese firms are making a clean profit of Rs 65,000 crore ($9 billion) annually, besides having a Rs 7 lakh crore trade value. If only we can replace them with our domestic manufacturing capacities, the impact on employment could be evident," Lal opined. 

But Lal will not admit that the Indian industrialists long back turned into traders of Chinese goods.

So, what happens to the promise of Prime Minister Narendra Modi at a rally in Agra in 2013 that if the BJP was to be voted to power 10 million jobs would be created. The BJP chief answers that

historical riddle with number-crunching from Mudra scheme. A month back, he had quipped that 7.28 crore Mudra beneficiaries have gained from the loans, which now has surpassed 8.25 crores. They're employers also, the BJP leaders would make others believe. But the Mudra beneficiaries are mostly in the semi-urban and rural areas, yet the economy hasn't got any evident shot of adrenaline for demands.

Yes, the stock market is at a record high. With banking instruments offering only an inflation neutral returns and the property option flattened, surplus money is pouring in strong stream to the Dalal Street.

With employments on freeze, Modi may well be riding a tiger.