The Time for a Minimum Income Guarantee in India Has Come

After some vague initial murmurs, the Congress party has finally announced a minimum income guarantee as part of its 2019 election manifesto.

With the eye-roll worthy acronym of NYAY, it has already led to a predictably polarising response. An Economic Times editorial neatly encapsulates the responses by describing it as “between promising the moon and simply loony”.

The fact of the matter is that NYAY does not promise the moon, unless a family income of Rs 12,000 per month in contemporary India is considered such. We are talking about giving a top-up income of a maximum of Rs 6000 per month to identified families – not to exceed 20% of the population – which is the very least a state with extremes of poverty like India should be aiming for.

Nor is NYAY anywhere near ‘loony’. Rather, it is very much in keeping with trends in the global South of moving towards cash transfers in order to ensure a basic income for all citizens. Arguably, such a state-sponsored system of ensuring a base level of human existence has existed for much longer in Europe, with even the United Kingdom holding onto its system of benefits.

In his recent book, Give a Man a Fish, the anthropologist James Ferguson considers the move towards basic incomes and cash transfers, particularly in the African context. Many of his arguments hold salience for India, especially if the Congress were to be able to form a government after May 23, 2019. Even if the Congress’ vision of NYAY doesn’t happen immediately, there is no doubting the clamour for minimum incomes is growing louder and it is – irrespective of the political party/coalition that forms the government next month – an idea whose time has finally come in India.

Ferguson’s book poses a question that has been puzzling many commentators, academics, and development analysts. The question is: how is it that social protection and neoliberalism are increasing at one and the same time? In other words, in an era when the free market is on the ascendant and neoliberal thought is firmly entrenched, why has there been a simultaneous expansion in state policies that enjoin a greater amount of spending on welfare functions? Neoliberalism is, after all, widely associated with a rolling-back or downsizing of the welfare state.  But what we are witnessing in many states of the global South that are neoliberal/neoliberalising, is not less but greater levels of social assistance.

Furthermore, these policies are not comprised of the type that can be easily tarred with the neoliberal brush such as microfinance or microcredit. Rather, the really astonishing new measure is that of cash transfers. This is a policy of just giving money to the poor. Furthermore, this cash is being handed over to “able-bodied” men – the traditional worker/producer figure – and not just to those categories that had been previously deemed “vulnerable” such as the old and infirm or single mothers.

A new welfare state in the Global South?

The title of Ferguson’s book is a reflection on the popular developmental slogan: “Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime.”

This commonplace saying exemplifies a central desire of welfarism, of getting men – problematically, it is oftentimes men – off any form of dependency such as aid or charity by converting them into active, fulsome producers. Ferguson contends that this oft-used slogan – with the centrality it accords to the production process and the concomitant creation of employment – holds increasingly limited pertinence. High levels of unemployment and a generalised despair over finding jobs are striking features of the contemporary. If employment is not or cannot be the goal to strive for ,then what alternative paths lie ahead?

Also read: As BJP, Congress Race to Promise the Earth to the Poor, Who Will Foot the Bill?

Before our very eyes, claims Ferguson, the classic patriarchal figure of the man of the “give a man a fish…” slogan is being reconfigured as deserving of state assistance. He is to be handed cash not in return for labour expended but just by virtue of being a member of society; as his rightful share and not as a loan or charity.

This move would have been unthinkable not so long back, given a widely-held distaste both for “just giving” and for cash/money that is seen as a substance that can breed idleness, dependency, alcoholism, and other assorted moral and social ills. It is nothing short of remarkable, then, that such a move is widely supported by states ranging from Brazil to Namibia and organisations such as the World Bank as well as prominent intellectuals, development practitioners, and political commentators. This leads Ferguson to herald the arrival of a new kind of a welfare state. Arguably, this is the same form of a welfare state that the Congress is envisioning in its manifesto, particularly in the minimum income guarantee programme announced on March 25.

Politics of distribution, not production

The defining feature of the new welfare state is that it is not centred upon creating greater employment. Rather it is one which is more concerned with crafting new and more efficient distributive measures. In so doing, the new welfare states of the global South are responding to the reality that the demand for labour or skilled workers is vanishing. Ferguson argues that this is particularly true for places such as South Africa. This is also what we are seeing in India, with rising unemployment and the presence of an enormous labour pool for which the kinds of jobs that are considered “productive” just cannot be provided.

One of Modi’s biggest failures has been this incapacity to create new jobs and increase employment, especially given the loud rhetoric he and his party had created around it prior to their electoral victory in 2014. The Congress is obviously alive to this major failing of the BJP. It has to come up with some measure that can concretely address the lack of jobs.

Secondly and relatedly, Ferguson notes that waged work is not the means through which most people in Africa obtain their livelihoods. Vast numbers of the poor in southern Africa are managing to survive through what he terms “improvisation in conditions of adversity”. This “survivalist improvisation” is achieved by accessing or making claims on others’ resources – through the cultivation of relations of dependence.

Ferguson is careful to point out that reliance on forms of redistribution should not be seen as yet another instance of African “backwardness”. It is, in fact, a global phenomenon as evidenced, for instance, by the official statistics of the United States where only 60.7 % of the population is to be found in employment; even in the classic “breadwinner” category of men aged 25-54, one out of five men remain out of employment. The rest are just managing to, somehow, get by.

“Copycat schemes”

The new welfare state that we are seeing across the global South is thus a pragmatic response to the twin contemporary features of massive unemployment and overproduction. Finding newer and more efficient means of distribution is the need of the hour. Enter cash transfers and the demands for basic incomes/sustenance that are in evidence in many parts of the global South from basic income grants (BIG) in Namibia to ‘basic rent’ in Brazil.

Also read: The Promise of UBI, Minimum Income Guarantee Is a Paradigm Shift in Economic Policy

The new politics of welfare is centred not on greater production, but on newer forms of distribution. Indeed, the minimum income guarantee that the Congress is setting out is not, then, such a radical departure from policy measures made by other states such as South Africa, Brazil, Nigeria, Argentina, Chile, and Malawi. Rather, it appears to be very much in keeping with global trends.

There are still no universal and firm conclusions that the literature on cash transfers and minimum incomes is showing us from across Africa and South America, though by and large the analyses tend to be positive and hopeful. The overall signals appear to be that this is a welfare experiment worth considering, but it has to be done with care and with an eye to the specifics of each country/region under consideration.

Potential pitfalls of NYAY

Even though the minimum income guarantee programme is merely at the manifesto stage at this point, we should exercise caution before we start celebrating it as a victory for India’s beleaguered developmental state. While we can be cautiously optimistic about its progressive potential, there are at least two serious concerns worth voicing.  

The first is the fear, not entirely unsupported by certain signals as well as what has been happening in India over the past five years, that cash transfers to the poor will allow the state to roll back its other welfare functions such as access to subsidised or free health and education.

There is a particular fear that a minimum income guarantee could accomplish a dismantling of India’s long-standing public distribution system (PDS) that has provided subsidised food and grains to the poor. We are aware of the systematic undermining of MGNREGA in the recent past. There is already talk from the Congress of “rationalisation” of expenditure, that could end up cutting back on other functions of India’s welfare state. The near-hysteria on the projected costs of the proposed minimum income guarantee and the tut-tutting about “fiscal discipline” could end up leading to cuts in other welfare activities.

In short, instead of an expanded welfare state – which India desperately needs – we could end up with an even more trimmed back one, even as the government could gesture to the minimum income as an act of radical generosity.

Secondly, the minimum income guarantee could also come to be locked into a tight embrace with Aadhar. Speaking from an implementation perspective there is, in fact, no necessity for NYAY to be wedded to Aadhaar. The targeting and identification of potential beneficiaries can happen through other means in a more effective manner. However, there is a danger that this marriage of convenience might take place, not because there is a real need for it but rather because these two measures often go hand-in-hand; cash transfer programmes around the world often do end up being routed through biometric IDs.

There are several problems with Aadhaar including its unconstitutionality; the threats to privacy and danger of state surveillance it poses; and potential for misuse by an assortment of actors. To my mind, Aadhaar is particularly problematic in the context of welfare initiatives due to the profound techno-utopianism it carries with itself – the belief that a new technology can fix all implementation problems and lead to transparent governance of the complex state that is India.

Finally, not only is there no real evidence that Aadhaar works better than, say, a ration card or a BPL card, there is also the fact that the forms of exclusions this ID can – and has – led to are staggering in scale and nothing short of criminal in their consequences. Once again, there has not been a direct linking of NYAY and Aadhar quite yet in the early manifesto announcement, but it is critical that this automatic marriage of the two is not assumed or presented as a fait accompli.

Ultimately, the talk of a minimum income guarantee is a welcome return to substantive issues of policy and the question of what kind of a country India can imagine itself becoming. In lieu of tedious Twitter games of chowkidar-chor, familiar allegations of corruption/dynasty, or the hatred inherent in cow-politics, we finally have a pronouncement that can restore some faith in a politics that might, just might, be genuinely about distributive justice.

Nayanika Mathur is Associate Professor in the Anthropology of South Asia at the University of Oxford. She is the author of Paper Tiger: Law, Bureaucracy, and the Developmental State in Himalayan India (Cambridge University Press, 2016)