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Minimum income guarantee: Who for?

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A few days back Rahul Gandhi unleashed the Brahmastra from his quiver. MIG for 20% of the poorest of the country. They shall get a minimum income of ₹ 12000 pm, supported by the government. Sounds like the panacea that Indian poor have been waiting for for ages.

Now, who are the Indian poor. By setting an income of ₹ 144000 PA (or ~ $ 2000) as the base, it will put around 67% of Indians in this bracket. India’s per Capita PPP income being $ 5350 while nominal being ~ $1670 (2018). So in effect it is not 25 Cr Indians but closer to 100 Cr who should be getting this.

Of these, 20% or 20 Cr (as per INC 25 Cr) will get this support. Great. I will not talk of the detrimental effect on the economy, which is quite understood. My query is how are these being determined? Is there sufficient income data or proof that can effectively weed out ineligibles? Afraid not. A large section of people still get paid in cash. Drivers, house-hold workers, contract labour in industry and myriad others. Now, imagine these people, who are actually earning “X” amount declare no income, how will it be validated? Unlikely. So they shall start to get the ₹12000 (as 0 income people).

This will incentivize others as well to follow the same route. More people will transact in cash and will go below the radar. It will create a massive business for officials and touts who will help people with the right documents for a price. Whatever efforts have been taken to reduce the black economy, will be gone. Only this time this will be generated by the poor, not the rich. This will a new social revolution, first time ever in the world.

What is the criteria of a household? An adult son/daughter living separately is one household or multiple? Again this will incentivize people to separate, if only on the documents, for a price. So a household with 2 adult children can manage 36,000 per month with some help.

Economist and one of the proponents of the scheme, Abhijit Banerjee mentioned that Cong has been discussing it since 2009. Is that why it was opposed to the triple talaq? No one gets financially hurt, as the women too get a support payment.

What I am trying to convey is how easy it is to game the system by the rest of the 80 Cr who are ineligible to deny the 20% for whom this is targeted. Coupled with Congress’s track record of gross mismanagement, we might see a completely different program than the one envisaged at this stage.

That it will create a thoroughly dishonest and corrupt society is indisputable. It has the potential to create a generation of Indians who have no faith in themselves. Who will believe that it is better to remain unemployed without being deprived. Is that how the Congress will solve the omnipresent question: “Where are the jobs?”. The answer is, “You don’t need one.”

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