Policy Watch: Why we need to talk about a basic income

Policy Watch: Why we need to talk about a basic income: In 1974, the Canadian government conducted a randomised controlled trial in Winnipeg, Dauphin and rural Manitoba. Lower-income households across the region were randomly allocated into seven...

June 30, 2016
Real wages

This refers to the article “Why we need to talk about a basic income” (The HIndu, June 30). This is a well researched, interesting article on the need for a debate on basic income keeping in view the livelihood needs of those who are not able to inherit assets or earn enough to meet current expenditure and save for periods of unemployment, by getting employed. It is comforting to see that several significant aspects of ‘living wages’ has been touched in this article by someone who can articulate the concerns before GOI and the political leadership responsible for evolving policy on such matters.
At this stage of development, there is a felt need to bring some correlation between the pay, perks and incentives available in the private sector and the comparable public sector organizations and workers in the unorganised sector. The cause for several unethical practices including corruption in India can be traced to the anomalous costs, prices, wages and income structure. 
When the first Indian President’s first month’s salary was fixed at a consolidated amount of Rs10,000/- the underlying thought was a ratio of 1:10 between the lowest and highest remuneration across sectors in the country. At that time, there were not many executives in the private sector also, who were drawing a higher salary than the President.
The argument is not that such a ratio should remain static. But, someone should look at the ethical inconsistency in a small Indian company paying two of its ‘employees’ every year a remuneration of Rs50 crore or above, when hundreds of executives in public and private sector who do much more work get paid much less than two percent of Rs50 crore.
Similarly, income of workers who are taken on contract or hired by ‘service providers’ (another name for contractors!) has to be made commensurate with the work they do and their social security needs should be factored in in their wages. The concept of minimum wage should be revisited in this context.
A realistic prices, wages and income policy will unburden the government budgets to a very great extent.
M G Warrier, Mumbai   


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