Moneylife article: Universal Basic Minimum Income
Universal Basic Minimum Income:
Are we
clear about the concept?*
MG Warrier
Article
39 of the Indian Constitution mentions certain principles of policy to be
followed by the State, including providing an adequate means of livelihood for
all citizens, equal pay for equal work for men and women, proper working
conditions, reduction of concentration of wealth and means of production from
the hands of a few, and distribution of community resources to ‘subserve the
common good’, Constitutional objectives of building an egalitarian social order
and establishing a Welfare State by bringing about a social revolution assisted
by the State and have been used to support the nationalization of mineral
resources as well as public utilities. Further, several legislations pertaining
to agrarian reforms and land tenure have been enacted by central and state
governments, in order to ensure equitable distribution of land resources.
Universal basic minimum income
The proposal to accept Universal Basic Income
(UBI) as one of the themes for the forthcoming Economic Survey should be seen
as an effort to pursue further the spirit of the directive principles of state
policy referred to above and re-dedicate budget exercise as a tool for ensuring
distributive justice, which is a responsibility emanating from the constitutional
provisions. Once the debate on UBI picks up, the various components of such a
concept, adequacy of the present levels of minimum wage, the path towards
‘living wage’, the relationship between wage and savings, savings and social
security, wage and healthcare and education expenditure in low income groups
and so on will surface.
So far, discussions on such issues were
isolated or confined to academia or research efforts. For India, once the
political leadership gets convinced about a realistic UBI, resources will not
be a problem. One possibility is, some vested interests will hijack proposal of
UBI to mix it with “unemployment dole”, an unhealthy practice existing in
developed countries. While this should be avoided, care should also be taken to
ensure that where employment assurance schemes are implemented, the
compensations should be realistic.
There are several pockets in India, including many in states
like Kerala, local population has successfully eliminated poverty and come up
with regard to crucial human development indicators. Attribute it to militant
trade unionism or the color of the flags held by parties in power, the credit
for this goes to the insistence by workers for a minimum basic wage.
Hopefully, the concept of Universal Basic Minimum Income, as the debate picks up, will result in healthy deliberations on the need for grassroots level improvements in income distribution to ensure sustainable economic growth. A pragmatic approach to sharing of wealth can reduce several security concerns world over and ensure better living conditions, not only for the deprived class, but for many from the rich and the powerful who feel insecure today.
Hopefully, the concept of Universal Basic Minimum Income, as the debate picks up, will result in healthy deliberations on the need for grassroots level improvements in income distribution to ensure sustainable economic growth. A pragmatic approach to sharing of wealth can reduce several security concerns world over and ensure better living conditions, not only for the deprived class, but for many from the rich and the powerful who feel insecure today.
Writing in The Hindu on September 1, 2016, G
Sampath raised the question, “Do we need a minimum wage law?”. He went on to
explain the concepts of living wage, fair wage and minimum wage and debated the
seriousness with which stakeholders are approaching these concepts. One has to
concede that it is a farce to retain the concept of minimum wage which does not
ensure an income for the worker (who works full-time) which helps him and his
dependents survive with some savings left for the family’s social security
needs. The present levels of minimum wages ranging from Rs1,650 per month
(Puduchery, agriculture) to Rs 9,100 per month (The minimum wage of Rs 350 per
dium for unskilled non-agricultural worker announced by GOI in August 2016), do
not reach anywhere near the cost of 5 components mandated by the 15th Indian
Labour Conference (1957) which were:
i) The wage must support three consumption units
(individuals)
ii) Food requirements of 2,700 calories per day
iii) Clothing requirements of 72 yards per year per
worker’s family
iv) Rent for housing area similar to that provided
under the subsidised housing scheme and
v) Fuel, lighting and miscellaneous items of
expenditure to constitute 20 per cent of the minimum wage.
It may be recalled that the Seventh Pay
Commission had fixed minimum wage for central government employees at Rs
18,000.
Viewed in the above context, GOI will have to
concede at some stage the demand for some reasonable relativity for wages of
the workers in the unorganised sector with the entitlements of workers in the
organised sector having comparable responsibilities. Whenever specific issues
relating to job security and compensation are raised by unions or external
agencies in the context of human development indicators in India showing
uncomfortably low levels in comparison with similarly placed developing
countries, some sporadic initiatives are taken by Centre or state governments.
One such initiative is the introduction of the concept of ‘full-benefit
fixed-term jobs’ in the labour-intensive garment sector by Modi government
recently (See box “Fixed term employment going to become reality” on page 64,
Business Manager, September 2016). But, a comprehensive legislation covering
all aspects of service in the unorganised sector is not yet thought of. To
answer the brief question “Do we need a minimum wage law?”, the answer is in
the affirmative, as we need it to know the extent of aberrations and violations
and for further refinements to think of a ‘living wage’ at the appropriate
time. During 20th Century, we used Railway Time Tables to know
the number of hours by which some trains were running late!
Time is opportune to revisit the prices, wages
and income policy. If we do not do this, labour migration issues within the
country and flight of skills and expertise from India may rise to unmanageable
levels giving rise to several social problems. The revamp of prices, wages and
income policy need to be done quickly and for making the processes transparent
and findings and subsequent action plans acceptable for the stakeholders, there
should be meaningful debates in legislatures and with users of services of
workers.
Strikes like the one on September 2, 2016
should be seen as symptoms of growing labour unrest and should be an ‘eye
opener’ for initiating corrective action. Protests like this should not be evaluated
on the basis of success and failure or losses and gains. Simmering discontent
in the workforce emanating from the feeling that there is exploitation by the
users of services, taking advantage of the helplessness of the workers, affect
productivity and can have long term negative impact on economic growth. Sooner
the governments and corporates amend the present approach, the better for the
country.
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*Submitted version of article published at moneylife.in on November 8, 2016
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