Universal Basic Income

There are media reports about NaMo government planning to introduce a universal basic income scheme before the Lok Sabha election due in next 90 days. [see- https://www.indiatoday.in/india/story/universal-basic-income-modi-government-1418711-2018-12-28 and https://economictimes.indiatimes.com/news/politics-and-nation/doling-out-a-universal-basic-income-scheme-may-be-narendra-modis-best-chance-to-win-2019-mandate/articleshow/67236374.cms]. Rahul Gandhi has tried to pre-empt the same and clinch the first mover advantage by promising something on similar lines, called the “minimum income guarantee,” if voted to power [see- https://www.news18.com/news/india/rahul-gandhis-minimum-income-guarantee-vs-narendra-modis-universal-basic-income-what-it-means-for-you-2016963.html ] 

Sikkim is the smallest state in India.  Its ruling party has announced an ambitious plan to implement a universal basic income for every one of its 610,577 citizens by 2022. [see- https://www.ndtv.com/india-news/tiny-indian-state-sikkim-runs-biggest-assured-income-experiment-foreign-media-1980444 and https://futurism.com/india-launching-largest-basic-income-experiment ]

Opinion against the UBI scheme or words of caution have also started flowing in. [see- https://www.livemint.com/opinion/columns/opinion-universal-basic-income-scheme-may-not-be-right-for-india-story-1548005316639.html]

UBI proposes that governments tax the billionaires and corporations and use the money to provide every person with a generous stipend covering his or her basic needs. This will cushion the poor against lack of jobs or loss of employment and economic dislocation, while protecting the rich from the populist rage. It is debatable whether it is better to provide people with universal basic income (the capitalist paradise) or universal basic services (the communist paradise).

India has experimented with subsiding healthcare, education, transport and so forth. The system leaked, the quality of service delivered continued to spiral down and not everyone got access.  By giving money to people, who then shop around for whatever they want, how do we know that they would be responsible shoppers for fulfilling their basic needs?

Further, the money they spend would travel back to the same coffers of those very billionaires and corporations from whom it came to the government, because only they would be the providers of fulfillment of basic needs. The real purpose of UBI capitalism is to extract value from the economy and deliver it to those at the top.

The plan is no gift to the masses, but a tool for our further enslavement. UBI really just turns us from stakeholders or even citizens to mere consumers.

In the quest for choosing a utopian vision for the country, no matter which paradise the politicians want to create, no one knows the meaning of ‘universal’ and ‘basic.’

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Take a Pause ! Think !!

Profitability of business is associated with the efficiency of deployment of an input-mix comprising of - Machines, Manpower, Materials, Methods, and Money.  The era of increasing the component of Manpower in this heady mix is long gone and the emphasis has been on reducing the Manpower to a LEAN extent possible. Technology (Methods) makes labour a commodity-input that can be contracted as easily as any other. The shifts from outsourcing to ‘Uber’isation have been largely driven by the corporate imperative to create shareholder value, and under our current conditions, creating shareholder value and creating good jobs are largely incompatible. Corporations are “job creators” only as a last resort.

Out there is a sea of humanity, which more than anything in the world, wants a regular job with a wage. Jobs provide income, inclusion, confidence, comfort, security, a meaning to life and are a source of engagement that keeps people busy. Good jobs are essential to the good life. Yet good jobs are a minority and India needs lots of them.

Jobs and wages have to be at the heart of all economic growth. Growth without increase in jobs could trigger the rise of anti-nationalism, populism, crime, fanaticism or civil-unrest. Neither a Socialist nor a Capitalist approach to economic management can overcome the threats and consequences of job-less growth.

Technology is not destiny; nor is globalisation. Their direction is not random but shaped by decisions made by firms, governments and individuals. In other words, there is a choice, and it is up to leaders of governments, corporations and civil institutions to shape it in ways that will benefit ordinary citizens as well as themselves – or, as we have seen, ordinary citizens will do it for them.

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Focussing on CSR whose Sense is Flawed

The Companies Act 2013 brought focus on Corporate Social Responsibility (CSR) using the logic - Companies take resources in the form of raw materials, human resources etc from the society. By performing the task of CSR activities, the companies are giving something back to the society.

The term CSR has been defined under the Companies (Corporate Social Responsibility Policy) Rules, 2014 that came into effect from 1 April 2014, which includes but is not limited to:

·         Projects or programs relating to activities specified in the Schedule; or

·         Projects or programs relating to activities undertaken by the Board in pursuance of recommendations of the CSR Committee as per the declared CSR policy subject to the condition that such policy covers subjects enumerated in the Schedule.

The activities that can be done by the company to achieve its CSR obligations include eradicating extreme hunger and poverty, promotion of education, promoting gender equality and empowering women, reducing child mortality and improving maternal health, combating human immunodeficiency virus, acquired, immune deficiency syndrome, malaria and other diseases, ensuring environmental sustainability, employment enhancing vocational skills, social business projects, contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women and such other matters as may be prescribed.

An objective analysis of the above shows that the government has attempted to transfer part of its developmental responsibility to the corporate sector; surreptitiously levied an additional corporation tax in the garb of mandatory CSR expenditure; and is simultaneously subsidising such expenditure through making CSR expenses tax deductible.

Government has no control over such haphazard expenditure of CSR funds. A parliamentary question (Lok Sabha Starred Q 373; 11 Aug 2017) proves the point.

PETER DRUCKER had explained CSR thus:

The proper social responsibility of business is to tame the dragon, that is, to turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth.

CSR was thus social entrepreneurship which the great Indian polity and bureaucracy have reduced to obligatory expenditure. For business, it is turning out to be just another tax and cost of doing business in India.

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