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AUGUST 7, 2017

Private power, public apathy

  • Domestic workers are among the most exploited sections of the Indian workforce.
  • The 1931 Census recorded a large pool of labour, i.e. 27 lakh, as domestic workers, or ‘servants’ as they were then known.
  • The 1971 Census recorded only 67,000 domestic workers.
  • However, this trend has been reversed since the early 1990s when India’s economic policy pushed forward with liberalisation.
  • The 1991 Census recorded 10 lakh domestic workers.
  • The NSSO data of 2004-05, for example, has recorded 47 lakh domestic workers in India; the majority of whom, i.e. 30 lakh, were women.
  • As of today, a large number of these workers are inter-State migrant labourers from impoverished districts in West Bengal, Assam and Jharkhand.

The Noida flash point

  • The recent confrontation between this otherwise docile workforce of domestic workers and their wealthy employers in Noida (Uttar Pradesh) brought to light, yet again, the widespread exploitation of domestic workers, and the huge antagonism between their interests and those of their employers.
  • The incident, yet again, exposes the crisis nurtured by the Indian state’s unwillingness to ratify the International Labour Organisation’s Convention 189 on Decent Work for Domestic Workers, and thereby, to modify landmark labour laws so as to bring domestic work under the purview of state regulation.

Seeds of overexploitation

  • Typically, the employer-dominated, domestic work industry is characterised by low, stagnant wage rates. Wages are particularly low for Bengali and Adivasi workers.
  • Many women slaving away at such low wage rates are subsequently compelled to seek employment in more than one house, and to make their teenage daughters pick up similar work.
  • Irregular payment of wages by employers, extraction of more work than agreed upon at the start of employment, and the practice of arbitrarily reducing wages are rampant problems that breed overexploitation of domestic workers.
  • The near absolute authority of the employer, stemming from the lack of state regulation of domestic service, reduces the domestic worker to nothing short of servility.
  • The lack of redressal machinery for workers in this rapidly developing industry is compelling desperate workers to resort to violent forms of agitation, and in such a scenario we may witness the recurrence of Noida-like incidents in the future.

Skill, don’t detain

  • India’s elementary education system may be getting better at providing access to greater numbers of children, but has never really been able to answer the question, what is the measure of its success?
  • If producing curious minds that have had exposure to life skills is the test, the system generally scores poorly, since it primarily emphasises competition, tests and scores.
  • In spite of policy improvements, it has to contend with a significant dropout rate.
  • In 2015, that figure stood at about 5% at the primary level and over 17% at the secondary level, with government schools affected more.
  • So when the Right of Children to Free and Compulsory Education Act became law in 2010, it appeared to be a bulwark against the various ills that prevent continued schooling of all children up to the secondary level.
  • The guarantee of uninterrupted schooling that the Act provides under sections 16 and 30(1) is founded on the no-detention policy until Class 8.
  • This is a protection that should not be trifled with to compensate for the overall failure to improve the school education system, beginning with the neglect of teacher education, bad recruitment policies, and confusion over what the goals of schooling are.
  • The decision of the Union Cabinet to scrap the no-detention policy at the elementary level, and introduce detention of students who fail a designated test in Class 5 or 6, is fraught with the danger of going back to a regime of early dropouts.
  • Such a move can only feed the pool of cheap child labour that has been the notorious record of the school education system, and facilitate the newly liberalised norms of allowing child labour under the guise of family enterprises.
  • Rather than detain a child early through a stigmatising test, a progressive system would open avenues for skills training after the elementary level for those who would prefer that over academic studies.
  • Such a model has served industrial nations such as Germany for decades, raising the standard of living for all, while ensuring economic productivity.
  • The objective is not to relegate academic attainments to a second order priority. On the contrary, the RTE Act has a provision for continuous and comprehensive evaluation, which governments have not found the time to develop scientifically.
  • Raising the quality of classroom teaching, continuous monitoring of teacher attendance and introduction of free vocational and industrial skills training for all those with such an aptitude after elementary schooling should be the priority.
  • Transferring the onus of performance in a narrow testing framework to children, many of whom come from underprivileged backgrounds, can only produce a less literate citizenry. A more open and liberal approach to schooling will have good long-term outcomes.

Let’s talk about a supplemental income

  • The primary objective of UBI(Universal Basic Income) is to enable every citizen to have a certain minimum income. The term ‘universal’ is meant to connote that the minimum or basic income will be provided to everyone irrespective of whatever their current income is.
  • In discussing the applicability of the concept of basic income to India, three questions arise.
  • The first is whether it should be ‘universal’ or ‘restricted’;
  • the second is what the level of minimum income is and how this is to be determined; and
  • the third is about the financing mechanism for implementing such a scheme.

Cash versus services

  • Above all, there is a philosophical question, whether support to vulnerable sections should be in the form of goods and services or as cash.
  • Cash gives the discretion to beneficiaries to spend it any way they like. But it is assumed they would be wise in their discretion.
  • On the other hand, the provision of services or goods directly to beneficiaries may be directed to achieve certain objectives in terms of nutrition or health or education. In the provision of services, the concern is about leakages and quality of service.
  • Some countries have adopted a middle path of conditional transfers, which means that transfers in the form of cash are subject to the condition that they are spent on meeting defined needs.

‘Universal’ or restricted?

  • Coming to the concept of the UBI, it is necessary to first decide whether income supplements should be ‘universal’ or limited to certain easily identifiable groups.
  • Most calculations involving the provision of income to one and all are beyond the capabilities of the present Central government Budget unless the basic income is fixed at too low a level.
  • It is extremely difficult to cut so-called implied subsidies or hidden subsidies in order to fund resources, as some proponents argue. These supports range from subsidised bus fares to subsidised power tariff.
  • The attempt must be to think in terms of reducing the number of beneficiaries using easily definable criteria

Minimum increase

  • The issue whether the scheme should be universal or restricted depends on the level of basic income that is proposed to be provided.
  • If we were to treat the cut-off used to define poverty as the minimum income, then the total fiscal burden would be enormous. This apart, there is no consensus regarding what that cut-off should be.
  • Our analysis using different poverty lines shows that poverty is concentrated around the poverty line.
  • In fact, more than 60% of the total poor lies between 75% of the poverty line and the poverty line. Therefore, what is needed is a supplement to fill the poverty gap.
  • One alternative would be to determine the required income supplement from the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
  • The total annual income supplement can be equivalent to 100 days of the wages prescribed under the MGNREGS. This is equivalent to Rs. 20,000 per year. This amount can be treated as the income supplement.
  • The next question is who the beneficiaries should be.
  • Here again, it is difficult to cover the entire population. Even providing one person per household with this income will mean Rs. 5 lakh crore per annum, which is 3.3% of GDP.
  • Perhaps what is feasible is a scheme which limits the total expenditure to around 1.5 to 2% of GDP, which is between Rs. 2 lakh crore and Rs. 3 lakh crore.
  • We need to evolve a criterion which can restrict the total cost to this amount.
  • One way of doing it will be to limit it to all women above the age of 45. This is an easily identifiable criterion because Aadhaar cards feature the age of the person. Restricting the beneficiaries to the elderly or widows or those with disabilities may have only a limited impact.
  • Making available a minimum of Rs. 20,000 per year for almost 10 crore people — which means a total expenditure of Rs. 2 lakh crore — must make a dent on poverty since at least half of them would be for the poor or people a little above the poverty line.

Financing the scheme

  • The feasibility of raising even Rs. 2 lakh crore is not easy. Some analysts have suggested that we can remove all exemptions in our tax system which would give us enough money
  • Perhaps, out of the Rs. 2 lakh crore which is needed, Rs. 1 lakh crore can come from the phasing out of some of the expenditures while the remainder must come from raising additional revenue.
  • Perhaps, one can phase out the MGNREGS, which will realise close to Rs. 40,000 crore. The employment scheme is very akin to the proposed scheme.
  • Fertilizer subsidies are another item of expenditure which can be eliminated.
  • Perhaps, requesting higher income groups to forego supplemental income will reduce the expenditure, as has been done successfully in the case of cooking gas.
  • To conclude, introducing the UBI is unrealistic. In fact, the concept of a basic income must be turned essentially into a supplemental income.
  • Such a scheme will be feasible provided we restrict the beneficiaries to groups which can be easily identified. This restriction essentially comes from fiscal compulsions.
  • Restricting the fiscal burden to 1.5 to 2% of GDP seems desirable and feasible. Half of this can come from phasing out some of the existing expenditures while the other half can come by raising fresh revenue.