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View: Cash handouts will allow governments to get away with bad governance

The trend has continued: even in in this age govt gives away small amounts and calls it good governance.

TOI Contributor|
Updated: Feb 03, 2019, 02.36 PM IST
By Aakar Patel

The farmer income support announcement and a suppressed government report revealing that the unemployed in India are as many as in Indira Gandhi’s socialist epoch are in fact related. The experts who prepared the jobs report having quit in disgust, the government wheeled out the Niti Aayog to put up a defence. This was essentially an anecdotal response to a statistical analysis and went something like this: “There are all these Uber drivers, Ola drivers and Flipkart delivery boys, aren’t there?” and “how could the numbers of job seekers be at record levels when so much world-smashing growth is being relentlessly delivered by the Narendra Modi government?”

But the fact is that they are. The government’s own data makes it clear. And even if we were to examine it anecdotally, we would not be seeing the dominant and landed peasant castes like the Patidars, the Marathas and the Jats consistently mobilising to demand reservations if good jobs in large numbers were actually being created. They’re not being created. Further, we would not have the Modi government adding another 10% in reservation if quality jobs were accessible. Let us therefore set aside what the Niti Aayog has been sent out to do: the reality is before us. And it is reflected in that cash transfer — a good move but essentially an acceptance of failure — of Rs 6,000 per year to all farm families with smallish landholdings (five acres or less).

The assumption being made here is that what is being demanded by the unemployed and under-employed is subsistence. But this is not the case. The number of destitute and starving in India has been falling for the last three decades. What is being asked for is an access to the middle class as it is known in India.

However, all sides of the political divide are in agreement that this sort of cash transfer is something that the government must do more of. A couple of days before the budget and the revelation about the jobs report, Congress chief Rahul Gandhi spoke of a guaranteed minimum income, presumably also as a cash transfer. And Odisha and Telangana have already transferred to farmers between three and five times what the Modi government has promised, through local schemes. We should expect that there will be more announcements and promises like these — the Prime Minister himself has said this was only a trailer — as the election in May approaches.

These transfers will not change the data on jobs and they will not change the agitations around the country on jobs. However, there will be a specific fallout of the emphasis on transfers. As the debate about the transfers picks up, it will be accompanied by an argument for a smaller state and a reduction in spending elsewhere. European nations have been debating a guaranteed basic income for some time now. But these are also nations that have functional and highly developed systems for providing healthcare and education. The state’s spending on essential infrastructure in these areas has been enormous and consistent. In India, the strongest argument in favour of cash transfers is that the provision of these services is inefficient because of corruption or misgovernance — or that the provision of these services is not the state’s responsibility — and should be taken care of through direct transfers. This is why Modicare from last year’s budget does not address the crisis in primary healthcare but offers insurance where hospitalisation is needed.

This is where the real danger lies. The competitive pressure of handing out cash in relatively small sums (in Switzerland, there was talk of a basic income of Rs 1.8 lakh per month, rejected by the population and by political parties) will build. As the idea becomes popular or is seen as an election-winning one, the squeeze will be put on the public distribution system, and on the delivery of essential services. And this squeeze will not even be properly reported leave alone debated.

It was revealed last year that we have fewer medical colleges affiliated to the Medical Council of India than parliamentary constituencies and only half the number of doctors per capita as the World Health Organisation recommends (we have just 10.2 lakh registered allopathic practitioners across India, and China’s ratio is three times better). The Economic Survey from last year said that India’s pupil-teacher ratio is 23 to 1 — but with excessive regional variance and imbalance — while China’s is 16 to 1. A recent UN study of 71 nations showed that India’s police force was the fifth lowest, with 138 personnel per lakh of population. If any of this is news to you, it is because this is not where the debate is.

There has been a consistent abdication by the state in India of its real and structural responsibilities. This is not recent but it has continued even in this new and improved regime which gives away small amounts of money and calls it good governance.

Aakar Patel is a writer and columnist based in Bangalore. Views here are personal.
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