GS PAPER – 3

MINIMUM INCOME GUARANTEE LAW

Why in News?

• Rajasthan government has stated an intent to enact a Minimum Income Guarantee Law. The law is part of the basket of social security measures.

Importance of Universal Income

• Universal income is not only important for people but equally important for the political parties who want to come to power.
• There is a global consensus on a minimum basic income, be it through state or market. For Example – “Bolsa Familia” in Brazil, and “Oportunidades” in Mexico. In these, families were provided conditional monthly cash transfers to help access education, health and energy resources.

Indian version: MGNREGA

• MGNREGA was enacted in 2005 empowered people through cash for work mechanism. It helped to tackle the insurmountable problem of selecting beneficiaries under a cash transfer programme. As the earlier methods were misused by rural elite and petty bureaucracy.
• MGNREGA provided wage income as a legal entitlement for work done and measured that replaced doles with wages. This helped to combine citizenship rights with development rights.
• It helped citizens to mobilise and assert their rights to plan works, earn a minimum wage and evaluate the outcomes of the programme through social audits.
• The ‘Right To Work’ programme helped address market failures, by improving the bargaining power of MGNREGA workers in the open labour market.

Current Issues

• The current practice only looks at growth rates without examining questions of equality and the constitutional idea of a welfare state. Further the government’s concessions to industry and the private sector, in the name of incentives, are not counted as freebies.
• Different Indian states like Madhya Pradesh, Himachal Pradesh and Karnataka have also implemented cash transfer schemes through different methods.
• There is inability to address authentication errors, inaccessible banking systems and lack of proactive facilitation to the most marginalised sector.

Way Forward

• Governments should put more focus on poverty alleviation and reducing economic vulnerability of the people.
• Minimum Income Guarantee is superior than schemes employing ‘cash transfers’ which were highly misused in the recent times.
• The move by Rajasthan government is going to firmly establish the importance of rights-based welfare policies in its approach towards poverty alleviation. These rights-based welfare policies are in line with the Directive Principles of State policy.
• The benefits of Direct Beneficiary Transfer (DBT) mechanism need to be further examined and compared with alternatives available.
• There is a need to address and rectify authentication errors, make banking systems accessible and move towards proactive facilitation to the under-privileged sections.
• The state agencies need to be made accountable so that delivery systems can respond to people’s need in a rights-based framework. Since officials are responsible to both, their administrative superiors and to the people.
• There is a need for a strong people-centric accountability mechanism where failure is dealt with a given timeframe and in a decentralised manner. This makes accountability mechanism a pre-requisite for the successful implementation of the Minimum Income Guarantee Law.