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OPINION | The Gold Rust: Why Minimum Income Promise and Kisan Dole Stink of Dangerous Statism

OPINION | The Gold Rust: Why Minimum Income Promise and Kisan Dole Stink of Dangerous Statism

It is saddening that in this day and age, the men and women of heightened consciousness in our country remain in love with Leviathan.

Blaming politicians for all the ills afflicting the country is commonplace. Not that it’s wrong; after all, their decisions cost us dear. They often get seduced by bad ideas; and no power, human or divine, can stop a bad idea whose time has come.

But what about the originators and peddlers of sloppy concepts? It is time the role of thought-leaders was scrutinised. The announcement of the “historic programme”, Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), by Finance Minister Piyush Goyal provides us the occasion.

There are many more instances of dangerous ideas. For example, Congress president Rahul Gandhi recently tweeted, “If voted to power in 2019, the Congress is committed to a Minimum Income Guarantee (MIG) for every poor person, to help eradicate poverty & hunger.”

These are perilous concepts for four reasons. First, PM-Kisan and the proposed MIG are morally repugnant: the poor are not and should not be treated as beggars, perpetually in need of charity. They, like most other people, want the environment to be conducive for wealth creation so that they could participate in and benefit from it.

Second, these schemes would hit the exchequer, which is already under severe strain. Consider this: out of every rupee the government spends, as many as 18 paise are paid as interest payments, whereas it receives 19 paise by way of borrowings. In other words, as it is we are moving towards a debt trap.

Unsurprisingly, fiscal targets have been missed. Even critical areas like defence are feeling the pinch. Last year, in his deposition before a parliamentary committee, the Vice Chief of Army Staff had complained about shortages of arms, ammunition, and spares. Now, the Army is unable to get money to pay temporary allowances to officers when they travel for training and leisure.

Third, expansionary fiscal policy may bring down the chances of rate cut. The interim budget, DBS Bank said, limits “the scope of a rate easing cycle”. This will have an adverse effect on the economy.

And, finally, more sections will demand similar doles. Why not similar schemes for other people? After all, maids, plumbers, carpenters, sweepers also are mostly poor.

PM-Kisan, MIG etc. are inspired by Telangana’s flagship Rythu Bandhu scheme. It is said to have reaped a rich electoral harvest for Chief Minister K Chandrashekar Rao in the last Assembly elections. It envisaged Rs 8,000 per acre per year payment to about 5.8 million landowning farmers as farming costs.

But the man who started it all is not a politician; he is former chief economic adviser Arvind Subramanian. In Economic Survey 2016-17, he mooted a universal basic income (UBI). In July last year, he wrote in an article: “Telangana’s Rythu Bandhu policy is an embryonic UBI, or rather embryonic QUBI (a quasi-universal basic income, pronounced Kyoo-Bee).”

However, the arguments presented to justify the existence of UBI are philosophically untenable. “UBI is, first and foremost, a test of a just and non-exploitative society. From Tom Paine to John Rawls, nearly every theory of justice has argued that a society that fails to guarantee a decent minimum income to all citizens will fail the test of justice. It should be evident to anyone that no society can be just or stable if it does not give all members of the society a stake,” Survey 2016-17 said.

But why ignore the more important and impactful tradition, one that is oriented around individual liberty? That of John Locke, Adam Smith and Frederic Bastiat, of Ludwig von Mises, Fredrick Hayek, and Milton Friedman? And of Robert Nozick, whose Anarchy, State, and Utopia practically demolished Rawls’ theory of justice? The tradition is a lived reality in the West, especially the US; it has engendered the freest societies, richest economies, and mightiest nations. All of them have stood for individual freedom, limited government, free market and open society. Those who avoided this tradition suffered such abominations as Communism, Fascism, Nazism and socialism.

Notice UBI’s underlying paternalism and dirigisme: a society can be just or stable only if can “give all members of the society a stake”. Also notice illusionism, for society is not a person responsible for the well-being of all individuals. But when propounded by somebody as important as the chief economic adviser, illusions become real and society transmutes into government.

It is a well-known fact that in India liberalisers have always sold reforms on grounds of efficiency, never as a moral imperative. In a 1996 book, for instance, former Reserve Bank of India governor Bimal Jalan scoffed at the debates on economic theory and ideology. He was happy that “a more efficient and productive economy [after reforms]… is good for the poor” and consistent with “our socialist ideals”. No revulsion for socialism per se, only at its inefficiencies.

Recently, Sanjaya Baru and Meghnad Desai found the Holy Grail in the Bombay Plan, which favoured ‘statism’. Some years ago, Montek Singh Ahluwalia and Nandan Nilekani found that in Aadhaar and direct benefit transfers. Again, no moral imperative.

It is saddening that in this day and age, after mountains of evidence showing the depredations of socialism and statism all over the world, the men and women of heightened consciousness in our country remain in love with Leviathan. Worse, now they seem to have even stopped convincing politicians, not known for brilliance and probity, about good policies; instead they conceive abominations like UBI and PM-Kisan. When gold rusts, what shall iron do?

(Author is a senior journalist. Views are personal)