Home >Opinion >Views >Opinion | NYAY could be a road to hell paved with good intentions

Will and Ariel Durant, in their beautiful little book, The Lessons Of History, note that civilizations decline through the failure of their political or intellectual leaders to meet the challenges of change and the choice they exercise in responding to poverty by “enfeebling the economy with a dole". The question in front of the Indian public is whether the Congress party has had a habit of putting the Indian population on a permanent dependence track, since at least the 1970s, if not earlier. As a friend put it, do the welfare policies of the Congress party act as the “snake" in the game of snakes and ladders for the Indian economy and Indian people?

Officially, only a fifth of the Indian population or an even lower proportion might be below the official poverty line. But, another fifth might be on the verge of falling into it with only one failed monsoon or a single health calamity. So, clearly, the state has an obligation to them.

Further, recent research (Why Poverty Is Like A Disease, Christian Cooper, Nautilus, 20 April 2017, for example), shows that poverty is inherited and perpetuated not just socially and economically, but biologically too. That is how it truly becomes a trap and a vicious circle. Hence, scientific evidence only strengthens the moral case for the state to intervene in support of the poor and against poverty. Also, a market-based economy works only when there is purchasing power in the hands of the people, for it is based on prices and the exchange of goods and services for money. So, the theoretical justification exists for the state to empower its citizens such that they can participate in a market economy. But, is it possible for empowerment to sit on top of decades of enfeeblement perpetuated by doles?

The experts who have opined so far on the wisdom and feasibility of the minimum income guarantee scheme announced by the Congress party have perhaps failed to take into account the Indian context and the history of such policies. Much rides on the optics, especially in the attention-deficient age that we live in. It is one thing to say that “it is feasible as long as you do such and such" and it is another thing to say “it is not feasible unless you answer these questions first". The Congress party needs to respond to the latter.

Yes, the Congress party has to do pilot projects first. It has to evolve a rather robust and rigorous mechanism for identifying genuine beneficiaries using Aadhaar. It has to find resources for doing so. Yes, the scheme cannot be piled on top of existing ones. But, experts seem to have missed an opportunity to serve the nation by raising more fundamental issues about the programme.

An income support scheme can be a tool of empowerment if existing doles are withdrawn. If not, it risks becoming a dole by itself and also an entitlement, just as the previous schemes have become. Notwithstanding the state’s moral obligation to the poor, in the Indian context, the minimum income guarantee scheme is a concession by the state that it won’t be able to provide basic health and education that facilitate the generation of gainful employment for the vast majority of its citizens. If so, should not the state withdraw from the provision of these services and allow the poor, with incomes provided by the scheme, to find the best possible providers of these services?

Alternatively, is the state better off creating economic assets and other infrastructure with the money that the scheme would require to enable the poor to climb out of poverty? Andy Mukherjee writes in a Bloomberg article about Indonesia’s “Dana Desa" programme that empowers villages (Road To Indonesia’s Election Runs Through Isolated Villages, 31 March 2019). Could not the Congress party have come up with schemes that strengthen the third pillar, the village community, with fiscal devolution that would empower them to find local solutions?

An iron law of public policy interventions is that the road to hell is paved with good intentions. The subtext here is not that the poor would squander the cash given to them under the scheme. All the same, responsibilities are an inalienable part of the rights of citizens. Should not the state insist on a certain quid pro quo from beneficiaries in terms of searching for and accepting gainful employment, civic and public behaviour, and in terms of deploying a portion of the money given for long-term purposes? What if the beneficiaries climb out of poverty but continue to claim the benefits, as many higher income folks do today? Should there not be a sunset (finite duration) clause for benefits? Has the Congress party thought of how it would evaluate the success or failure of the scheme in terms of outcomes? What would be the metrics? Can they be observed, measured and documented?

John D. Rockefeller said, “The only thing which is of lasting benefit to a man is that which he does for himself. Money which comes to him without effort on his part is seldom a benefit and often a curse." With its Nyuntam Aay Yojana or NYAY scheme, the Congress party is delivering a curse to millions of Indian families.

These are the author’s personal views.

V. Anantha Nageswaran is dean of IFMR Graduate School of Business (KREA University).

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