Friday, 20 January 2017

Universal Basic Income

Universal  Basic  Income 

[  or ;  Undisputed  Bad  Idea ?  ]
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WHAT IS THE BIGGEST ISSUE BEFORE THE HUMANITY ?

    WORLD-WIDE

Richest 1 % of people world-wide , own more wealth than the rest ( 7 billion )

A mere 8 persons control more than half the World's wealth, in 2016

   IN INDIA

A mere 57 billionaires in India, now have same wealth ( $ 216 Billion ) as that of the
   bottom 70 % of the population ( approx 910 Million people ! )

*  The total Indian wealth in the country is Rs 21,14,100 Crores

*  Of the world's poorest people , 27 % live in India

*  According to Socio-Economic and Caste Census ( SECC ) , released in Dec 2016 :

About 74.5% of rural households the income of the breadwinner is less than Rs.5000 per month. That’s about 13.34 crore households out of total 17.9 crore rural households.

 Another 3.08 crore households or about 17% of the total, had incomes between Rs.5000 and Rs.10,000. Adding these two up gives a shocking picture of rural poverty and deprivation – in some 92% rural households, the highest earner is getting not more than Rs.10,000 per month

*  Some 1.2 Million children ( under 5 ) die each year due to mal-nutrition

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WHAT THREAT DOES IT POSE TO INDIA ?

Given this dismal inequity, unless some very serious - and sincere - effort is undertaken by NDA government to " reduce " the poverty , we can expect a country-wide social unrest and militancy, a thousand times graver than the Naxalite agitation for equity

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WHAT IS INDIA GOVERNMENT RESPONSE TO THIS ?

Income transfer scheme on cards to help address POVERTY ; may be announced in budget

The government is considering an ambitious INCOME TRANSFER scheme that could form the basis of a national SOCIAL SECURITY system

The idea is being discussed as a means of addressing POVERTY and if a decision is reached, it could be announced in the February 1 BUDGET by FM Arun Jaitley .

“There is a thinking... pros and cons of having such a scheme are being examined,“ said a government official.

Providing Rs. 1,500 a month to an estimated 200 million poor will cost the government about Rs. 3 lakh*crore, resources that may be difficult to come by.

The debate is between a widely accessible UNIVERSAL BASIC INCOME that may stretch the social security net too thin and targeting specific groups.

The target group is said to include unemployed people with no source of income.

Some policymakers are confident that Pradhan Mantri Jan Dhan Yojana accounts and the Socio-Economic and Caste Census of 2011 will facilitate a targeted scheme if a universal basic income cannot be provided.

“ My personal view is in favour of targeted instead of universal transfers,“ Niti Aayog vice-chairman Arvind Panagariya told ET in an interview last month.

“With the Socio-Economic and Caste Census, we have a pretty good idea of who the poor are. So we can use the limited fiscal resources more effectively to combat poverty... I lean in favour of a strategy that places a larger volume of cash in the pockets of the poor than the one that gives cash to everyone in smaller amounts.“

{ Source : Economic Times ( 17 Jan 2017 ) report titled :
" Modi Sarkar Dials Social Security Number " }

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WILL THIS APPROACH SOLVE THE PROBLEM ? IF NOT, WHY ?

*    I think the proposed Universal Basic Income scheme will not solve the problem . It
may even worsen the situation by institutionalizing a " DEPENDENCY CULTURE " among the
recipients , who will forever  look up to the " SARKAR MAA BAAP " to feed them !

There is a danger that , in order to continue receiving the monthly DOLE , the recipients
may never make any effort to rise above the POVERTY LINE !

Any amount of money received under UBI Scheme will get spent , and never " Empower /
Equip " the person with " Knowledge / Skills " to earn his own living and rise above
poverty line

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WHAT WOULD BE THE RIGHT APPROACH ?

*  Right approach would be : " Do not give fish to a hungry man / teach him how to fish "

 In short , empower them to earn their own living by teaching them " Skills " and by
 gaining " Experience " in use of those skills

Entire cost of this " Skilling " and " Experiencing " to be borne by the Government , till
 each targeted poor / unemployed person , either gets gainfully employed or becomes
 self-employed

Should he choose to become Self-Employed ( by registering as a " Start Up " ), exempt
 him from paying Personal Income Tax for next 10 years

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HOW TO TRANSLATE THIS " SELF HELP " CONCEPT INTO PRACTICE ?

Divide the implementation in following 3 phases

*    Empowering - 3 years ( Imparting Skills in Industrial Training Institutes )

*    Experiencing - 3 years ( Providing experience in Ind / Commercial Establishments )

*    Self-dependence Phase ( Working in a gainful job or as Self Employed )

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WHAT SKILLS WILL GET PROVIDED IN ITI ?

Entire range of Manufacturing Industry related skills being currently imparted plus a
whole host of commercial skills required by E Commerce / Fintech / Agriculture Processing
 / Payment Banks / Service Sector / BPO / Telecom and other emerging sectors

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HOW SHALL WE MOTIVATE UNEMPLOYED YOUTH TO JOIN ITIs ?

* Each trainee will receive Rs 1000 pm ( for course duration of 3 years )

   This amount will get deposited in Jan Dhan bank account of trainee ( DBT )

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HOW CAN WE GET PRIVATE SECTOR PARTICIPATION IN THIS PHASE ?

*  If a Private firm or individual comes forward to set up such a Training Institute ,

   #  Treat it as an Infrastructure SPV

   #  No questions asked as to the source of funds for setting up such ITI

       {  a kind of Amnesty Scheme to convert Black Money into White Money  }

   #  A government grant of Rs 1,000 pm per trainee to such SPV ( DBT in Bank A/C )

If this is done , expect 10,000 SPVs to come up within one year and 10 million youth to
get  trained each year !

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HOW CAN WE GET INDUSTRIAL AND COMMERCIAL ESTABLISHMENTS TO PROVIDE
EXPERIENCE TO TRAINEES PASSING OUT OF ITIs ?

*  Amend Apprenticeship Act

*  Allow all Industrial and Commercial Establishments to engage ANY NUMBER of
   apprentices ( without upper limit ) , for a period of 3 years

*  Starting stipend = Min of Semi-Skilled wages ( currently , approx Rs 6,000 pm )

*  Annual Increment = 5 %

*  Establishment to pay 75 % of stipend

*  Government to pay 25 % of stipend ( DBT into Jan Dhan account of the Apprentice )

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HOW CAN WE ENSURE A " LEAKAGE PROOF " DISBURSEMENTS OF DBT AMOUNTS ?

*    Through implementation of Mobile based Attendance System , outlined in my blog,

   " From BAD to MAD "  

  { http://myblogepage.blogspot.in/2016/06/from-bad-to-mad.html }


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HOW WILL MY SUGGESTION HELP ?

*  It will solve the problem of poverty organically / permanently

*  It will prevent " Dependency Culture " ( looking up to Sarkar Maa Baap for everything )

*  It will enable poor to retain their " Self Respect / Dignity "

*  The money spent by government will create highly productive " Human Assets "

*  It will overcome the " Skills Shortages " experienced by the Economy

*  It will create gainful " Self Employment " for millions of poor

*  It will make India , a " Low Cost Economy " , able to export its goods and services

*  It will channelize Black Money into a " Nation Building " exercise


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WILL GOVERNMENT IMPLEMENT MY SUGGESTION ?

*  Very unlikely  !

    By handing out freebies and thereby keeping poor " dependent on dole "  forever  ,
    politicians assure themselves of permanent " Vote Banks " !

    If all those currently enjoying " Reservations " ( of umpteen types ) were to become
    " meritorious " and start earning Rs 50,000 per month , they would not care a bit for
    those " Reservations " !

    And if people stop caring for reservations , what " cause " can politicians espouse ?

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Dear  Shri  Narendrabhai Modiji ,


I request you to ponder on my suggestion in light of the following quote of another
Narendra ( Swami Vivekanand ) :


" Education, education, education alone !

Travelling through many cities of Europe and observing in them the comforts and education of even the poor people, there was brought to my mind the state of our own poor people, and I used to shed tears.

What made the difference? Education was the answer I got.

Through education comes faith in one's own Self, and through faith in one's own Self the inherent Brahman is waking up in them.[Source] "

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21  January  2017

www.hemenparekh.in / blogs

    




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