Hyderabad: Over the last seven decades, India has emerged as the third largest economy in purchasing power parity terms, growing at about 7 per cent. India’s economy has been one of the largest contributors to global growth, accounting for about 10 per cent of the world’s increase in economic activity.
However, the nation is home to 45 per cent of the ‘deprived’, a term used by the United Nations Development Programme for the unfortunates who suffer from ‘multi-dimensional poverty’.
Half a billion people have neither participated in the ‘Indian growth story’, nor hope to, in the near future. They continue to ‘stand and wait’ outside the ‘inclusive’ purview, says, Crux Management Services President Vikas Singh, while speaking on ‘Universal Basic Income (UBI)’ at TEDx held in Hyderabad.
He adds, “Our Human Development rank at 131 tells a grim story but is an accurate indicator. At the current rate of development, we will take another 20 years to be in China’s neighbourhood.”
“Are we growing adequately is not the debate. The debate should be is India’s growth inclusive?” he questions.
The lopsided growth has left 92 per cent of the Indian population at the base of the wealth pyramid. An analysis of the data of the last 50 years points to the fact that increases in income inequality reduces GDP per capita.
The policymakers should be especially concerned about the social cost of inequality, which is irreparable. Inequality creeps into the next generation too, providing fewer opportunities, Singh points out.
Poverty takes a huge toll on productivity and therefore the entire economy pays for itself many times over. That’s the big-picture math. India has over 1000 ‘schemes’ for the poor, ‘spending’ over 6 per cent of the GDP. A back of the envelope calculation indicates that paying the poorest households annually, a basic income of Rs 1,00,000, lower than the poverty threshold, will cost about 7 per cent of the GDP and match the ‘welfare investments’.
The UBI will support the social goal of inclusion and help in providing a life of dignity to over 65 per cent of the Indians, excluded and abandoned. It would benefit the poor. Poorer still would get a windfall. Most others’ income will swell. The social and political benefit will be much more. It will help build an ecosystem by enabling the poor to march out of the ‘low reform- low income’ trap.