If implemented well, Dalit Bandhu will drive a structural shift in the economy, and enhance the lives of poor young people
Chief Minister K Chandrashekhar Rao has come up with a scheme to provide Rs 10 lakh to an estimated 6 lakh poor Dalits with an investment of Rs 1,20,000 crore. Conceived, planned and implemented well, Dalit Bandhu can change their lives and livelihoods and transform the dynamics. Delivered as a dole, it will defeat the scope and ambition of the Chief Minister. The scheme is unique for the following reasons:
•Shifts decision making power from government to household and on a sizeable amount of resources. Recognises that each poor household is poor in its own way with varying priorities, capacity and factor endowments
•Gives confidence, autonomy and empowers people to make their own choices, based on individual capacity and priorities and participate as active members in the mainstream economy with growth dividends
•Will unleash the aspirations of Dalits and make them think beyond basic existential needs
•Help in wealth creation and asset building and thus lead to autonomous dignified livelihoods with sustainable incomes and the tapping of economic growth opportunities
•Will enhance the self-image and status of Dalits in the wider community
•Can be easily extended to all poor, regardless of caste, creed or religion.
Denial of Incomes: Historically agriculture and related activities were the main sources of income. With industrialisation, wealth generation shifted to business. This has dramatically changed. Today, most wealth is with tech and financial services. We see a sharply rising and unfair pattern of terms of trade between the three sectors of the economy. Agriculture and manufacture are defeated players in the economy. At best, they may address some basic needs of the poor and postpone social strife while they worsen inequities in the economic and social pyramid. The poor are further deprived of the opportunity to become creative and competitive entrepreneurs. The proposal of the Chief Minister, if planned and implemented well, can correct societal imbalances with the attendant vulnerabilities and exploitations that emerge from the deprivations of Dalits in their occupations and professions.
Drivers of Wealth: The stock market capitalisation value today is Rs 240 lakh crore and is rising. Between the first and second Covid waves, stock valuation doubled. Sensex was 720 when the 1991 reforms began and is around 52,950 today, or over 73 times. Stock values doubled every five years and this period is getting shorter. If we add “not listed in the stock exchange or traded” public sector companies, capitalisation will be many times more. Gold and land prices have boomed. So, “follow the money” and explore the fields of opportunity and for wealth generation.
Owners of Assets: Natural resources are owned by the government on behalf of the people. Efforts are on to monetise land, forests, water while natural gas, petroleum, mines, minerals and air spectrum are auctioned. Deemed as sick, public enterprises and assets are sold, diluted and privatised. Although some are loss-making, their assets are high in value and have risen sharply over the years. A study by the Centre for Governance and Accountability estimates the value of all the above at Rs 40 lakh per capita. These rich natural resources are the wealth that belongs to the people but is being cornered by crony capitalists.
Funding: The source to fund this scheme is neither sustainable nor reliable if one is dependent on government revenues. We must look to new ways of funding. In the 1970s, to offer succour to people hit by repeated drought, the Gandhian, VS Page, wanted a Maharashtra Employment Guarantee Scheme. He realised that neither the State nor Central governments could fund the scheme, so he introduced octroi and professional tax from Mumbai to raise money on a continuous basis. The funds so raised were kept in public trust with no involvement or dependence on the government. We need a similar way.
Autonomy: Telangana must form an asset stock platform (on the lines of social stock exchange) with its capital formation of holding a percentage of public assets (that of government and public sector) of land, water, mineral wealth and natural resources. Mining royalties should be converted as equity stock in the company. A back-of-the-envelope calculation of 25% of such assets shows Telangana can easily raise many times more money and cover all its citizens. For instance, the recent sale of land in Hitec City in Hyderabad (50 acres) fetched Rs 2,000 crore. With such a capital, the platform will give sovereign guarantee paper in the form of collateral for Rs 10 lakh. Using the collateral, the actual money is provided by banks or lending agencies based on business proposal, is professionally examined and released in a graded manner.
Professional Services: An autonomous platform gives confidence to households. Otherwise, they will rush to withdraw the money, unsure of the scheme availability under government or political exigencies. The task and ambition of the platform are to ensure that the assets stay with it and accumulate and are available to households when the business fails or to avail in times of exigencies. The household bequeaths this asset to the next generation. To help the household in a judicious search of livelihood and income opportunity and prepare the proposals to financing agency, we can enlist multiple social organisations with business acumen and repute. These will train Dalits and build their capacities in business. They will be tasked to handhold and provide the roadmap for a spiralling income and wealth.
Sustainable Livelihoods: The scheme must aim to foster investments in business with a small portion allowed for immediate needs or consumer goods. Next, we must set aside Rs 2 lakh to serve as incentives for: return the money to the bank, save and earn interest, scale the business, etc. The eligible basket of investments will include business enterprises, SME and MSME expansion, agro-market value chain, farm development, diversification and productivity, getting people out of high rent-seeking (auto or cab drivers) or high-interest loans, EMI for housing, higher education for children and tertiary healthcare. The list is not comprehensive and calls for detailed consultations with community leaders, bankers, business professionals and civil society.
There will be no selling of precious public assets, no new taxes or cuts in development and social welfare spends. Instead of big money cornering all our natural resources, if done well, this scheme will prove truly transformative. It will drive a structural shift in the economy, enhance the confidence of poor young people in improving their quality of life and unleash their creative energy and ingenuity. The scheme is trusteeship centred on people with platform stocks that grow in value and dividends that rise in tandem with the mainstream stock market.
(The author is with Centre for Environment Concerns, Hyderabad)
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