Context: Rajasthan government tabled Minimum Guaranteed Income Bill, 2023 to cover the entire adult population of the state with guaranteed wages or pension.
Major Provisions of the Bill:
- Minimum guaranteed income: It will ensure that each adult person in the state receives a minimum income for 125 days annually. State government announced an enhancement to the existing urban employment scheme (Indira Gandhi Shahri Rozgar yojana), increasing the employment guarantee from 100 to 125 days per family. Additionally, the state will complement MGNREGA’s 100 days by offering employment opportunities for an extra 25 days in rural regions.
- Guaranteed employment: The state will appoint a designated program officer, who will hold the position of at least a Block Development Officer in rural areas and an Executive Officer of the local body in urban areas to implement the act. If government fails to provide employment within 15 days, then there is a provision of unemployment allowance.
- Guaranteed Social Security Pension: It ensures that individuals falling into categories such as old age, differently abled, widow, and single woman with prescribed eligibility will receive a pension. The pension amount will also see an incremental increase of 15% per annum.
Analysis of the Bill:
Benefits:
- State has taken the rights-based approach of providing employment towards building social security net.
- It will provide financial stability to the individuals who are often forced to do menial jobs for sustenance.
- It will help in reducing poverty by ensuring minimum guarantee income to every adult individual in the State.
- Empowerment of marginalized sections of society such as aged, widows, differently abled, with the provision of pension.
- #Best Practice: Netherlands – Minimum Income Scheme (resulted into improvements in health and education indicators of targeted sections).
Issues associated with Minimum Guarantee Income:
- In urban areas, the demand for work is relatively stable throughout the year, unlike in rural areas where demand is often seasonal and addressed through schemes like MGNREGA. This stability can present challenges while designing a Minimum Guarantee Income.
- The availability and suitability of public works projects in urban settings, as well as the capacity limitations of urban local bodies, raise important questions about the implementation of this legislation in urban regions.
- It will increase fiscal burden on State government, as Rajasthan announced freebies worth 8.6% of its own tax revenue in 2022-23 (RBI estimates).
- Such schemes/legislations reflect the inability of the economy to create productive forms of employment at the scale required to alleviate social pressures.
Roadmap for future
- Consensus among stakeholders: Building consensus among policymakers, academics, economists, and other stakeholders is essential for successful implementation. Constructive dialogue and informed debate can help address concerns and refine the Minimum guaranteed income proposal.
- Mechanism for funding: Determining sustainable funding mechanisms is crucial. Options could include redirecting existing welfare program budgets or exploring alternative sources of revenue generation.
Job creation: The focus should be on creating employment opportunities for people with lower skill levels.
