The idea of Universal Basic Income

In the Economic Survey 2017, the Chief Economic Adviser does mention his much-propagated idea of the Universal Basic Income. What is the concept of UBI and what are the various aspects related to it, we will understand in this blog.

  • What is the Universal Basic Income?
    • It is an income which has three components, namely
      • Universality, that is, given to all
      • Unconditionality, that is, will be given without any pre-conditions or eligibilities
      • Agency, that is, the beneficiary will be allowed to spend it according to his/her needs.

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  • What is the need of UBI?:
    • Poverty persists despite so many welfare programmes.
    • The situation of employment remains dismal.
    • This is a situation of social injustice.
    • The gap between the rich and the poor remains to be bridged.
    • It is important to elevate the poor at least to such level after which they could work for their own welfare.
    • Subsidies amount to around 5% of the GDP. These are not distributed well and leakages undermine the intent of these subsidies.
  • What are the arguments in favor of the idea?:
    • Philosophically, it is in line with the ideals of equality and social justice
    • Poverty and vulnerability reduction
    • Choice with the poor to spend accordingly. Money-in-hand could also help in backing the entrepreneurial aspirations
    • Better targeting of poor, as all are targeted–>no inclusion errors
    • Provides insurance against shocks like health, income among others
    • Lesser psychological shocks due to guaranteed incomes
    • Lesser burden of implementation of CSS will increase the efficiency of the administration
    • Improvement in financial inclusion: as it will encourage greater usage of bank accounts.
  • What are the arguments against the idea?:
    • Irresponsible spending. For eg. men may spend it in liquor, gambling etc
    • Could reduce the tendency and will to work–>Goes against the Gandhian principle of earning one’s own bread through labour
    • Men may exercise the control over the whole income–>inducing gender disparity.
    • Implementation is going to be a challenge–>stressed banking system.
    • Fiscal deficit may increase.
    • Inflation may increase due to increase purchasing power.
    • Rich also getting the income –>absurd and philosophically empty.
    • It may be followed or preceded by the repealing of the current subsidies.
  • What are the challenges?:
    • Ensuring transparency in the process of transferring the amount.
    • Putting in place a large machinery required to implement the idea.
    • Ensuring timely transfer of the benefit to the beneficiary.
  • What is the way ahead?:
    • Bank accounts for all. Even after PM Jan Dhan Yojna, a number of people, particularly, in the rural areas remain without any account.
    • Universal availability of Aadhar: Till now, around 95% of the population is registered under UIDAI.
    • Time bound transfer within the date stipulated.
    • Financial literacy among the people to operate their bank accounts.
    • Awareness about the scheme and sensitisation about the legitimate spending of the money.

 

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The Jallikattu Struggle

  • What is Jallikattu?:
    • A traditional bull taming sport organized in Tamil Nadu during the festival of Pongal.
    • Also known as Eruthazhuvuthal or Manju Virattu.

 

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  • Why did SC ban it(arguments against Jallikattu)?
    • As per the petition filed by the Animal Welfare Board of India, it holds the Jallikattu responsible for cruelty in the form of physical and mental torture for human pleasure and entertainment. Such torture is enforced even outside the ambit of the sport. This leads to the treatment of the animals as means.
    • The Supreme Court identifies 5 kinds of freedom for the animals, namely :
      • freedom hunger, thirst and malnutrition.
      • Freedom from physical and thermal discomfort.
      • Freedom from fear and distress.
      • Freedom from pain, injury and disease.
      • Freedom to express normal patterns of behaviour.
    • According to PETA and AWBI, there are no evidence of the cultural, historical or religious significance of the sport.
    • It goes against the provisions of the Prevention of Cruelty to Animals Act, 1960.
  • What do Tamil protesters say(arguments in favor of Jallikattu)?
    • There are historical and cultural links:
      • Historical accounts trace its presence even 2000 years ago.
      • Finds mention in Sangam Literature in a text named Kalithokai, a poetic treatise.
      • Kamalambal Charithiram, a novel written by R. Rajram Aiyar, the disciple of Swami Vivekananda also mentions the celebration of Jallikattu
    • It is considered as a symbol of Tamil Pride.
    • They often uphold the rationale of rearing the native breeds which are mostly replace and undermined due to encouraging the cross bred cows like Jersey.Genetic diversity if often compromised with the introduction of the foreign breeds
    • Economically, the sport brings huge returns on the investments done by rural poor and farmers in case the bull performs well.
  • What could be the way ahead?:
    • A win-win solution through negotiations between different stakeholders including Animal Right activists and bodies, Jallikattu proponents, experts of animal husbandry among others.
    • Continuous monitoring of the torture of animals which could take place and consequent actions in the form of stringent penalties.

All you need to know about: Ethanol Blending

The government has come up with a renewed focus on the practice of ethanol blending. Here is all you need to know about it.

  • What is ethanol blending?:
    • It is the practice of blending petrol with ethanol.
    • Ethanol is 99% pure.
  • How is ethanol derived?:
    • Sugarcane industry is one of the important sources of ethanol.
    • It is derived from biomass through the fermentation process using glucose derived from sugar(sugarcane, sugar beet, and molasses), starch(corn, wheat, grains) and cellulose(forest products).

 

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Ethanol Blending of Petrol

 

  • What are the advantages of ethanol blending?
    • It increases the octane rating(a standard measure of the performance of the engine) of the fuel and thus acts as an anti-knocking agent.
    • It reduces the emissions of carbon monoxide, carbon dioxide, and hydrocarbons.
    • Lead and other carcinogens will be reduced.
    • Better combustion of engine fuel.
    • It will reduce the overall demand of petrol. This will alleviate the import burden of petrol–>around 80 million litres of petrol could be saved annually.
    • Reduced pollution will also help in checking the pollution-related health problems like asthma, cardiovascular diseases among others.
    • Cheaper than petrol, thus, savings for the consumers.
    • The demand of ethanol will increase giving a boost to the sugarcane industry which is the major source for ethanol.
  • What are the disadvantages related to ethanol blending?:
    • As the demand of sugarcane will increase, the products of sugarcane will also become more expensive. Thus, sugar can become costlier. This could cut the savings indeed.
    • The plants of sugarcane, sorghum etc. which are used for deriving ethanol would be cut. These plants play an important role in carbon sequestration. Thus, the sinking of carbon which tackles pollution will be affected.
    • The processes involved in making the engines adaptable to ethanol blended petrol will put a burden on the automobile industry. This burden could be transmitted to the consumers in the form of increased cost of vehicles.
    • Oil companies also need to alter their processes which could be a humongous task.
  • What are the policy measures taken by the government till now?:
    • Auto fuel policy 2003 found mention of ethanol blending.
    • National Policy of Bio-fuels,2009: Petrol blended with at least 5% of ethanol.
    • Recently, the Ethanol Blending Programme saw a tweak with the percentage blending increased from 5% to 10%.

Who is responsible for girl’s un-safety?

Yet another case of molestation came to light, this time in Bengaluru when on the eve of New Year, a girl was forced for “unwanted” favors by the two scooter-driven men.

After the December 2012 grave incident, popularly known as the Nirbhaya casethe situation of girl safety and security was expected to improve. However, the figures do not corroborate with these expectations.

According to the National Crime Record Bureau(NCRB), the rape cases registered in the year 2015 figured at 34,651.  As per multiple studies including that of United Nations, more than 50% of such crimes are never reported. Taking the latter fact into account, the figure of actual rape cases is considerably enhanced.

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This poses a question on not just the administration for being evasive of its duty but also to the citizens who probably never stepped out of their narrow circle of thinking.

Keeping aside the administration’s fault(which we know is grave and can’t be ignored), the role of citizens has also to play a major role here. The reason why the female is still treated as a means and not as an end lies in the mindset of the people of this very society who have never been able to step out of their limited scope of thinking especially when it comes to girls.

A movie called Pink released in the second half of 2016. The movie was a true reflection of the stereotyping and backward perceptions that prevail when it comes to girls. Respected Amitabh Bachchan who played a lawyer, through his dialogues, compiled a “The Rule Book of the Girls safety manual”. These rules reflect the “broad” mindset of this society. These are:

  • Don’t stay out late.
  • Don’t spend time with boys.
  • Don’t wear small clothes. 
  • Don’t smile when you talk to boys.
  • Don’t be independent.
  • Don’t drink with boys or do not accompany them for a dinner.

Because if you do any of these you are “meant” to face the “consequences” and here the person at the receiving end and the perpetrator will be the same , that is, the girl as “she was the one” who “intimidated” the boy to do what he does in this “course”.

These are the points which speak aloud that the “character” of a girl is judged at every point of her life and so “she” has to be cautious in her actions.

Sometimes it seems like a joke to even say that we are living in a progressive society. If this is called progress, then “progress doesn’t hold well for the girls”

Government to target Benami property: What does it mean?

The government has been taking a serious stance in its fight against the black money. After demonetisation, the next target as also repeatedly emphasised by the Prime Minister is the Benami property.

Here is all you need to know about the Benami Property.

  • What is a Benami property?:
    • A property which is purchased in the name of someone who has not purchased it.
    • The person on whose name it is purchased is called benamdar.
    • The property purchased is  a Benami property.
    • Such a property may be movable or immovable, tangible or intangible, any right or interest or legal documents, even gold or financial securities.

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  • Why is it necessary to tackle the Benami property holding?:
    • It is one of the largest sources to channelize the black money.
    • Illegal money is often used to purchase land or any property.
  • What is/are the reason/s for existence of Benami property?:
    • Evasion of Land ceiling acts(an upper limit on land holdings is placed to avoid concentration of land with a few).
    • To evade taxes and conceal the accrued black income.
    • To conceal the corruption-related income (by the public servants).
  • Any earlier attempts/recommendations to curb Benami property?:
    • Committee on Tax reform : 1960.
    • Law Commission: 1973.
    • Benami Transactions(Prohibition) Act, 1988: First of its kind legislation.
  • What’s there in the new legislation?
    •  Definition:
      • Earlier definition: a property transferred in the name of a person but paid by another person.
      • NOW: following will be considered as benami:
        • Transaction made on fictitious name.
        • Owner is not aware or denies knowledge of the ownership of the property.
        • The person providing the consideration of the propertyànot traceable.
      • Exemptions under the new act: cases when a property is held by:
        • A member of HUF in the name of child/spouse and paid through known sources.
        • Joint property with sister, brother or other relatives for which the amount is paid through known sources.
        • Someone in fiduciary capacityàtransaction involving a trustee and a beneficiary company , firms and bodies of individuals director, trustees, directors of a company.
        • Religious trusts.
      • Imprisonment and fine :
        • 7 years+ fine(can be up to 25% of the fair market value of the property) as compared to the previous 3 year jail or fine or both.
        • Also penalties for providing false info 6 months to 5 years + fine up to 10% of fair value of Benami property.
      • Earlier  authority according to rules; Now: Four authorities:
        • Initiating officer.
        • Approving authority
        • Administrator.
        • Adjudicating authority.
  • What are the challenges that lie ahead?:
    • Identification of Benami Property.
    • Lack of political will.
    • Lack of proper implementation. The earlier act of 1988 was barely implemented.
    • Procedural infirmities.

Is army being politicized?

Recently, the appointment of Lt. Gen Bipin Rawat has been apoointed as the new army chief. He will be succeeding the current chief General Dalbir Singh Suhag. However, this appointment has drew considerable flak from all sides. Why is it so, let us discover in this article.

Whats the issue?

The Indian government broke the convention regading the appointment of army chief by appointing the third most senior Lt. Gen Bipin Rawat superseding his two seniors, Lt. Gen. Praveen Bakshi and Lt. Gen. PM Hariz.

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What was the convention till now?

Till now, the seniormost army personnal has been elevated to the position of army chief.

Has this happened earlier as well?:

There are a few instances from the past as well, when the convention of seniority was broken:

  • 1972(Indira Gandhi regime): Lt. Gen. GS Bewoor given preference over his senior Lt. Gen. PS Bhagat.
  • 1988(Rajiv Gandhi regime): Lt. Gen SK Sinha superseded in favor of Gen AS Vaidya.
  • 2014(UPA-2): In the appointment of Navy Chief, Robin Dhawan was given preference over his senior Shekhar Sinha.

On what grounds is the government justifying its decision?

  • The government is justifying the decision on the basis of meritocracy.
  • The government says that the appointment of the current chief is apt according to the existing security circumstances.
  • Also, the operational experience and general  dynamism of  General Rawat are two of the grounds for his appointment.
  • Rawat also has led many counter-insurgency operations thus, leading to an inclination in his favor.

What is the concern surrounding such an appointment?

  • Such a move could politicize the army.
  • As, there is no framework being laid down for the “meritocratic” appointments, it can lead to nepotism and favoritism. If there would have been an objective code laying down a criterion for merit-based appointment, then nepotism could have been checked. Now, the appointment may be dictated by the whims and wishes of the government.

Should agricultural income be taxed?

A debate about taxing the agricultural income has picked up of late. It is said that at least a few rich farmers need to be brought into the tax net. As of now Central Government can’t impose or levy tax on agricultural income. The exemption clause is mentioned under Section 10 (1) of the Income Tax Act of India.

Taxation of agriculture has many supporters including Dr. B.R Ambedkar. The recent Economic Survey also gave positive signals regarding the same. The topic has been a moot one since 1970s. A committee on Agricultural income headed by K.N Raj also recommended taxation on the income of rich farmers.

In this article, we will be understanding both the sides of this debate.

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Why should agricultural income be taxed?

  • A large number of farmers earn more than those non-agricultural workers who pay taxes.
  • It can reduce disparities among farmers across the country. For example, the farmers in the region where Green Revolution happened are much affluent while many farmers in Maharashtra, Rajasthan, Bihar, MP among others are living in pestilence. Channelizing the taxed income to their welfare can help reduce the disparities among the farming community across the country.
  • Since, agriculture has modernized and is continuing to do so, the productivity has been increasing, thus, creating avenues for taxing the agricultural income.
  • Countries like Japan, China and Soviet Union opted for inter-sectoral resource mobilisation. They mobilised resources from agriculture to the industrial sectors.
  • It can bring down land prices as the land dealing will be done through appropriate legal procedures.
  • It can promote economic stability.

What are the issues with taxation of agricultural income?

  • Difficult to trace the income of the farmers.
  • Seasonal fluctuations leads to fluctuations in the income of the farmers.
  • Imposition of taxes could lead to higher credit flows  from banks to the rich farmers as they have higher income to show and thus, banks would prefer to lend them as the return is much more assured as compared to that of the poor farmers.
  • Problem of depreciation and capital replacement is more complicated in agriculture.
  • Most of the farmers are illiterate/semi-literate and thus, are unaware of the systematic account keeping methods.
  • With increasing suicides, taxing the agricultural income may increase the fear of more.

What could be done?

  • Start with partial taxation.
  • Setting a threshold of say, 5 acres for eligibility of taxation.
  • Providing necessary exemptions like exemptions of income from rice/wheat/pulses fields.
  • Agriculture is a state subject and thus, consultations with the states regarding the same need to be carried out.