Universal Social Engagement USE

 UNIVERSAL SOCIAL ENGAGEMENT

A 𝚂𝚝𝚛𝚊𝚝𝚎𝚐𝚢 𝚏𝚘𝚛 𝚙𝚛𝚘𝚖𝚘𝚝𝚒𝚗𝚐 𝙸𝚗𝚗𝚘𝚟𝚊𝚝𝚒𝚘𝚗, 𝙴𝚗𝚝𝚎𝚛𝚙𝚛𝚒𝚜𝚎 and Justice 𝚒𝚗 𝚊𝚗 𝚎𝚡𝚙𝚘𝚗𝚎𝚗𝚝𝚒𝚊𝚕 𝚠𝚘𝚛𝚕𝚍:

For India to flourish, it needs to innovate, compete and give full space for entrepreneurship. This alone will help in wealth generation in an integrated world. This would require reforms in all sectors and would involve transformative change in all sectors. These reforms are bound to have resistance from those who perceive losing out in the short term. Reform measures invariably have to get across this resistance - active or passive - of a few with entrenched interests. A connection between reforms and progress needs to be perceived by the majority to give impetus to it in a democratic polity. 

The (neutral) citizens may not support the reform measures when they do not see a direct connection between their lot and the reforms. However, it is not a healthy option to give them free doles to keep them engaged, as in a Universal Basic Income. There needs to be a system that addresses this challenge of engaging all of the population, along with ensuring enterprise, innovation, competition and social security. This would also mean they are stakeholders in free enterprise, competition, and innovation-promoting reforms.

Technology and finance are changing at an exponential pace. The productivity of society has been improving alongside. It is said that productivity improvement has been exponential since 1850. The exponentially increasing productivity is seen to lead to the exploitation of natural resources at a scale that is indeed not sustainable. If every Indian and Chinese start using the amount of energy that is presently being used in the US, the climate challenge will explode.

The productivity improvement has not been uniformly spread - resulting in rising inequality. The productivity, at present, is sufficient and more to serve a sustainable quantum of products and services to the whole population without requiring all of the people to be in the economic production cycle – leading to deprivation due to lack of purchasing power even when resources are available. The productivity can be even higher if sectoral and structural reforms are made. However, this would alter the present scheme of security for various sections of the population. Resistance to regulation is omnipresent even when some engagements destroy social value, given that livelihoods are affected in the transition. Even standing on top of all the productivity, it is a prick to the conscience that we still bank on the lack of basic needs to enthuse some of us to do some work which is abominable to the rest.

This position makes any reform effort difficult to execute as various stakeholders yearn for status-quo because of their vested interests. We try to argue for a modified system that will provide for social security, dignity, productivity, and equity even as the nation moves to strength by undertaking factor market reforms and other structural reforms in various sectors. These reforms are needed for India to be an assured power in the coming age, where all of its population are stakeholders.

To confidently go ahead on the high productivity path, India needs a safety net for those who are unable to keep pace. This safety net is presently sought to be provided, in the rural areas, as 100 days of wage employment to those who are willing to do unskilled labour in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). 

However, the natural selection of the needy with the condition of doing unskilled labour has the following issues.

1. Loss of Skill -Those exercising the safety net are forced to do unskilled labour even if they are skilled. This leads to their skills not being honoured, conserved, promoted, or newly developed. The mandate of doing unskilled labour hampers the productivity of the population, which had been left behind in the productivity race – condemning them to more inequality

2. Unproductive expenditure- For the same expenditure in the rural employment guarantee scheme, much more rural assets could have been created. The work estimates are higher because of the mandatory labor component. These assets could have been achieved much more cheaply with machines.

3. Possibility of graft- Work estimates are inflated as being done using unskilled labour. The asset gets made at a lower cost using machines, and the booking gets done in the name of labour. This results in the benefits of the scheme being targeted at the undeserving, especially in villages where social schism is more pronounced.

4. Dignity issues: For the selection of the needy, the condition is to do unskilled manual labour. Selection could have been made in a more dignified manner by providing for skilled labour, if possible at least, with a wage which is at a lower level. The Minimum Wage acts as a detriment to full employment. Here the safety net would provide for a de facto Minimum Wage at which full work is guaranteed with the resources of the State. Without this employment guarantee, the enforcement of the Minimum wage leads to unemployment!

5. Sustainability of assets made in MGNREGS: Presently, assets in the scheme are made with the premise that the system is to provide for unskilled labour. In many cases, the required material component is not provided for. This results in the lowered sustainability of assets that are created in the scheme.

6. Lack of convergence: Engagement with people is provided for by the State under other State schemes as well. However, there is no unified tracking mechanism for the engagement that is provided by the State. In extreme cases, it is found that some individuals are given more than possible employment when all schemes are put together.

7. There are disabled individuals who might not find engagement easily, even when they are skilled. Stand-alone works are not possible in MGNREGS. The present guidelines provide support roles for the disabled. However, this is not possible on occasions where there are not many people who are able-bodied asking for work.

The proposal is for a scheme that has the following attributes

1. Guaranteeing at least 40 hours of wage engagement every week for every adult without any rural/urban divide.

2. Unskilled wages will be offered uniformly. The wage level will be sufficient for sustenance but below the Minimum Wages rate (as provided in present MGNREGS)

3. The time offered by the citizen can be used for skilled labour, unskilled labour, or a skill training program. In exceptional cases, it could even be used to promote social causes or for counseling.

4. The objective of the program will be to skill the person to a level where she or he can migrate to the skilled wage rate available in the economy without being dependent on the scheme.

5. Rather than define this as an entitlement, such a dispensation may be made conditional to the citizen being collaborative to development-oriented reforms. 

1. The present MGNREG Act provides for unskilled labour: Though the body of the Act provides for wage employment to those willing to do unskilled labour and does not explicitly provide that skilled labour is not to be given, the schedule of the act has an explicit mention that unskilled labour is to be provided. This would require amendment.

2. The present act mandates that assets are to be created: The primary intention here seems to be ensure that productivity increases as a result of the expenditure incurred in the Act. It could also be to ensure that the work is actually done rather than just booking unproductive expenditure. This could be replaced by a mandate to do the building of productive assets as much as possible. We now have technology that can monitor skilling programs and skilled/unskilled work even when they are not leading to tangible assets. This improvement in technology could be leveraged.

3. The resources required for the scheme would be very high: A back-of-the-envelope calculation to provide for 20 days of 100 Rs wage to 1 billion people leads to the figure of Rs. 24 lakh crores for 12 months. But if the unemployment rate is taken to be 10 percent, it would be around Rs. 2.4 lakh crores. This would be provided converging the engaging platform with other schemes where people are engaged. Along with the material component required, the necessary provision would come up to Rs. 4 lakh crores.

Way forward

It is suggested that the MGNREG Act is suitably amended to provide for the scheme as:-

1. It already has a provision that overrides Minimum Wages Act, which would be required to act as a natural selection for the beneficiary.

2. There is machinery already in place for execution right up to the village level

3. The present form of NREG is having difficulties, as brought out above.

A suitable group may be asked to look into the formulation of a suitable scheme after consultation with all Stakeholders. The aim of the scheme should be to provide a stake to all citizens in the reform measures in the interest of enterprise, innovation, and competition.