Basic income: Towards a path of resilience (Indian Express)

Mains Paper 3:Economy 
Prelims level: Great Depression 
Mains level: Significance of the transformative economic policy

Context:

• India has been given time to prepare, or in the jargon of the moment, to get ahead of the curve before the death toll mounts, and the economic slump heaps further misery on people.

Key reasons: 

• The main reason is that the economic crisis has been waiting for some time to happen. The pandemic is like a trigger. 
• The global economic system has evolved into global rentier capitalism, not anything close to free-market capitalism. 
• With rentier capitalism, more and more of the income and wealth flow to the owners of assets-physical, financial and so-called intellectual property.
• The share of income going to people who work and labour has been falling across the world.

Crises difference between 1920 and 2020:

• A hundred years ago, the US economy was able to bounce back because the private debt was less than 50% of national income, corporate debt was insignificant, and the size of the financial sector was not large relative to the real economy.
• Just before the pandemic struck this year, private debt was over 150% of the US national income, and corporate debt was 73% of GDP. 
• In Britain, Japan and many other countries, private and corporate debt were also at record levels.
• This means that the major economies entered the pandemic in an extremely fragile state. The negative multiplier effects of a small downturn will be huge, and this is not going to be small. 

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Requirement of transformative economic policy:

• It requires brave and transformative economic policy. 
• While central banks and the international financial agencies will resort to fancy monetary instruments and will do their utmost to prop up corporations and financial markets, it is what happens to ordinary people that will matter most.
• We should presume that the Indian government is not complacent or timid. But, a key principle must be kept in mind. 
• Whatever the delaying effect of lock-downs, deaths due to the pandemic and to the ensuing economic downturn will be much higher if ordinary people are not given the resources to be resilient. 
• Indeed, the slogan should be: Rescue, Resilience, and Revival.

Way ahead:

• Several interesting schemes are trying to mobilise private money as donations to such initiatives as the PMNRF and PM CARES. 
• Those are likely to be politicised, and even if they were genuinely philanthropic, there would be widespread suspicion that they have ulterior motives. 
• Better for the affluent to allocate money to help legitimise a basic income system by making a start in randomly chosen districts, setting an example that the state and central governments could follow with conviction.

Conclusion:

• There is the technology to be able to identify everybody and deliver basic incomes (it could even induce much more documentation). 
• Above all, there are potentially millions of lives to be saved.

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General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q.1)With reference to the Global Initiative on Sharing All Influenza Data (GISAID), consider the following statements:
1. It is a public–private partnership between the German government and the non-profit organization Friends of GISAID.
2. It provides public access to the most complete collection of genetic sequence data of influenza viruses and related clinical and epidemiological data through its database named EpiFlu.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer......................

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Mains Questions:
Q.1)What are the main differences between the crises between 1920 and 2020? What are the major requirement for India to build transformative economic policy?