Is it appropriate for India to implement a National Minimum Wage?

Universal Basic Income (UBI) in India: A Discussion

• The concept of UBI, which covers basic needs, has gained traction due to jobless growth and inequality.
• The International Labour Organization (ILO) links job loss and inequality to automation and AI use.
• N.R. Bhanumurthy and Arun Kumar discuss the potential of a UBI in India, highlighting the need for a universal UBI.
• Bhanumurthy argues that UBI is a semi-UBI, with cash transfer schemes for farmers and women, and even for unemployed youth.
• Kumar argues that UBI is a solution to the lack of demand in the market, which stunts growth and leads to unemployment.
• Kumar argues that UBI is a semi-UBI, where the state provides goods or money to the people, which is a failure of the capitalist system.
• He warns against giving money for no work, as it doesn’t give the person dignity.
• He believes that generating enough employment is essential, and that policies should be structured correctly to achieve this.

India’s Job Creation Challenges and the Role of AI

• The ILO report suggests slow job creation due to the rise in digital industries and the use of AI technologies.
• India’s Finance Minister and Chief Economic Adviser emphasize private industry investment in labour-intensive sectors.
• The government needs to focus more on employment-generating sectors, such as the railway freight corridor, highway projects, and power sector.
• Automation in the banking sector has led to a reduction in staff strength, affecting the efficiency of construction.
• E-commerce, the second biggest employer after agriculture, has grown exponentially, causing a rise in self-employment at low income levels.
• The issue of unemployment is a serious global issue, and the government’s Pradhan Mantri Awas Yojana has significantly impacted the social safety net at the rural level.
• The government’s policies have been clear about providing employment opportunities in addition to growth.
• There is an uneven distribution of incomes due to the growth described, but there has been growth in wages, though this is much smaller than the growth in profits.
• There is a mismatch between the skills demanded and supplied, suggesting an intervention in education to upgrade skills.
• Jobs created in the fourth industrial revolution are either extremely well paying or highly precarious, leading to massive income inequality.
• The government needs to focus more on universal basic social safety nets, which are skewed between states or within states.
• Raising more funds from direct taxes could bridge the gap, as India’s direct tax to GDP ratio is only about 6.25%.