Budget 2020 | Helping the poorest; why super-rich must urgently step up tax game: Oxfam INTERVIEW

Budget 2020-21: There is an urgent need for the government to bring changes at grassroot levels and help the poorest of the poor. And the same cannot happen without the help from the most privileged and the richest of the country.

Budget 2020, Union Budget 2020 India, Budget 2020 India, Budget 2020-21, Sushil Modi, nirmala sitharaman

Union Budget India 2020: While the upcoming Budget 2020 is widely anticipated to focus on fiscal policies, there is an urgent need for the government to bring changes at grassroot levels and help the poorest of the poor. And the same cannot happen without the help from the most privileged and the richest of the country. Amitabh Behar, Chief Executive Officer, Oxfam India, believes that taxing the super-rich, instead of giving tax incentives to them, can be the first step towards achieving social equality. Moreover, the government must also look to ramp up the spending on social welfare schemes such as education and healthcare, he said. Among his other suggestions for the government are utilising existing schemes to help the poor and refocusing priority on agriculture. Edited excerpts of Amitabh Behar’s conversation with Shaleen Agrawal:

What can the government do in the Budget to boost the wealth and incomes of the poorest of the poor?

The government has an extremely critical task of reviving the economy but this cannot happen without boosting the rural economy. Fortunately, big businesses and other economists have spoken in one voice about putting money in the hands of rural poor. But, I would stress that the focus must go beyond just improving rural consumption through short-burst methods. We need a renewed measure to invest in all aspects of rural economy including agriculture, infrastructure and social services.

Raising funds to support the boost would require an increase in taxation on the super-rich and corporations. We are looking at a budget year when 63 Indian billionaires have a total wealth which is more than the previous year’s Union Budget. We must not provide tax incentives to the super-rich at the cost of the bottom 50% of the population.

Our spending on health, education and social protection is woefully low and often subsidizes the private sector. Plans to privatize education or healthcare like the one proposed by Niti Ayog (to allow private players to take over district government hospitals) goes against India’s commitment to the UN SDGs and will further fuel inequality. The argument to support private-public partnership model is that government funded services are of poor quality. But, our poor quality services can be blamed on our poor investment — 1.5% of GDP on health and 4% of GDP on Education. We must increase our expenditure on health and education.

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Is there a need for women-centric poverty alleviation policies?

Agriculture sector employees 75 per cent of the female working population and they are burdened with care work which goes unrecognised. More schemes are required to be implemented effectively to reduce the care work of women in rural areas. Only 18% rural households in India have access to piped water and having no access translates into women walking miles to fetch water before going to an agriculture farm for work.

Women’s workforce participation has halved since 2004-05. We will need to overcome gender blindness in our perspectives and make the right policy choices. We need progressive policies that support the rights of women in the workplace, ensure their access to public spaces becomes safe, recognises care work, and enforce a minimum wage, equal pay, and paid parental leave.

Can the government leverage schemes such as MNREGA and PM-KISAN to lift people out of poverty?

The focus should be on increasing transfers to the poor through strengthening existing initiatives like MGNREGA and strengthening the minimum support price in agriculture (eg. through expanding PM-KISAN), among others. Recent reports suggest that MGNREGA is facing an acute fund crunch with over 96% of the allocated funds already spent; in Rajasthan wages have not been paid since the end of October. Only half of the farmers (7.6 crore farmers) had received the benefits of PM KISAN and less than half the amount (Rs 36,000 crore) could be disbursed by November 30, 2019.

What can be done off Budget and in the long term to this end?

Agriculture needs to be made a priority, not just as a productive sector but for equity and employment. The state needs to undertake long-term investment in rural development and employment generation schemes and not stifle these with funding cuts. 

India is a young country and people have aspirations to grow, get job opportunities that provide decent wages and social protection. We have seen that educated young women and men continue to find it difficult to find work and are rendered unemployed. Greater educational  attainment does not seem to be translating into growing the country’s workforce. Plus, there is a trend of increasing informalization within the formal sector with more people employed as contractual workers working long hours, without decent wages and social protection. We need a radical shift focus towards labour intensive sectors to create more inclusive jobs, with better work conditions including social security benefits and the right to organise. 

We undermine the importance of data for policy making. Formulation of appropriate policy response requires reliable public data and it is also needed to gauge the effectiveness of policy. The government must invest in generating reliable studies and gather data for public consumption. Citizens should be able to use data and technology to hold governments to account and increase transparency. Lack of data and poor-quality data pose a major challenge to quantify the extent of inequality within the country.

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