Interim Budget 2019: Identify those 'too rich for dole, too poor to thrive'

It is imperative to identify people who are too rich for dole and too poor to thrive; people who have neither economic security nor social security

The Budget season is upon us, and it’s time for some reckoning. Much has been said about rising income levels in India this year. Yet, Oxfam Inequality Report 2019 estimates it would take 941 years for a minimum wage worker in rural India to earn what the top paid executive at a leading Indian garment company earns in a year. The inequality is troubling, no doubt. But there’s something I find even more troubling. The definition of income for the purposes of social security schemes doesn’t take into account one critical variable — economic vulnerability. Today, many in the country’s vast unorganised sector earn just a little over Rs 1 lakh per annum, which is the income cutoff for most government schemes. But the very nature of the unorganised sector leaves them vulnerable to economic shocks of all sorts — job loss, ill health, market downturns and more. 

In the last week, I’ve met two people who’ve been chafing at a modest rise in their incomes. The first of them is Amita, an illiterate domestic worker. Her husband has been jobless for years following an accident. Till last year, she earned Rs 8,000 per month, or Rs 96,000 per annum. A couple of months ago she received a salary hike of Rs 2,000 a month. Soon after, neighbours told her that applications for new ration cards were being accepted. “We’ve lived in Delhi for the last 10 years and have been unable to get our ration card made during this time,” she said. However, to her dismay, when she tried to submit her application, she was told that the card was issued only to households with incomes below Rs 1 lakh. “Today I earn Rs 10,000 a month and save nothing. Tomorrow, I could lose my job or be forced to take a salary cut,” she said adding, “What will happen to my family then?”

Rakesh Singh, a driver, earns a slightly higher salary than Amita and lives in east Delhi. “Two years ago, I was working as a watchman in Noida, earning about Rs 8,000 a month,” he told me. His wife stayed home with their infant son. “My employer was a kind hearted gentleman who saw how hard it was for me to manage,” he said. “So he paid for my driving lessons.” Now, Singh earns Rs 12,000 plus overtime every month. “This year, when my daughter was born, I wanted to enroll her under the Ladli Scheme,” he said. “There’s a daily risk of accident and injury in my line of work and I thought the scheme would ensure some financial security for her,” Singh said. But this scheme is also applicable only for households with less than Rs 1 lakh annual income. 

Amita and Singh are both the sole wage earners in their households. Both, till quite recently, fell in the Rs 1 lakh income bracket. Both remain vulnerable to job loss and decrease in income. It is imperative to identify people like them who are too rich for dole and too poor to thrive; people who have neither economic security nor social security — not just in Delhi-NCR but across the country. The government must somehow regulate the informal sector which has declined since demonetisation and the imposition of the goods and service tax. Meanwhile, it cannot ignore the needs of lakhs of Amitas and Singhs in the country.