CAPITALISM, is an economic system, that has played pretty well in the progress of human society. America stands as an iconic symbol to substantiate this point. From the times of Mr. Edison, the great inventor-cum-capitalist, to the present-day Google's & Apples - all are a great testimony of the fruits of Capitalism. The incentive to private ownership and inheritance rights, have given tremendous thrust to the human DNA to play its full potential. Human brains are wired to be driven by incentives. Rewards fire up the entrepreneurial spirit leading to more jobs and general progress. Maybe, this was true till the dawn of Digital Era. Post this new Internet revolution, economic growth seems to have alienated itself with commensurate job growth. Economic progress without jobs and imbalance in wealth distribution are few of the vices that Capitalism seems to be churning now.
Governments are constantly becoming aware of this massive divide between the 'Rich and the Poor' which has only accelerated over the years. Unfortunately, the recent pandemic, COVID-19, has made matters worse. The administrative think tanks around the world are becoming more & more aware that an extremely skewed society is a sure-shot path to its own annihilation. This imbalance will promote chaos and arson. Capitalism as a system, hitherto credited for progress might become responsible for the regression of the society - a poisoned chalice for human race.
The recent steps taken by various Governments across the World, of providing stimulus cheques and doling out money, had to be taken. It might appear to benefit in the short term, however, the economists are also not shying away from accepting the fact that such steps will lead into massive strain on Public finances. Remonetizing such fiscal slippages over the years will lead into inflationary pressures, pushing the poor further to the corner. Which means Governments across the globe have to simultaneously think on medium-to-long term policy measures alongside such steps. They don't have much time.
And that is were I believe, the concept of Universal basic income (UBI) has become ripe. Governments have to give this a serious thought and start thinking on raising resources for this outlay. Carving out funds for UBI might be a tough proposition for Governments but they can't escape this outlay which should be considered at par with the inescapable Defence budgets - if I were to draw the importance of this concept and its urgency. If not UBI then society might enter a phase of chaos leading to issues on sovereignty - quite similar to our logics on maintaining the defence forces.
Somehow, I never had a satisfactory answer to why Wealth tax was abolished in India in Budget 2016-17. Instead of making the act friendlier, more simplified and less costly to the exchequer in collections, the Government conveniently chose to scrap it. With UID for properties, with Benami act under play and with Digital tech at service, it shouldn't have been much of an issue. One more tax that I can't miss out talking is the Inheritance Tax. There was an intense rumour of the advent of this tax in last few budgets but somehow even this escaped mention. My views on this are articulated in an earlier note I shared on this forum. I have favored promulgation of this tax for reasons even other than tax. (I shall be glad to receive comments/suggestions in case you can spare time and read it.)
Bringing in such taxes with proper simplified rules not only raises resources for the Government but it also helps unwind the other problem bogging the economists and Authorities - which is concentration of Wealth - an inimical fall out of Capitalism as explained earlier. People might label me as a socialist, but I guess, they might not foresee a future where the imbalance in society is such that we live in fear.
I can see lot of red flags already - some even from my own circle - however before they write me off as a pre-historic Marxists, I wish to draw their attention to a Head of Income Tax aptly named as 'Income from house property' that appears in Indian Income tax returns. If someone was to question me whether this Income tax or Wealth Tax - I might probably be not so sure in my reply. To my mind, it exhibits both virtues. Allow me to explain. The rule to this tax reads, that in case an Assessee doesn't receive any rental income on his extra real estate (beyond certain number), a fair value of the real estate property shall be annually taxed (a notional rent). Will my displeased friends raise red flags on this now? There are few more provisions in Income Tax Laws where it is difficult to put them in specific silos of Income-tax or Wealth-tax. So, my brethren shouldn't have problems with Wealth tax as a concept. As regards Inheritance tax - I have put forth my views earlier and you are welcome to offer corrections/comments/
Let us debate on UBI a little. The concept of universal basic income (UBI) is simple. Every human being living on this planet has the right to some basic amenities to survive as a human. This need is beautifully summarised by one of our old time Bollywood favorite's, 'Roti, Kapda Aur Makaan'. Of course we might have to add two more things to this list which is Education and Medical facilities - again basic in nature.
The time of this idea is ripe not only to tide over the crisis of unemployment and resultant poverty but also to re-establish the human race back to the topmost shelf on Darwin's ecological scale as a social being. The recent Covid-19 Pandemic and its fall-out has only fast forwarded the cause of UBI. The kind of piteous situation, we are witnessing in the migration of people from working cities to their villages, might put our heads to shame. No words can explain the loss of lives, on railway tracks of few people, who were attempting to walk back 1000 kms or more to their villages. No empathy can solace those mothers who are carrying babies in their arms and walking on burning roads under the hot sun. Small children walking with baggages on their heads bigger than even them. Lots of them…And I can go on. UBI is a must and better be introduced to cover our heads with some shelter.
I also have certain thoughts around tackling the impending backlashes of unemployment. We should introduce the concept of Community work which allows a person to earn 'Community Credits'. Such credits should allow a person to exchange it for facilities / services / goods for a dignified joyful living experience. (For items that are above the basic survival). A social dignified existence in the society is equally important and a person should be allowed to contribute, earn and keep himself/herself productively occupied. Such credits should be quite similar to the Test scores or Credits that accrue to a student while studying. They are not transferable nor are they inherited. Community work will enhance societal living and offer employment to the growing population of unemployed. Government can have dedicated stores to offer goods/services against such Community Credits.
Needless to say, that such community work needs to be pre-defined, measurable and can be translated into community credits. Several examples are available in other countries if the Government wishes to give it a serious thought. The community credits could be earned for work done that involves - education, serving the poor, serving the elderly, serving the army, manning the traffic, helping elderly cross the roads, serving as the eyes of Law& order, helping the local administration etc. I believe, there can be good innovative thinking as we move forward with this thought. The only condition is that the work needs to be quantifiable.
Hope my friends will offer their thoughts to amend, correct, suggest and refine this concept more. Let us use the power of internet / social platforms to draw ideas, to deliberate and offer some meaningful ideas for the Indian authorities to think and act. I guess, it might be a better idea than sharing, forwarding the mistakes and gaps in how the Government of the day is handling this unprecedented situation. This epidemic has been a First for various Governments and fighting it on such a large scale requires appreciation. I am sure - no person suggesting mistakes would like to swap places with the Admin guys in action right now.
So lets do our bit.