Rajasthan hikes unemployment allowance: Like farm loan waiver, grant may end up as competition among states

On Thursday, Rajasthan chief minister Ashok Gehlot announced that he would  raise the unemployment allowance for the youth of the state from 1 March. Gehlot added that he was only making good on the Congress’ Assembly poll promise but the Congress has not been the only party to announce such a benefit before elections. With the country seeing its  highest unemployment rates in 45 years, an allowance for those without jobs is a ready solution for a party to align itself with the young. But with the Lok Sabha elections upon us, will it end up as mere competition among states just as loan waivers and assistances for farmers have now been? [caption id=“attachment_4291973” align=“alignleft” width=“380”] File image of Ashok Gehlot. Twitter/@ashokgehlot511[/caption] The Gehlot government promises an allowance of Rs 3,500 to girls and Rs 3,000 to boys. Before the Rajasthan Assembly election, the BJP too had promised a monthly allowance — of up to Rs 5,000 — for state’s educated and unemployed. In Telangana, Congress promised Rs 3,000, while TRS promised Rs 3016 . The KCR government’s Telangana TS Nirudyoga Bruthi Scheme will take off from April 2019. In neighbouring Andhra Pradesh, Chandrababu Naidu had already spoken of a Mukhyamantri Yuva Neshtam grant of Rs 1,000 a month to jobless youth. He has also hinted at raising it to Rs 2,000. The Samajwadi Party too has promised a similar allowance should it come to power in Madhya Pradesh, though it has not quoted figures yet. The parties have reason to make these promises. The youths of India, unencumbered by memories of past political wrongdoings, are a necessary vote bank for many political parties. In their sheer number, they form a vast and important an electorate as farmers do. On Thursday, reports emerged of the National Sample Survey Office’s periodic labour force survey revealing that the rate of unemployment stood at 6.1 percent in 2017-2018. The news spiralled into a raging controversy, with the government saying it has not finalised the survey and Congress chief Rahul Gandhi likening it to a “ national disaster”. [caption id=“attachment_5649631” align=“alignright” width=“380”] Representational image. PTI[/caption] This is exactly the kind of situation that promises of allowances for the unemployed seek to avoid. In the absence of the required infrastructure, industries and an overhaul of the employment system that would create more jobs, an unemployment allowance offers, what Times of India calls, a “political shortcut”. Just as farm loan waivers, as many experts argue, do not actually tackle the ritual problems faced by cultivators in India, sops for the jobless, while not capable of providing them with longterm solutions, are great for headlines and reaping election-time dividends. Ahead of the Uttar Pradesh Assembly Election in 2017, Prime Minister Narendra Modi promised the first statewide farm loan waiver, setting off a chain of similar competitive announcements in seven states. Maharashtra, Punjab, Karnataka, Rajasthan, Chhattisgarh, Telangana and Madhya Pradesh, reported LiveMint, have all brought in sweeping farmer-friendly economic measures if not direct farm loan waivers in the last two years. The cumulative cost to the exchequers has been close to Rs two trillion, finds the report. This is not even considering the Odisha government’s Rs 10,000-crore Krushak Assistance for Livelihood and Income Augmentation (KALIA) scheme, which seeks to cover 74 lakh farm households in the state including the landless. The report also highlights how the monetary policy committee of the Reserve Bank of India (RBI) has pointed out that the implementation of farm loan waivers across states could hurt the finances of states and stoke inflation. Often likened to band-aids on wounds, loan waiver schemes need careful planning which rousing campaign speeches provide little room for. The same, invariably, applies to unemployment allowances as well. An analysis by The Hindu, points out that unless the agrarian distress is solved with policies “to raise productivity, reduce costs of cultivation by providing quality inputs at subsidised rates, provide remunerative prices following the recommendations of the Swaminathan Commission, ensure assured procurement of output, expand access to institutional credit, enhance public investment for infrastructural development, institute effective crop insurance systems and establish affordable scientific storage facilities and agro-processing industries for value addition,” farmers whose loans have been waived will continue to suffer. Rahul Gandhi’s promise of minimum income guarantee may be radical, but this and the fact that the Narendra Modi government thought to fortify the previous government’s MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) scheme with Rs 60,000 crore in the 2019 Interim Budget, after heavily criticising  it for the past four years, shows that both the Centre and the Opposition are aware of longterm alternatives to four-figure allowances.