Reading Comprehension Challenge - Cash schemes for poor and their effect on basic services.

The central point of the passage is: Schemes promising cash to the poor absolve the state of its responsibility to provide basic services like health.

Read the following passage carefully and answer the questions given below.

With the announcement of a minimum income guarantee (MIG) scheme by the Congress president, the agenda of universal basic income (UBI) has moved from an academic discussion to the political arena. As of now, the proposal of MIG is only an electoral promise with no further details available. On Friday, the general budget announced a scheme, Pradhan Mantri Kisan Samman Nidhi, under which vulnerable landholding farmer families, having cultivable land up to 2 hectares, will be provided direct income support of ₹6,000 a year. The appeal of some form of income transfer is now seriously being discussed by all political formations. The idea is not new and has been in discussion for some time among academics in India but attracted attention after it was proposed in the Economic Survey of 2017.

In simple terms, the proposal of transferring some income to every citizen is built on the twin principles of universality and a notion of minimum basic income to those living at the poverty line. The principle of universality is at the core of it given the problems of targeting. But some form of income support to those who are unable to participate in the labour market has been there in most countries in some form or other including in India, like the National Social Assistance Programme (NSAP) pensions for widows, elderly and disabled.

Although the idea of UBI has been in discussion for decades, no country has implemented it. While a proposal for UBI was rejected by a three-fourth majority in Switzerland, Finland which started a pilot has now discontinued it. But even in Finland, the pilot was not a strict UBI but a social protection scheme aimed at only the unemployed. While there have been some pilots by NGOs in developing countries in Asia and Africa, they have varied in content of transfer and coverage with only a few being fully universal and only the Namibia pilot experiment provided income transfer to people in the poverty line.

The proposals in the Indian context have mostly been for a targeted income transfer scheme and not UBI. In developed countries, the UBI is supposed to supplement existing social security provisions and a top-up over and above universal provision of health, education and so on. In the Indian context, most arguments in favor of UBI are premised on the inefficiencies of existing social security interventions and seek to replace some of these with direct cash transfers.

It is not just the fascination for targeting the poor which is at the core of these proposals but also a belief that all existing forms of social security transfers are inefficient. While there is certainly some exaggeration in such claims, it is not true that the system of cash transfers is efficient and therefore leakage proof. Several studies on cash transfers including one by J-PAL South Asia for NITI Aayog found that cash transfers are not greatly superior in terms of leakages compared to other schemes of in-kind transfer such as the public distribution system (PDS). On the other hand, numerous studies have documented that a move towards universalization and the use of technology-enabled Chhattisgarh and Tamil Nadu to reduce leakages in the PDS. But the real message from these experiments is also that universalization is the key to efficient delivery of services against targeting proposed by these cash transfer schemes.

The obsession with cash transfers also comes with an understanding that these will take care of all problems. The current sets of proposals claim these as silver bullets for agrarian crisis to malnutrition to educational deficit and also a solution for the job crisis. This is a tall order with different reasons for persistence for some of these. A good example is the public distribution system (PDS) where it is clearly established that in-kind transfers are twice as effective in increasing calorie intake compared to equivalent cash transfer.

The real issue with the approach of a targeted cash transfer scheme is that it envisions the role of the state to only providing cash income to the poor. This kind of ‘Robin Hood’ approach seeks to absolve the state of its responsibility in providing basic services such as health, education, nutrition, and livelihood. But it is also iniquitous since it seeks to create demand for services without supplying the services, leaving the poor to depend on private service providers. There is now sufficient evidence that shows that privatization of basic services such as health and education leads to large scale exclusion of the poor and marginalized. In any case, India is among the countries with the lowest expenditure to GDP ratio as far as expenditure on health, education and so on is concerned.

The best antidote to poverty is enabling citizens to earn their living by providing jobs. For those who are willing to work, schemes such as the Mahatma Gandhi National Rural Employment Guarantee Scheme should be strengthened to enable them to earn decent incomes. Similarly, the crisis in agriculture is unlikely to be resolved by income transfers. But even with free and universal access to public services and access to livelihood opportunities, there may be a role for cash transfers, particularly for those who are unable to access the labor market or are marginalized due to other reasons. The NSAP seeks to do exactly that by providing pensions to the elderly, widows and disabled. But even for these vulnerable and marginalized groups, the Central contribution to pensions has been only ₹200 per month. If governments cannot ensure decent incomes to the poor, then the issue is not of details of minimum income transfers but that of intent of those who are promising to eradicate poverty through income transfers. On this, there is no ambiguity.

(Source: The Hindu)

Q.1. What does the line - "The principle of universality is at the core of it given the problems of targeting." mean?

(a) The problem of picking out the correct one is the main reason for the non-implementation of minimum income guarantee schemes in various countries.

(b) The idea of universality i.e. 'making available for all' is at the core of minimum income guarantee (MIG) scheme.

(c) The basic idea of involving or being shared by all people has given rise to the problem of picking out the correct one.

(d) None of these

Q.2. Most arguments in favor of universal basic income are based on?

(a) The fascination for targeting the poor which is at the core of these proposals.

(b) The system of cash transfers is efficient and leakage proof.

(c) Universalization is the key to the efficient delivery of services against targeting proposed by these cash transfer schemes.

(d) Inefficiencies of all existing social security transfer scheme.

Q.3. How targeted cash transfer scheme will leave the poor to depend on private service providers for even basic services such as health, education, nutrition, and livelihood?

(a) The cash transfer scheme will lead to a rapid increase in the number of a consumer making it mandatory for the state to include private sectors for providing these basic facilities.

(b) It will create more demand for services than that provided by the state, leaving the poor to depend on private service providers.

(c) It will absolve the government of its duty or responsibility in providing these basic facilities.

(d) After the successful implementation of the MIG scheme, the only task of the state will be- to provide the cash income to the poor.

Q.4. According to the above passage, it can be inferred that

(a) The author is in favor of the cash transfer scheme discussed above.

(b) The author feels that the cash transfer scheme is beneficial for those who are unable to access the labor market or are marginalized due to other reasons.

(c) The author thinks the cash transfer scheme is a panacea for the agrarian crisis to malnutrition to the educational deficit and also a solution for the job crisis.

(d) The author is against the cash transfer scheme discussed in the above passage.

Answers & Explanations:

1. (c); The sentence, according to the context of the passage, means that the idea of universality i.e. ‘making available for all or shared by all’ has given rise to a new problem of finding the correct one.

2. (d); Refer to the last sentence of the 4th paragraph. It says, “In the Indian context, most arguments in favor of UBI are premised on the inefficiencies of existing social security interventions and seek to replace some of these with direct cash transfers.”

3. (b); Refer to the second sentence of the 7th paragraph. It says, “This kind of ‘Robin Hood’ approach seeks to absolve the state of its responsibility in providing basic services such as health, education, nutrition, and livelihood.”

4. (b); It can be inferred from the third sentence of the last paragraph. It says, “But even with free and universal access to public services and access to livelihood opportunities, there may be a role for cash transfers, particularly for those who are unable to access the labor market or are marginalized due to other reasons.”

Important Vocabulary:

 (i) Vulnerable (Adjective) – Exposed to the possibility of being attacked or harmed, either physically or emotionally.

Synonyms: Exposed, Susceptible, Accessible, Sensitive

Antonyms: Guarded, Safe, Secure, Strong

Sentence Examples:

• If we permit our economy to drift and decline, the vulnerable will suffer most.
• Something tells me they are vulnerable in ways we haven't guessed at.

(ii) Exaggerate (Verb) – Represent (something) as being larger, better, or worse than it really is.

Synonyms: Amplify, Fabricate, Falsify, Heighten

Antonyms: Compress, Decrease, Lessen, Abridge

Sentence Examples:

• I will not be so superfluous as to exaggerate the difficulty.
• It is, of course, easy to exaggerate the influence of sentiment in the case.

(iii) Envision (Verb) – Imagine as a future possibility; visualize.

Synonyms: Envisage, Visualize, Anticipate, Foresee

Antonyms: Ignore, Neglect, Disregard, Overlook

Sentence Examples:

• By the fourteenth century, the Turks began to envision the conquest of Bulgaria.
• It was not easy to envision, but he found it impossible to imagine sinking back to his former state.

(iv) Iniquitous (Adjective) – Grossly unfair and morally wrong.

Synonyms: Unfair, Wicked, Sinful, Evil

Antonyms: Honest, Appropriate, Correct, Decent

Sentence Examples:

• I even made a bet about it, which shows how iniquitous gambling is.
• The Pope's face hardened when he read the iniquitous letter.

(v) Eradicate (Verb) – Destroy completely; put an end to.  

Synonyms: Abolish, Annihilate, Eliminate, Abate

Antonyms: Create, Keep, Construct, Build

Sentence Examples:

• Is it any wonder that wickedness is so difficult to eradicate?
• There is a suggestion of weakness in your nature which I wish to eradicate.

(vi) Ambiguity (Noun) – The quality of being open to more than one interpretation; inexactness.

Synonyms: Ambivalence, Equivocation, Obscurity, Vagueness

Antonyms: Clarity, Certainty, Lucidity, Definiteness

Sentence Examples:

• Something is needed to cut into the ambiguity of human love.
• We can detect no ambiguity in this section of the Act.