I was somewhat distressed last week with the prospect of rushing through universal basic income, which theory I support strongly, but not its use as a poll prop, and I wrote a friend this:
There’s no end to sops: Subsidies. Loan waivers. Quotas. All of these increase over time even as poverty reduces. And it’s likely UBI too is a purely cynical short-term political weapon with decades long impact, just like the rest.
There’s are massive supply-side issues across India. Not enough jobs. Not enough roads. Not enough colleges. Not enough healthcare. Not enough land productivity. Not enough energy. Not enough people paying taxes. Not enough social mobility. But there’s very little to no thinking on expanding any of these.
And it has real problems on a gigantic scale: there is so little slack in the economy that even a modest stimulus in the form of a reduction in interest rates causes inflation to skyrocket. This means borrowing costs must remain high for businesses, meaning even slower growth even by the private sector.
In essence, the polity is breathtakingly opportunistic and profligate with public money without a thought to either increasing revenue, reducing outright waste or building long-term social/public assets.
You might say this is nothing new. It isn’t, other than the scale, and that it’s a fifth of the way into the twenty-first century.