The focus must be on JOBS – justice, ownership, bhavishya (future) and samriddhi (prosperity). Together, they create jobs – which is what India’s youth need.
As we have seen, only a political startup can dismantle India’s anti-prosperity machine. The coming elections give us an opportunity to unite to vote for India’s first ‘prosperity Prime Minister’.
But what should be the agenda for this prosperity PM?
The focus must be on JOBS – justice, ownership, bhavishya (future) and samriddhi (prosperity). Taken together, they create jobs – which is also what India’s youth need in millions; good new jobs which can put them on their own path to prosperity.
So, what should the JOBS agenda be? Here are the five actions that India’s first prosperity PM should take:
1. Universal wealth return of Rs 1 lakh per year per household
This is the share of every Indian family in the public wealth of India, which they own but the government currently controls. This distribution of public wealth will empower them to create wealth for themselves – to get skilled, start businesses, buy tools, build assets, move to a city, etc. It will also help them to withstand sudden income shocks. People know what they need better than any government official, and people can spend their own money more productively.
This amount will not be the transfers that governments usually engage in — the taxing of some groups to give to some others (and making themselves rich in the bargain). No country can grow rich by transferring wealth from one group to another. These funds will come from the unlocking of resources that the government currently controls but does not put into productive use.
Where will the money come from?
This money will come from reducing government waste and inefficiency, selling or shutting down government enterprises (because government has no business being in business), and deploying unused and under-utilised land resources. Higher productivity will result from freeing up the economy from government control. Indians will create more wealth, and therefore, there will be more wealth for everyone.
How will this make a difference?
The Rs 1 lakh per family per year will give millions of people who are currently poor the financial foundation to engage in productive activities, and also the ability to increase their personal consumption — food, clothing, shelter, education and healthcare. That increased consumption will lead to greater demand for goods and services, which in turn will lead to job creation and therefore incomes. It will be the start of a virtuous cycle of production and consumption.
The median household income of Indian families is a meagre Rs 1.2 lakh per year. The net wealth (saving minus the debt) of the median family is close to zero, and for a significant proportion, actually negative. Millions of poor families are just one medical emergency away from serious destitution. A guaranteed wealth return of Rs 1 lakh per year per family will provide them with the necessary safety net and transform their lives.
2. Tax cap of 10%
No tax in India – personal, corporate or GST – will exceed 10 per cent. This is to ensure that government lives within its means, does its core functions well, and does not get into things it has no business doing. For this, the government has to tax less and leave more money in the hands of people, for them to do what they please.
Currently, by taxing people unreasonably, the government has unjustified control of the incomes of people. This amounts to indentured servitude and slavery, and is not consistent with a free people.
The second major impact of the maximum 10 per cent tax limit is that it will force the government to stop wasting the wealth of the nation.
3. Title every property in 1,000 days
In his book The Mystery of Capital, Hernando de Soto says: “The poor inhabitants of these (poor) nations—five-sixths of humanity—do have things, but they lack the process to represent their property and create capital. They have houses but not titles; crops but not deeds; businesses but not statutes of incorporation… As a result, most of them are undercapitalised, in the same way that a firm is undercapitalised when it issues fewer securities than its income and assets would justify. The enterprises of the poor are very much like corporations that cannot issue shares or bonds to obtain new investment and finance. Without representations, their assets are dead capital.”
Many people live in homes where the title to the property is not clear. This also applies to small shops. As a result, while they may occupy the space, the property itself cannot be converted into collateral for credit, thus limiting the ‘owner’s’ ability to monetise the underlying asset.
Lack of clear titles is one of the biggest reasons for litigation. A dispute means that the underlying property cannot be monetised or used for productive purposes. In India, land disputes are also one of the biggest reasons for violence.
It is now possible to use a mix of on-ground technology with satellite data to accelerate the process of mapping every property and assigning clear title to every property in India in less than three years.
4. $1 trillion for good government
India’s governments do hundreds of other things and compromise on the basics. A good government is about the provision of public goods — things that only government can do, and which are the main functions of government. This means:
● Strengthening of defence forces by investing in modernisation.
● Creating an efficient, highly trained, professional police force.
● Making judiciary more responsive and efficient.
● Investing in urban infrastructure – to upgrade existing cities and build new cities.
● Building rural infrastructure for services provisioning.
5. Timely justice
A functioning justice system is the foundation of a prosperous society. Justice delayed is justice denied. The government must protect all citizens from coercion and deliver timely justice.
A 3-2-1 formula must be followed by the courts: three years to clear all pendency, two years for passing judgment in new cases, and one year for resolution of an appeal.
Taken together, these five actions will put money in the hands of people, ensure they can unlock their private wealth through the property that they own, resize government with a focus on the creation of public goods and the enabling environment that people need for wealth creation, and finally, ensure rule of law – because no nation can exist without a functioning legal system. More importantly, they will create tens of millions of good, new jobs that India so urgently needs.
These are solutions which any and every Indian government should have done. But their focus has been on strengthening the anti-prosperity machine that keeps Indians powerless and poor.
These actions can only be taken India’s first ‘prosperity Prime Minister’, as part of a political startup, and chosen by a united people who have had enough of promises and mayajaal.
This article was first published in Nayi Disha on 23 March, 2018. You can read the original article here.