NYAY is an important first step toward social justice -Vani S Kulkarni and Raghav Gaiha
Better health and education facilities, and expansion of old age pension and insurance must follow to improve the socio-economic status of the people .
A battle cry of the Congress in the current election is the Nyuntam Aay Yojana (Nyay), which promises Rs 6,000 per month to the poorest 20% of the households. Some have questioned its rationale. Others have questioned its feasibility. Still others have been laudatory about it. Few, however, rest their case on empirical evidence.
A central question that has not been debated is: What next after Nyay? This is addressed here.
Nyay’s moral appeal stems from arranging social and economic inequalities so that they maximise the benefits to the most disadvantaged. This celebrated principle of social justice is reformulated by Amartya Sen who shifts the focus from equality of primary goods (eg, rights, liberties, wealth and income) to the lives that people are able to live and freedoms that they would enjoy. These are designated as capabilities to live healthy and purposive lives. A cash transfer may not enable a disabled person to move freely, somebody suffering from cancer may have a short life expectancy, and a lonely widow may be unable to overcome ostracisation and depression.
We use a unique all-India panel survey of income distributions for 2005 and 2012, reported in the India Human Development Survey, 2015, to address the central question. Three per capita income categories are considered: (i)<20%, (ii) 21-50%, and (iii) above 50%, designated as poorest, moderately better-off and (relatively) affluent, respectively.
All (median) per capita incomes rose more than moderately from 2005 to 2012: of the poorest by 2.9 times; of the moderately better-off by 1.5 times; and of the more affluent by 1.06 times. So, if the income of the poorest continues to rise, the lump sum transfers required to meet the minimum income threshold under Nyay are likely to be substantially lower over time.
An important question put to households was: Were you better off during the last seven years (during 2005-12)? Three options were given: Were you the same? Were you better off? Were you worse off? Although these responses do not capture Sen’s nuanced concept of capabilities, our analysis yields useful insights.
Among the poorest, about one-third felt better off; among the moderately better off, a lower proportion did so; and, among the (relatively) affluent, a much larger proportion was better off. So only fractions of these groups were better off despite higher incomes while the highest fraction was associated with the (relatively) affluent. Hence the focus on factors that limit well being.
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