The Need
There is no denying the gravity of the state of the economy. With a 24% year-on-year contraction in GDP during the April-June quarter, analysts are now predicting a fall of 10% or more for the financial year. The Central and state governments are engaged in a confrontation about the shortfall in GST compensation. The Central government is caught in a bind – to pump in more money and risk a ratings downgrade as the deficit rises, or wait and watch and risk prolonging the recession. There is also a growing clamour for augmenting the fiscal stimulus and putting money in the hands of the people.
Simultaneously, coronavirus cases continue to grow, and local lockdowns slow the recovery as the virus lives amongst us. The availability of a vaccine that will provide long lasting immunity is still unclear though there are reasons to be optimistic. Against a backdrop of fear, uncertainty and doubt, people are cautious with their spending. Many small and medium enterprises face pain due to demand slump.
So, what can the government do? A set of actions is needed to achieve the following:
- Put money in the hands of people without enlarging the fiscal deficit
- Get India to sustained 10% GDP growth rate
- Not entail any government borrowing which will impact the future growth
- Attract global investors and their trillions of dollars
- Not cause inflation
- Be politically popular and financially wise
- Solve the credit constraint problem that many Indians face
- Give families the freedom to make their own choices
- Not a violation of the fundamental rights of the people
Sounds like Mission Impossible?! And yet, there is a solution which can meet all the above requirements – Dhan Vapasi. It combines two ideas – the monetisation of surplus public assets combined with universal wealth return. India’s public wealth of $20 trillion which is locked up in land, PSUs and minerals needs to be returned to the rightful owners – the people of India, who can then decide what to do with it. Dhan Vapasi is the one idea that can work as the economic treatment to help Indians recover.
The building blocks of Dhan Vapasi are these:
- We, the people of India, as the rightful owners of India’s public wealth, have a claim to the income from our public wealth
- Public wealth is all that is not privately owned. It consists of public lands, minerals, public sector corporations, government-owned financial institutions like banks and insurance companies, and resources such as the electromagnetic spectrum
- The surplus public wealth of India is estimated at Rs 50 lakhs per family
- Dhan Vapasi is the proposition that every family must receive a dividend income of Rs 1 lakh every year from the public wealth they own
- The government must be prohibited from taking any portion of that public wealth for its own use
The claim is that:
- Dhan Vapasi will eliminate extreme poverty
- Dhan Vapasi will create millions of additional jobs every year
- Dhan Vapasi will eliminate the need for the dozens of public assistance schemes that are riddled with corruption
- Dhan Vapasi will reduce public corruption —by stopping leakage of funds meant for public assistance
Tomorrow: Part 2
