Goa’s Permanent Fund presents a golden opportunity to create an innovative social contract between our state government and citizens. The state is the trustee over Goa’s minerals as well as the Permanent Fund. The lawful beneficiaries are Goan citizens and our future generations. By extension, any real income from the Permanent Fund ought to be distributed as a citizen’s dividend: equally and to all Goans as our hereditary right.
A Permanent Fund of this type is the basis of ‘Universal Basic Income’ (UBI). This may appear to be a futuristic idea, but right now Goa has both the opportunity and means to be a world leader by introducing such a citizens’ scheme. UBI is a great boon to a society. It provides financial security while simultaneously promoting fraternity, equality and freedom: the very the bedrock of a modern nation.
A Permanent Fund is essentially a means to both convert and maintain the real value of an inherited asset. Traditionally, inheritances could be held in non-depreciating assets such as precious metals, precious stones and land. These assets retain value over many generations, unlike cars, buildings and manufactured assets. Permanent Funds are fundamentally a corpus fund or endowment fund. The first priority of a Permanent Fund is to maintain the full value of the inheritance. Beyond this any further ‘real’ income can be expended. In this way future generations would not only inherit the Permanent Fund assets, but also benefit from the additional ‘real’ income. In this way, when we sell our family gold and invest in land or a Permanent Fund, we can keep our capital intact, while benefitting from the crop (land) or the income (Permanent Fund).
In the Goa Mining Case, the Supreme Court ruled that the Goa Iron Ore Permanent Fund be set up on grounds of intergenerational equity and sustainable development. It further ordered that 10% of the proceeds from e-auction of ore, and 10% of the sale value of iron ore extracted be collected as a new levy and deposited into the Permanent Fund.
Goa ought to be proud of its Permanent Fund for a number of reasons. It is the first Permanent Fund in India. While over 50 Permanent Funds exist globally, with the oldest dating to 1876, this is the first initiated by judicial action. This makes it a precedent. Courts worldwide can point to Goa and set up Permanent Funds for other states and nations.
However, all is not well.
The Goa government is determined to fail its duties. It has persistently put forward poorly drafted-plans to the Supreme Court, blueprints that are far removed from any reasonable description of permanence. The latest draft outlines a twenty-year-long permanent fund. Using international benchmarks (Truman Index) to rate the draft, it scores worse than any other fund ever to be rated: a rare skill indeed!
It gets worse. The recent economic survey reports that approximately Rs. 120 crores has been deposited into the Permanent Fund. This amount is approximately 10% of the total proceeds from the iron ore e-auctions. However, since mining has restarted, the state has collected around Rs. 450 crores by way of 15% royalty on iron ore. Because the levy for the Permanent Fund is 10% of the sale value, we should expect at least another Rs. 300 crores to be deposited. However, by all official accounts, this amount has not even been collected.
A Permanent Fund of Rs. 500 crores would be enough to pay an annual Citizen’s Dividend of Rs. 100. Not only that, it would continue to increase over time. Our children and grand children would inherit the corpus, and continue to enjoy the dividend (zonn). Will the people of Goa ever wake up from their slumber? Will we let the looting continue in this fashion? Will our children spit on our graves in contempt?
(Laura Bush is a member of the Goenchi Mati Movement, goenchimati.org)
