Universal Basic Income( UBI) is the new product in the political bazaar. As an economic carrier taking the poor masses towards prosperity, UBI has been hailed by both schools of thought( left/ right leaning ideology). John Kenneth a left-leaning economist said-“ UBI is a means of fostering social justice and equal opportunity. Milton Friedman, right-wing thinker hailed UBI as a way of restoring individual choice and freedom and reigning in the influence of State. The 2017 Economic Survey has flagged UBI as” a conceptually appealing idea” and a possible alternative to social welfare programme targeted at bringing down poverty.
India, after 72 years of Independence had come out of the pits viz, ‘under- developed Countries to the category of fast developing countries. It’s a remarkable progress, bringing down poverty from about 70% of the population at the time of Independence to about 22% in 2011-12 ( Tendulkar Committee estimates). How- ever the implementation of welfare schemes for poor, has always been a head ache for the government. The subsidies allotted out of Govt exchequer, never reached the real needy in the indebted manner as the bulk of the money flowed to the pockets of middle men and government officials appointed to execute the schemes. The classical example of- “the fence eating the harvest”. The BPL cards are mostly owned by the undeserving public, the real needy poor public, are generally not able to reap the full benefits of welfare schemes. The leaks in the welfare scheme/distribution system are deliberately left out to be plugged.
UBI envisages an uncompromised social safety net that seeks to ensure a dignified life for everyone. It’s a concept that is expected to gain traction in a global economy buffeted by uncertainties on account of globalization, technological change, and automation. The Economic Survey 2017 devoted an entire chapter to its merits, concluding that “ the Mahatma would have been conflicted by the idea, but, on balance, might have endorsed it, seeing the merits of
A basic income is a regular, periodic cash payment delivered unconditionally to all needy, intended citizens on an individual basis, without the requirement of work or willingness to work. The 5 factors governing UBI are Payments at periodic regular intervals, Payments in cash( not in kind), Payments to individuals, universality, and unconditionality.
The implementation of UBI, therefore, entails termination of other subsidies and allowances in order to free up resources and funds so that a fixed amount can be diverted to the masses on a periodic basis.
Finland recently concluded a 2 years experiment on its effects on unemployed citizens. Before that, the government of Ontario, Canada, had announced a plan to test a kind of unconditional income guarantee, for three years as a case study. Certain cities in the Netherlands have launched municipal level tries of UBI. Barcelona in Spain has successfully tried UBI in its anti-poverty drive. Many private Charity Foundations have started experimental projects to test waters in this field. Most significant is a UBI experiment launched by Swiss film maker Rebecca Panian in the northern Swiss town of Rheinau. The participants will receive a monthly UBI of 2500 Swiss francs ( about 1.79 lakh).
The kind of disparity of wealth, the gap between the haves and have- nots, which exist in India is phenomenal. According to several Economists in India, dismantling welfare schemes like Mid-day meal, Pradhan Mantri Gram Sadak Yojana, National Health Mission, Pradhan Mantri Awas Yojana, Sarva Shikha Abyan, MGNREGS and PDS could be counterproductive.
The mid-day meal scheme provides a hot meal to 150 million school children up to 8th standard. And MGNREGS job to millions. To tilt the whole modal may be disastrous.
I foresee few setbacks in the introduction of UBI:-
– Instead of subsidies in kind, if cash is paid to the BPL families, the Male of the family may forcefully take away the money and misuse it, depriving even food to the family members.
– Regular cash award like salary without having to work will create a lazy, aimless generation who could be a permanent burden on the nation.
– In India, its quite easy to get one’s name enrolled as a BPL, and procure bogus BPL Card to avail the monthly payment. It could create a further drain of the exchequer.
-The growth and Welfare of a nation depend on the positive attitude of the citizens, to work hard and join hands to turn the wheels of growth. But a major chunk of the population who are paid without working, from the tax paid by the rest of the people will certainly create an atmosphere of chaos and disenchantment among the taxpayers. The best example is the social disharmony in the US between whites and blacks because a large no of blacks enjoys social security welfare schemes without doing any work, from the tax paid by the rest of the Americans. In a nutshell, the government needs to be cautious while debating the introduction of UBI since it’s a double- edged sword which could cut both ways.