Universal Basic Income (UBI)

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The threat of -

      a) Growing Automation,
      b) The widening divide of wealth between the rich and the poor (concentration of wealth),
      c) Reducing/Limited Formal sector jobs,
      d) Informal sector jobs with no instability, and
      e) Limited skilling and re-skilling of people

pushed the world to consider different income redistribution concepts in the past few years. And one of the concepts that have received the most attention is the idea of Universal Basic Income or UBI. It is not a new idea, this idea of state-run Basic Income dates back to the early 16th century when Sir Thomas More argued in Utopia that every person should receive a guaranteed income, which was seconded by many scholars in coming years.

Universal Basic Income, or UBI, is a model for providing all citizens of a country with a given sum of money, regardless of their income, resources or employment status. The purpose of the UBI is to prevent or reduce poverty and increase equality among citizens.

 Following are the characteristics of UBI:
  1. Periodic: Distributed in regular payments,
  2. Cash Payments: Distributed as funds rather than, for example, vouchers for goods or services,
  3. Individual: Each citizen (or adult citizen) receives the payment, rather than each household,
  4. Universal: All citizens receive the payment, and 
  5. Unconditional: Recipients are not required to demonstrate need or willingness to work.

Proponents of UBI (Source: https://futurism.com/images/universal-basic-income-answer-automation)
UBI in India

 In India, the idea of UBI was never discussed in mainstream media or any other political or scholar debates/ discussion. But there are some discussions on the sideline. In 2016-17, the Economic Survey of India studied the idea and presented a model for UBI. The basic premise of the Economic Survey's UBI was: "A just society needs to guarantee to each individual a minimum income which they count on, and which provides the necessary material foundation for a life with access to basic goods and a life of dignity". According to Economic Survey UBI promotes:
  1. Basic values of a society which respects all individuals as free and equals,
  2. Liberty because it is anti-paternalistic, opens up the possibility of flexibility in labour markets,
  3. Equality by reducing poverty,
  4. Efficiency by reducing waste in government transfer, and 
  5. Greater productivity.
UBI is near and dear to both Right-leaning economists, who think it will restore individual choice/ freedom, and reins in the state and it will be fiscally efficient, and Left-learning economist, who thinks it will foster social justice, and equal opportunity for citizens and extend the welfare state.

In Jan 2019, Congress President Rahul Gandhi put the idea on the forefront of the political agenda by promising a minimum income guarantee to the poor, without giving any details.

Problems in Implementation 

Currently, many welfare programs like Mid-Day meal, ICDS (Integrated Child Development Services), PMGSY (Pradhan Mantri Gram Sadak Yojna), PMAY (Prandhan Mantri Awas Yojna), SSA (Sarva Siksha Abhiyan), MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act), PDS (Public Distribution System) etc. are currently in place for the poor, weaker and unemployed sections of the society which covers men, women, children and also household as a single unit. These welfare schemes cannot be simply scrapped.

There are few questions which needs to be clarified first. Will this be a simple cash transfer? Will it eliminate the existing welfare programs or this transfer will be an addition to the existing ones? Nobody is talking about it. Also, implementation of UBI will be a major challenge in India due to the sheer size of its population and its geographical vastness. For the successful implementation of UBI scheme the government needs to focus on:
  1. Source of the funds to run a UBI scheme
  2. The scale of the project (to whom it to be transferred/ identifying beneficiaries)
  3. Quantum of income to be transferred
  4. Cuts in other subsidies, incomes, and transfers
UBI, when carefully analyzed and successfully implemented, can have many potential benefits.

Location: Ahmedabad, Gujarat, India

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