UBI is a powerful idea whose time even if not ripe for implementation, is ripe for serious discussion
GN Bureau | January 31, 2017
The Universal Basic Income as an alternative to the various social welfare schemes to reduce poverty was advocated in the Economic Survey 2016-17 tabled in parliament by finance minister Arun Jaitley on Tuesday.
Read: Free money? Seriously?
The Survey juxtaposes the benefits and costs of the UBI scheme in the context of the philosophy of Mahatma Gandhi. It states that the Mahatma, as astute political observer, would have anxieties about UBI as being just another add-on government programme, but on balance, he may have given the go-ahead to UBI.
Read: How basic should basic income be?
The Survey says the UBI, based on the principles of universality, unconditionality and agency, is a conceptually appealing idea but with a number of implementation challenges lying ahead especially the risk that it would become an add-on to, rather than a replacement of, current anti-poverty and social programmes, which would make it fiscally unaffordable.
Based on a survey on misallocation of resources for the six largest central sector and centrally sponsored sub-schemes (except PDS and fertilizer subsidy) across districts, the Economic Survey points out that the districts where the needs are greatest are precisely the ones where state capacity is the weakest. This suggests that a more efficient way to help the poor would be to provide them resources directly, through a UBI.
The Survey points out that the two prerequisites for a successful UBI are: (a) functional JAM (Jan Dhan, Aadhar and Mobile) system as it ensures that the cash transfer goes directly into the account of a beneficiary and (b) Centre-State negotiations on cost sharing for the programme.
The Survey says that a UBI that reduces poverty to 0.5 percent would cost between 4-5 percent of GDP, assuming that those in the top 25 percent income bracket do not participate. On the other hand, the existing middle class subsidies and food, petroleum and fertilizer subsidies cost about 3 percent of GDP.
The Survey concludes that the UBI is a powerful idea whose time even if not ripe for implementation, is ripe for serious discussion.
Centrally sponsored schemes will now onwards run for a fixed period of time, thanks to a sunset date. An outcome review will also be carried out. In public policy, a sunset clause means that it shall cease to have effect after a specific date, unless further legislative/a
For the past 25 years, India has been rising in stature. It is continually called an upcoming superpower but has been unable to reach the promised status. India’s importance in the world is more due to its immense population and potential as a market than any objective assessment of development. Indi
Would keeping an army tank at JNU instil nationalism?
Everyone in Yogi Adityanath`s office declares that Yogi’s political career is founded on the work carried out from there, first when he was mahant of the influential temple, and then as an MP. Vijendra Singh, who works at the office, says “It’s because of these letters that Yogiji has n
Banks have advanced a staggering Rs 29,46,060 crore to the industrial sector, of which Rs 6.93 lakh crore are non-performing assets (NPAs). Finance minister Arun Jaitley informed
Here are 10 things that Kenneth Rogoff, Thomas D Cabot professor of public policy, department of economics, Harvard University, and author of `The Curse of Cash`, said about demonetisation at the Delhi Economics Conclave 2017: 1. The core idea for demone