Governance Now Visionary Talks Series

Universal Basic Income an alternative to state subsidies: Economic Survey

UBI is a powerful idea whose time even if not ripe for implementation, is ripe for serious discussion

GN Bureau | January 31, 2017


#Arun Jaitley   #Economic Survey   #Universal Basic Income   #Mahatma Gandhi  


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.
 

Comments

 

Other News

Breaking new ground in Ayodhya: History is created

History was created as prime minister Narendra Modi participated in the foundation-stone-laying ceremony for the new Ram Temple in Ayodhya on Wednesday, ending centuries of controversy. Modi performed Bhoomi Pujan at `Shree Ram Janmabhoomi Mandir`, in the presence of a very limited number o

How to encourage and support breastfeeding amid pandemic

The most joyous moment of a woman’s life is to breastfeed her baby for the first time. Breast milk is the foundation to build a strong bonding between mother and child and must not be missed by any newborn in its nutrition uptake. The World Health Organization (WHO) is encouraging people to “su

Covid testing: India crosses 2 crore milestone

As part of its 3T strategy of focusing on testing, tracing and treating to contain the Covid-19 pandemic, India crossed a landmark, testing 2,02,02,858 COVID-19 samples so far. This is pursuant to the key strategy followed by state/UT governments under the guidance of the centre for managem

Sustaining development in the time of pandemic

The continuing spread of COVID-19 has emerged as the biggest roadblock to development in 2020. Citizens across the globe have been breathing an air of panic, fear, and confusion, not knowing what lies ahead. The pandemic has hit some communities and countries harder than the others, requiring everyone to u

"Mumbai Commissioner shameless in taking credit for Covid numbers"

Senior BJP leader Kirit Somaiya has blasted BrihanMumbai Municipal Corporation (BMC) commissioner IS Chahal for taking credit for reducing the number of coronavirus infections in the in the slum sprawl of  Dharavi, and wondered how could the authorities make boasts when 10,000-plus people have died.&n

Mumbai civic body hiding real Covid-19 toll: Kirit Somaiya

Firebrand BJP leader Kirit Somaiya has blasted BMC Commissioner, IS Chahal, for claiming credit for reducing numbers of coronavirus cases in Mumbai city and said that BMC’s own Sero Survey has revealed that 57% slum dwellers have developed immunity which is why the cases are coming down.  

Governance Now 5th PSU IT Forum

Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter