This document discusses Universal Basic Income as an alternative poverty alleviation strategy for India. It provides background on existing poverty and inequality issues as well as current subsidy-based programs. The concept of UBI is introduced as providing every citizen with a basic minimum income unconditionally. While UBI could help with social justice, poverty reduction, and administrative efficiency, there are also challenges to implementing it in India including potential costs, political will to eliminate other programs, and ensuring productive use of funds. The document concludes that UBI is worth further discussion but may not be feasible to implement properly in India's current context.
This document discusses Universal Basic Income as an alternative poverty alleviation strategy for India. It provides background on existing poverty and inequality issues as well as current subsidy-based programs. The concept of UBI is introduced as providing every citizen with a basic minimum income unconditionally. While UBI could help with social justice, poverty reduction, and administrative efficiency, there are also challenges to implementing it in India including potential costs, political will to eliminate other programs, and ensuring productive use of funds. The document concludes that UBI is worth further discussion but may not be feasible to implement properly in India's current context.
This document discusses Universal Basic Income as an alternative poverty alleviation strategy for India. It provides background on existing poverty and inequality issues as well as current subsidy-based programs. The concept of UBI is introduced as providing every citizen with a basic minimum income unconditionally. While UBI could help with social justice, poverty reduction, and administrative efficiency, there are also challenges to implementing it in India including potential costs, political will to eliminate other programs, and ensuring productive use of funds. The document concludes that UBI is worth further discussion but may not be feasible to implement properly in India's current context.
Dr. Radha Parmar Dr. Shyam Sundar Singh Chauhan • Poverty and inequalities of income and wealth are some of the serious problems of India. These problems have been inherited by India from more than 200 years of British colonial rule. Several programmes of poverty alleviation were started right from the start of planned economic development. • Simultaneously, policy of subsidy assisted programmes of public distribution system, supply of fertilizers, water for irrigation, electricity and petroleum products were adopted as a measure of financial assistance to the people.Several studies have proved that subsidies resulted in to the wasteful public expenditure with little success. • Dr. Arvind Subramanniyan, Principal Economic Advisor to the government, presented the concept of Universal Basic Income, in the Economic Survey 2016-17. • The Economic Survey 2016-17, claims“Universal Basic Income is a radical and compelling paradigm shift in thinking about both social justice and a productive economy. It could be to the twenty first century what civil and political rights were to the twentieth. It is premised on the idea that a just society needs to guarantee to each individual a minimum income which they can count on, and which provides the necessary material foundation for a life with access to basic goods and a life of dignity. A universal basic income is, like many rights, unconditional and universal: it requires that every person should have a right to a basic income to cover their needs, just by virtue of being citizens. • Although, the concept of Universal Basic Income is new to India, but there are evidences that it has been tried in some developed countries in the past. Conceptual Framework and UBI’s Rationality • The basic idea of a UBI is that everybody should be given a basic minimum income as an entitlement and not as compensation for work. • The idea behind Universal Basic Income lies under the following themes: Social Justice: UBI gives an idea of a just and non-exploitative society. From Tom Paine to John Rawls, nearly every theory of justice has argued that a society that fails to guarantee a decent minimum income to all citizens will fail the test of justice. Poverty Reduction: UBI is also, paradoxically, more feasible in a country like India, where it can be pegged at relatively low levels of income but still yield immense welfare gains. Agency: The poor in India have been treated as objects of government policy. . Almost all the programmes of poverty alleviation have been designed by the upper echelon of bureaucracy or the policy planners. Basic flaw of these programmes was their uniformity under which regional disparities in the availability of the resources and peculiarity of the local problems were never given a consideration. An unconditional cash transfer would treat them as agents, not subjects. UBI liberates citizens from paternalistic and clientelistic relationships with the state. By taking the individual and not the household as the unit of beneficiary. Employment: UBI could also open up new possibilities for labour markets. It creates flexibility by allowing for individuals to have partial or calibrated engagements with the labour market without fear of losing benefits. It allows for more non-exploitative bargaining since individuals will no longer be forced to accept any working conditions, just so that they can subsist. Administrative Efficiency: In India in particular,the case for UBI has been enhanced because of the weakness of existing welfare schemes which are riddled with misallocation, leakages and exclusion of the poor. When the trinity of Jan-Dhan, Aadhaar and Mobile (popularly referred to as JAM) is fully adopted the time would be ripe for a mode of delivery that is administratively more efficient. While Aadhar is designed to solve the identification problem, it cannot, on its own, solve the targeting problem. UBI is not a substitute for state capacity: it is a way of ensuring that state welfare transfers are more efficient so that the state can concentrate on other public goods. Every citizen in the country would be entitled to a periodic payment, regardless of differences in socio-economic status.From the government side, this would mean massive shift in the way it spends the revenue that it receives through taxation. An Universal Basic Income would mean the government moving away from service delivery and instead simply providing people with the money to access those services as per their choices , requirements and priorities. The basic idea is that everybody should be given a basic minimum income as entitlement and not as compensation for work. The UBI, as it is understood today, has three distinguishing characteristics: • UBI is universal and not targeted. • UBI is a cash transfer scheme in lieu of in kind transfer. • UBI is unconditional. Comparison of UBI with ongoing schemes • Economic survey 2016-17 very lucidly presented a comparative picture of UBI along with other schemes.The whole edifice of UBI rests on three basic principles i.e. (i) Universality, (ii) Unconditional, and (iii)Involves direct transfers. • The Budget proposal for 2016-17 indicates that about 950 central sector and centrally sponsored sub-schemes in India are being implemented by the Central Government .Total expenditure on these schemes is about 5 per cent of the GDP . • Economic Survey 2016-17 has questioned the effectiveness of the past and ongoing schemes of poverty alleviation, employment generation and social development on the basis of misallocation of funds. • Until now the schemes have neither been demand driven nor based on socio-economic and geographical conditions of the region for which they were proposed. Many districts in Uttar Pradesh, Bihar, Chhattisgarh, parts of Jharkhand, eastern Maharashtra, Madhya Pradesh and Karnataka, among others, account for a large share of the poor but receive a less-than- equal share of resources. • Misallocation of funds leads to exclusion of genuine poor from the programmes targeted for them . Potential Cost of UBI • At present, the average income of the population below the poverty line is about 80 per cent of TPL. So, an income supplement equal to 20 per cent of TPL, adjusted upwards suitably to compensate poor people for the subsidy elimination that would finance the programme, would go a long way towards abolishing extreme poverty.The requisite cash grant would amount to Rs. 3,500 per head per year (Rs. 17,500 per family per year) at 2014-15 prices. If the ‘Tendulkar poor’ could be perfectly targeted, the fiscal cost of bringing them up to the poverty line would be less than 1 per cent of GDP. Joshi further estimated that UBI would cost 3.5 per cent of GDP, which would be affordable, given ‘deep fiscal adjustment’.(Joshi,2016) Challenges of Implementation • Economic Survey 2016-17 assumes in clear terms that if all the existing social welfare schemes, which exerts the fiscal pressure on the exchequer, are replaced by the UBI than there will be no extra burden. • In terms of data, fiscal space for UBI is visible but in practice there is no such space because of following reasons: • It is rather impossible to stop any ongoing programme of social welfare because of the fear of unpopularity of the elected government. • Past experience shows that only the nomenclature of the programmes of poverty alleviation and employment generation changed with installation of new government. • A close nexus has developed among the corrupt politicians, bureaucrats and mafias who protects each other and share the booty generated through the misappropriation of government schemes. Possible Outcome • Dr. ArvindSubramaniyan the chief economic advisor, seems extremely enthusiastic about the positive outcome of the UBI. A statistical exercise has been presented in the Economic Survey 2016- 17 . It claims that UBI disbursement of Rs.16973 per person at 2016- 17 price can bring down Head Count Poverty Ratio zero per cent. It will cost 14.40 per cent of GDP . These projections are hypothetical and based on certain assumptions. • The real problem lies in its implementation and actual utilization of cash received by an individual who is more prone to conspicuous consumption rather than the creation of productive assets which can be useful in creating the permanent source of income. Conclusion • Universal Basic Income scheme is another borrowed idea from the west which seems ideal theoretically but is extremely difficult to implement in the socio-economic and political milieu of India where populist measures are the norms of each and every political party, either in the government or in the opposition. the UBI is not feasible in terms of proper utilization. • We fully agree with Dr. Arvind Subramaniyan, Chief Economic Advisor, GoI, that the UBI is apowerful idea whose time even if not ripe forimplementation is ripe for serious discussion.
In Re John H. Gledhill and Gloria K. Gledhill, Debtors, State Bank of Southern Utah v. John H. Gledhill and Gloria K. Gledhill, 76 F.3d 1070, 10th Cir. (1996)