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Is Universal Basic Income A Good Idea?

Mr. C.S. Sudheer | Posted On Wednesday, February 08,2017, 02:39 PM

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Is Universal Basic Income A Good Idea?



The West is facing problems, long associated with poor countries…. Unemployment…. Yes, many citizens of USA, UK and other advanced countries, are losing jobs to automation, disruptive technologies and robotisation. The Governments of France and Finland are looking at a novel idea called universal basic income (UBI), to solve this problem. This is a scheme which guarantees every citizen of the country, a basic minimum income to support themselves.

Now, India is looking at this novel concept called universal basic income for an entirely different reason. A number of schemes are run by the Central Government, to give subsidies to the poor. Whether this money actually reaches the poor….It’s difficult to tell. Can universal basic income, be a better way for the poor of the country, to get the subsidies they so badly need? Let’s find out.

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What is Universal Basic Income?

Universal basic income also called UBI, is a sum of money given by the Government to all citizens of the country, to take care of the bare necessities of life. This is like a safety net, which makes sure no citizen falls below a basic minimum standard of living. This idea was featured in the Economic survey, which was released before Union Budget 2017.

Why Universal Basic Income?

Many of our citizens are poor and need subsidies to survive. The problem….This money never reaches the intended beneficiaries.  There is leakage and pilferage and money reaches middlemen and the Rich. The Poor remain Poor. The Rich become Rich.

To solve this problem, the Government opted for direct benefit transfer called DBT, where money is transferred directly to the beneficiaries’ bank accounts, which are linked to the Aadhaar  for identification. There’s no doubt this is a great scheme, as it stops pilferage of money to a great extent. Now, the universal basic income can be better than direct benefit transfer. This is because of universality of universal basic income. The Government does not need to waste money and time, identifying beneficiaries for the direct benefit transfer. Under universal basic income, every citizen of India, gets a basic income.

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Can Universal Basic Income Succeed in India?

It is widely believed that universal basic income should provide an income, which is equal to the poverty line. According to this, every citizen of the country should get about INR 1,090 a month. The total cost of providing this income to all citizens , would be equal to nearly the size of the Union Budget.

But there’s a ray of hope. A pilot study had been conducted by UNICEF and Self Employed Women’s Association in a few villages in Madhya Pradesh, way back in 2011. The results of this study….The income provided under universal basic income, does not necessarily have to match the poverty line. Just a monthly unconditional grant of INR 300 to every adult and INR 150 to every child, can really improve their lives. Yes, Universal basic account has a great chance of success.

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