Universal basic income(UBI)

Gandhi would have been conflicted by UBI. He wanted every citizen to be guided by inclusive development but he was also worried bout the laziness, hypocrisy & crime that would  increase due to giving of doles.

UBI has three components: universality (no exclusion), no conditionality &  agency to the people( to make choices where to spend money not determined by the state). It is proposal to reduce poverty by tackling with the problem of misallocation, exclusion & leakage of resources which is massive in the present welfare schemes. it incentives high skilled work by insuring buffer money during search for jobs. laziness isn’t consequence of UBI, becoz the money given would be minimal & work is generally associated not purely  with necessity but also with dignity, self-reliance etc. This step is an affirmation of the idea of social justice where certain economic security is provided to every person in  the society.

There r some important concerns with UBI. It is considered that it will give rise to consumption of vice goods like tobacco etc. but nss data suggests that with higher consumption levels, the share of these goods reduces. the pilot project in m.p further gives evidence that expenditure from UBI is mostly in productive activities( better seeds, Fertilizers etc). Dreze says  that cash transfers will be subject to erosion by inflation. This concern is remedied by indexing for inflation & also the proposal by Debraj ray (calculating Universal income as proportion to GDP). Practically the fiscal costs to be gathered for this scheme is quite prohibitive. The survey estimates the cost to be round 5% of the GDP. how will it be made feasible, when India’s tax/GDP ratio is one of the lowest in the world, there r subsidies to the rich, tax exemptions etc?. there r some legitimate questions being rised by scholars that UBI is not being considered  redistributive, but means of pulling back of state from the welfare sphere( cutting of subsidies).There needs to be some form of exclusion of the well-off sections  by self-verification,voluntary giving up etc. For its gradual introduction, there r some proposals which focus on women, urban regions etc then extending it to other citizens. there is an urgent need to work rigorously on the access to banking facility & their usage by the poorer sections along with addressing the concerns of breach of privacy & cyber security issues.

UBI is conceptually sound, but needs clear vision of redistribution, well thought out design, funding & implementation to  actually make a severe dent on poverty in india.








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