Open Forum
New Delhi, 16 February 2017
Universal Basic
Income
PEEP INTO DREAM
WORLD
By Dr S Saraswathi
(Former Director,
ICSSR, New Delhi)
An exceedingly important proposal in the Economic Survey to
introduce a new scheme to guarantee Universal Basic Income (UBI) to every
citizen seems to have a favourable climate for experimentation in India. Known by
various names, it was discussed in many countries all over the world but mostly
dropped as impracticable.
At least, it cannot be denied that the time is ripe to
initiate discussions as claimed by the Government if not for immediate
implementation. For, the present “subsidies raj” is not without defects in the
details of schemes or manner of implementation.
Importantly, the Economic Survey has devoted a whole chapter
of 40 pages to this subject. Union Finance Minister Arun Jaitley calls it a
“powerful idea” and the Government finds it feasible. It is intended as a
substitute to a number of existing welfare schemes and subsidies and not
addition. Governments both at the Centre and States are fast developing as
administrators of subsidies which now constitute the principal poverty
alleviation and minimum livelihood guarantee instrument.
The Survey reports of gross mismatch existing between
financial allocations and actual needs across districts due to varying
capacities of States, and suggest that the poor should be directly helped with
guaranteed basic income. The UBI draws inspiration from Mahatma Gandhi’s ideal
of fighting poverty and worshipping labour simultaneously. “No labour, no meal” – the ideal of Gandhiji
has been quoted to end the regime of subsidies. Misplaced charity, in
Gandhiji’s thinking, adds nothing to the wealth of the country, whether
material or spiritual, and gives a false sense of meritoriousness of the
donor”. Instead, he suggested healthy food in clean surrounding in return for
work.
The Economic Survey quotes Gandhiji to bring home the point
that subsidies only encourage laziness. Yet, the UBI is based on three
principles -- universality, unconditionality and agency. It means unconditional transfer of income
to every citizen without discrimination and without any condition whatsoever
including work in return. The recipient is an individual and not a family or
household and the receiver is not expected to do some service to earn it. The
apparent contradiction between Gandhiji’s emphasis on work and Government’s
emphasis on basic income is a bit baffling, but the moot point is the context
of growing subsidies in which the proposal has come.
What has prompted the Government to think of such a huge
scheme is the big question. Is it advisable to cover the rich and mighty, who
control many resources for whom the UBI may not be enough to cover even a day’s
expenses? Is it workable in a vast country with a population of 1.3 billion?
Will the State Governments and regional parties be willing to give up a sure
way of establishing their popularity with the masses that now exists in the
regime of subsidies? Will it not increase unemployment by closing thousands of
agencies now engaged in administering various welfare schemes? What if it fails
and we revert to subsidies thus proving “Tughlakian” mindset?
Sure, the Government cannot be unaware of these and many
more questions on the scheme and almost insuperable problems in implementation.
However, the time is ripe for a thorough discussion of this subject, which is
being discussed in many countries including the affluent.
It has been estimated the UBI that reduces poverty to 0.5
per cent of the GDP (assuming that top 25 per cent income bracket do not
participate) would cost between four and five per cent of the GDP. Presently, the estimated cost of middle class
subsidies and food, petroleum and fertilizer subsidies is about 3 per cent of
the GDP. The difference not being substantial, there is reason to consider the
idea.
The UBI, it is said, “liberates citizens from paternalistic
and clientelistic relationships with the State” under the system of subsidies,
and empowers women by taking the individual as the unit and not the household.
Leakages, corruption, and misallocation possible in targeted welfare schemes
can be eliminated in universal system.
One may look back to Thomas More’s (1478-1535) “Utopia”
which speaks of minimum income. Thomas
Paine (1737-1809) and Thomas Spence (1750-1814), original advocates of basic
income, claim this as a right of all citizens like the individual’s right to
existence. Paine elaborates that every person is entitled to a share in the
returns on the common property of humanity –land, and other natural resources,
which today include even spectrum. The concept of social security to workers
was advocated by him. Capital grants were to be paid to every person on
attaining the age of 21 years.
UBI is known by various names in different countries. The
common feature is its universality, regularity, and unconditionality. What
sounds like a communist ideology, is also an idea prevalent in capitalist
countries and practised in different forms like graded tax system, social
security, and subsidies.
The term “social dividend” has come into vogue to refer to
the individual’s share of the capital and natural resources owned by the
society. Basic income, a term used since mid-1980s in the place of “social
dividend”, is the form of distributing individual shares of community owned
resources.
Discussions on basic income started in the developed
countries of the US and Canada in the 1960s and in Europe
in the 1970s. Gradually, it spread to Latin America, Middle East, and some
countries of Africa and Asia. Opinion polls
indicate majority support for the idea in Europe.
In the US,
in 1969, President Richard Nixon proposed a scheme of “Family Assistance
Programme” to guarantee a certain minimum income to every family. The Alaska
Permanent Fund is said to be a partial basic income scheme started in 1982.
Universal Basic Income is advocated by the Green Party in the US in 2010 to
every adult regardless of health, employment or marital status “in order to
minimise government bureaucracy and intrusiveness into people’s lives”.
Brazil adopted the Natural and Universal
Basic Income Law in 2004 and started its implementation with the most needy. Switzerland
conducted a referendum on this subject, but decisively rejected the idea by 77
per cent of votes.
In India, a pilot scheme was conducted in eight villages in
Madhya Pradesh in 2011 starting with payment of Rs 200 per month to every adult and Rs 100 to every child and
increasing it to Rs 300 and Rs 150 respectively. It was reported to be a
successful experiment giving many positive results like improvement in
nutrition, school attendance, small-scale enterprises, and reduction in debt burden
of the poor.
For successful functioning of the UBI system, bank account,
Aadhaar card for identification and mobile connectivity are required for every
person. The Union and State governments have
to agree on the pattern of sharing the cost – a requisite difficult to fulfil
in view of the popularity of subsidies and freebies.
The UBI scheme, while guaranteeing minimum income cannot
stall unmanageable unemployment that will result from closure of offices
administering welfare schemes like PDS or MGNREGA. Above all, the poor have to
learn to take the system as an aid to improve their standard of living and not
as a pension for idle life. Who will teach them?---INFA
(Copyright,
India News and Feature Alliance)
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