{"id":2642,"date":"2019-01-15T11:07:26","date_gmt":"2019-01-15T05:37:26","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=2642"},"modified":"2019-01-15T11:07:28","modified_gmt":"2019-01-15T05:37:28","slug":"is-india-ready-for-a-universal-basic-income","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/is-india-ready-for-a-universal-basic-income\/","title":{"rendered":"Is India ready for a universal basic income?"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Relevant for Sociology,  GS &amp; Essay:-<\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>New Delhi:<\/strong>\u00a0The idea of a universal basic income has gained currency in the West because of the threat of automation-induced job losses. In India, the idea first gained currency as a solution to chronic poverty and government\u2019s failure to effectively target subsidies towards the poor. <\/li><li> Amid persistent\u00a0farm distress and weak wage growth\u00a0across occupations, the idea of an income support scheme seems to be gaining ground once again. Some advocate an\u00a0income support scheme for farmers\u00a0while others advocate a\u00a0broader income support for all\u00a0. <\/li><li> Still others, such as the former\u00a0chief economic adviser Arvind Subramanian\u00a0favour an income support scheme targeted towards the poor, that is, a non-universal basic income. <\/li><li> The idea of an income support scheme for farmers draws from the\u00a0Rythu Bandhu scheme\u00a0initiated by he Telangana government which may have helped the Telangana Rashtra Samithi (TRS) government storm back to power. Unlike farm loan waivers or minimum support prices for specific crops, a Rythu Bandhu-type income support scheme does not damage credit culture or distort markets. However, the Rythu Bandhu scheme excludes tenant croppers who consist of around 13.7% of farm holdings all across India. <\/li><li> Under Rythu Bandhu, the government provides \u20b94,000 per acre per season to support farm investment and it is up to the landlord to pass on the benefit to the tenants. Even in its current form, extending the scheme across India will cost a prohibitively high amount of \u20b93.1 trillion in one year alone. Viewed over the period of five years\u2014the term of one government in India\u2014a Rythu Bandhu-type scheme would cost much more than the farm loan waivers recently announced across states. Moreover, such a farmer-specific scheme might encourage people to remain tied to agriculture, a relatively less productive sector of the economy. <\/li><li> Compared to a farmer-centric scheme, universal basic income holds greater appeal as it does not discriminate based on occupation or land ownership, and does not depend on accuracy of targeting to work. But the challenge with universal basic income is the prohibitive costs associated with it. Providing all individuals with a poverty line-equivalent universal basic income (\u20b91,180 per month for each individual, in 2017-18 prices) would cost around \u20b919 trillion or 11.4% of gross domestic product (GDP). This would be 50% more than centre\u2019s total tax revenues, and would certainly not be sustainable. <\/li><li> However, even much lower levels of universal basic income might suffice in improving the lives of the poor. For instance,\u00a0a 2011 study\u00a0by United Nations International Children\u2019s Emergency Fund (UNICEF) and the Self Employed Women\u2019s Association (Sewa) in rural Madhya Pradesh showed that providing \u20b9300 per month to each adult and \u20b9150 to each child can make a big difference to the lives of the poor. In 2017-18 prices, it amounts to around \u20b918,000 per year for a family of five: two adults and three children. <\/li><li> A similar amount, \u20b916,000 per year to a household of five, has been suggested by the renowned development economist Pranab Bardhan. Such a universal basic income support (universal basic income) would cost around \u20b94.3 trillion or 2.6% of GDP. <\/li><li> Even such a scheme is feasible only if the centre trims current subsidy and welfare expenditure. Some of these schemes including the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) are often deemed to be leaky and poorly targeted although opinion among economists is divided on this issue. Some think that these schemes are beyond redemption and should be replaced by a\u00a0guaranteed income\u00a0while others consider schemes such as MGNREGA to be\u00a0better alternatives\u00a0to universal basic income, if only targeting could be improved. <\/li><li> The various schemes of the central government, which can potentially make way for a universal basic incomes together amount to around 3% of GDP, including food subsidy under the public distribution system (0.84% of GDP), MGNREGS (0.33% of GDP), fertilizer subsidy (0.4% of GDP), petroleum subsidy (0.15%), and miscellaneous subsidies and revenue foregone due to tax exemptions. Given that the withdrawal of state support across so many sectors could be highly disruptive, some economists advocate a partial and gradual withdrawal. <\/li><li> The development economist Reetika Khera has suggested that the move towards universal basic income should start with a\u00a0\u2018universal\u2019 pension\u00a0of \u20b91,000 per month to the easily identifiable groups of elderly, widowed, and disabled . Additionally, the government should ensure maternity entitlements of \u20b96,000 per child. Such a scheme would cost a relatively manageable 1.3% of GDP. <\/li><li> It is little wonder that in a quasi-federal democracy such as ours, state governments have taken the lead in starting different varieties of income support schemes. However, it is worth keeping in mind that several state governments do not have the fiscal space to launch even a watered-down version of a basic income support scheme. <\/li><li> What form an\u00a0income support scheme\u00a0eventually takes will ultimately depend as much on economic motivations as on political ones. But regardless of the form it takes, the idea of an income support scheme or direct cash transfers is here to stay for some time. Two of India\u2019s former chief economic advisers\u2014Kaushik Basu and Arvind Subramanian\u2014can take some credit for that. <\/li><\/ul>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Relevant for Sociology, GS &amp; Essay:- New Delhi:\u00a0The idea of a universal basic income has gained currency in the West<\/p>\n","protected":false},"author":1,"featured_media":882,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[123,110,18],"tags":[817,390],"class_list":["post-2642","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","category-essay","category-general-studies-ii","tag-gs","tag-upsc"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/2642","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/comments?post=2642"}],"version-history":[{"count":1,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/2642\/revisions"}],"predecessor-version":[{"id":2643,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/2642\/revisions\/2643"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media\/882"}],"wp:attachment":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media?parent=2642"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/categories?post=2642"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/tags?post=2642"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}