budget 2017

What is UBI?

  1. Universal Basic Income or UBI is a concept which means that the state (government) would pay all of its citizens a fixed basic income for subsistence. If UBI scheme gets launched, other benefits like PDS or NREGA would not be given.
  2. In MNREGA there have been leakages and the PDS again is riddled with corruption. The government needs to think if it is better to put money directly into individual accounts and do away with PDS, MNREGA.
  3. The focus would be to put resources generated through taxes and penalties in UBI.

Why?

  1. To fight poverty, child labour and hunger.
  2. To counter the loss of jobs due to rise in automation and robotics. Demonetization have also affected a large number of people.
  3. To reduce inequality.
  4. A basic support would help to increase the level of learning, school attendance, decrease dropouts, and also promote innovation.
  5. Additional income would increase the demand and hence additional boost to manufacturing and services. Hence more tax revenues as well.
  6. Better Human development, HDI and other development indices.
  7. Low government expenditures on health, education, less corruption due to elimination of NREGA like schemes, means less wastages etc.

Is it possible?

  1. The government is additionally rich by collections due to Income disclosure scheme which added Rs. 62000 crores.
  2. Jan Dhan yojana and post demonetization push towards banking have made it easier to transfer money directly to the account of the beneficiaries.
  3. BHIM types app have added to the ease.
  4. The scrapping of the schemes like PDS, NREGA would cut the government economic burden which would contribute towards the success of UBI.

Way forward

  1. The government must be looking for UBI, more so after the demonetization which have hurt the poor and the unorganized sector the most.
  2. UBI may also be a political tool to pacify the people’s anger post demonetization.
  3. Calculating the layout burden due to UBI before actual implementation is must.