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Source-This post on Universal Basic Income has been created based on the article “Universal Basic Income can’t end Indian poverty” published in “Live Mint” on 25 April 2024.
UPSC Syllabus-GS Paper-3– Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Context– The article discusses the feasibility of implementing UBI in India. This comes in the backdrop of heated exchange between the ruling party and main opposition party over redistributing wealth from the rich to the poor.
What is Universal Basic Income (UBI) and how has it originated?
It involves direct cash transfers from the government to all citizens without any conditions. This was first proposed by American revolutionary Thomas Paine and later refined by English writer Thomas Spence in 1797. The central government’s PM-Kisan scheme of cash transfers to farmers draws inspiration from this concept.
What are the potential benefits of Universal Basic Income (UBI)?
1) Short term– It can address issues like farm distress, stagnant rural wages, rising household debt, and weak consumer demand among the poor.
2) Short term– It can address issues like farm distress, stagnant rural wages, rising household debt, and weak consumer demand among the poor.
3) Financial Viability– Providing UBI to the poorest 40 million households would cost around ₹4 trillion (1.2% of GDP), which is financially viable.
4) Importance of direct support– The fact that the government considers COVID food handouts necessary shows the importance of direct support.
What are the limitations of Universal Basic Income?
UBI alone will not be able to end poverty if there is a lack of access to essentials like law and order, clean water, healthcare, and education in rural areas.
A more detailed article on UBI can be read here.
What should be the way forward?
1) Enabling ordinary people to engage in politics and fostering a sense of citizenship with rights and dignity is crucial. This generates a demand for better education, healthcare, and skill development, which increases income and helps lift people out of poverty. For ex-land reforms in certain parts of India decades ago demonstrate this effect.
2) There should be focus on empowering individuals by drawing inspiration from Indias freedom movement.
Conclusion– UBI has been tested in various places globally, but it hasn’t been a complete success anywhere. In India, giving regular cash payments could provide immediate help to the poor. However, to truly overcome poverty, it’s important to remove the barriers that restrict individuals from realizing their true potential. While UBI may seem appealing as a policy, it’s not a quick fix to end poverty forever.
Question for practice
Critically analyze the significance of UBI for India?
