Mahatma Gandhi, the father of our nation, was a very benevolent and expert political master and observer that he had a great vision for the country. He was a man who fought for the upliftment of the poorer classes of society and thought of reforms in their favour. Years have rolled by, and in today’s era of economic disparities amidst well being among certain sections, a transformation is well sought after.
The idea of Universal Basic Income
Our country and its culture are a tad-bit different from its roots when compared with western culture. The west is famous for its upscale levels of technology zooms and automation. That directly means a lesser need for skilled manpower in the job sectors.
But that cannot be implied in our country. We as a country require skilled manpower in every facet of jobs though many areas have undergone unexpected levels of automation. We can now move to a broader meaning and sense of what universal basic income (UBI) means.
To sustain a livelihood, any family small or big struggler toils hard and works to get an income to support themselves. We can easily see a range of disparities when it comes to income groups in our country. On the one hand, we have the elite groups having more than sufficient income to support themselves and to many more forthcoming generations in the future.
The universal basic income or UBI is not aimed at these classes at all. It is the poorer sections or let us say poverty-stricken classes or daily wage labourers that bear the brunt of any reforms in the society. The UBI scheme is aimed at uplifting these sections of society to help them gain minimum income support to sustain a reasonably comfortable livelihood.
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Two Facets of Universal Basic Income
In the hindsight of UBI, the opinions are split amongst two sections or two different mindsets of societies. One section believes that a universal basic income is advocated exclusively to the farming community or farmers with agriculture as their primary occupation. On the other hand, there is another group of thinkers who feel that this scheme might become a non UBI scheme if implemented.
So, an income support scheme that will uniformly later to all income groups like the UBI is a better idea in some minds. On the contrary, since the UBI is also aimed at bettering the lives of poorer sections of society, a non UBI scheme is also not bad if properly implemented.
Drawing inspiration from similar schemes
The state of Telangana advocated the Rythu Bandhu Scheme, which also acted as a precursor to the UBI scheme. The owner of the land is given support money of INR 4000 every season for every acre to help him with his farming activities. The government supports the investment that he made for his farming by this money.
But this scheme also has a catch. The owner of the land is given the support income, but he tillers or the tenants are not guaranteed any basic income. It is upto the owner to decide whether he can give the amount to them or not.
This was a model implementation of the UBI scheme, but since it targeted the farming industry alone, it can be prominently grouped under the non UBI scheme as well.
UBI in the face of government subsidies
The question of whether UBI is better when compared to a host of government, especially state government offered subsidies, remains a point to ponder. Farm loan waivers are a form of subsidy offers given by most of the state governments in their respective states. Many other similar subsidies are offered to help poor farmers do agriculture without having to worry about the burden they carry on their heads.
Sometimes, a farmer spends an entire lifetime trying to repay the loan that probably he or another member of his family incurred during their lifetime. To repay the loan, they need support systems that farmers lack in general.
When the current government offers subsidised rates of interest on loans or a full waiver, it acts as a boon but offers only temporary relief. To set up a better livelihood or a support structure that enables them to lead a life guaranteed with the minimum basics, a UBI scheme is worth bringing on the anvil.
The UBI scheme has certain issues when reaching out to the target beneficiaries. When the government announces a loan waiver in a fiscal year, whenever he has applied for the loan is the direct beneficiary, and he can rest be assured that the burden of loan is away from his head for a certain period of time. But a scheme like UBI is not easy to establish and implement.
The identification of the rightful beneficiaries is the most important and critical task. If we conform to Aadhaar card dependency to do this task, the issue looms large, and deeper complications give way. Aadhaar numbers are surely the best way to identify an individual, but where is the aspect of grouping him based on his social conditions.
If UBI is targeted at the poor, the relativity of the Aadhaar linked identification system becomes irrelevant. In a broader sense, a classification system that helps to give wings to UBI must be first established.
UBI and Poverty
The society would certainly see a major upliftment when it comes to a minimum guarantee of salary for the required beneficiary. Sources and studies suggest that if the UBI scheme is implemented correctly, by tackling bottlenecks and hindrances at the fore, the poverty rate of our country could come down to a basic level of 0.5%.
However, on the flip side, we cannot ignore the cost the exchequer has to pay if a scheme like UBI is implemented. We see the distribution of ration cards to the economically poor classes of society as a measure of welfare from the government. Such subsidies are meant to help the poor attain a livelihood, but at cheaper or lesser rates then what would otherwise be granted outside.
So for farmers, it could mean direct subsidies on their fertilisers and farm equipment, reduction in seed rates, and food. All these put together, the subsidy allocation for petroleum, food, and fertilisers cost the government an approximate 30% of the total GDP allocation, exclusively for UBI.
Around 4 to 5% of allocation could easily go the UBI expenditures if we implemented that in our country. There are certain points at this level, as well. The cream of the population estimated at around 25% of the total population not included in this group. They are exempt from UBI. The poorer sections, lower and middle-class groups, are the only ones considered.
UBI, in other terms, can be considered as a simple antidote to poverty. The need of the hour is to cut down on complex and sophisticated welfare bureaucracies while ensuring social decorum of the country is maintained without any disturbance to it. As we already know that such a scheme could easily eat up 5% of the GDP allocation, economic thinkers, experts, and public opinion should be pooled in before taking decisive action on its implementation.
It is not to be forgotten that the wealth generator or source provider for UBI comes partly from the withheld funds for subsidies not allocated to the cream of the population. It is also garnered with the tax collection from the common man, so a distribution justice can easily set in amidst such an economic scenario.
A model for successful UBI
During the fiscal year 2016-2017, an economic survey was taken under the able leadership of finance minister Shri. Arun Jaitley to discuss current economic standings of the country. The findings of this study were then brought up in the parliament proceedings in the same year. According to the survey, the successful implementation of UBI depended on two important factors.
That is, the relevance of UBI stands on these two factors:
(i) The presence of Jan Dhan Account, linked with a personal mobile number and Aadhaar number.
(ii) The cooperation between individual states and the centre in carrying out the scheme successfully.
Elaborating further on this aspect, the validation of poorer members of the society can be credited to their Jan Dhan accounts. These accounts, linked with their mobile numbers and a valid Aadhaar number can serve the requirement for a transfer of UBI into their accounts.
So, it calls for poorer classes to hold Jan Dhan Accounts for the purpose compulsorily. This could act as a great stepping stone towards digitizing India and a spirally zooming initiative to fast forward India economically.
The massive carry-over responsibility in this regard lies with the state heads. When the government mulls such an important initiative, the issue of primary importance is the sharing of cost between individual states and the centre. The central leadership can hold talks and negotiations with state representatives to address the issue and arrive at a cost-sharing factor that acts good on both sides.
The centre should support states in terms of the necessary infrastructure and technology requirements in order to ensure every member of the poorer classes holds a Jan Dhan account and is further linked to their Aadhaar number and personal mobile number.
Of late, UBI is being mooted as a constitutional right. Amongst the several rights being laid out in the constitution for citizens, this could also find addition in the list. Sikkim is all set to become the front runner state in implementing the UBI model and bring all its provisions in place. The right of every citizen to be able to reach out to a guaranteed basic minimum income could soon be a reality.
In a primary social scenario, we find the poor becoming poorer and the rich becoming more richer by the day. Creating a balance in this regard by ensuring social justice to everyone is the first step towards a better future for our country.
The Narendra Modi led government, which came into power in 2014 has changed the social scene of the country to a large extent. Schemes like UBI, which can alter the livelihoods of many, could soon become a reality if implemented at the right pace.
Resource redirection from already allocated subsidies could act as the basic source of UBI wealth generation. Such a scheme should not make people sit at homes without feeling the need to work. This could also a distributive type of economic scenario, creating injustice ratification’s amongst different social classes, including violence and non-acceptance of the UBI scheme.