All you wanted to know about universal basic income

Automation is admirable as long as it saves you work. But the moment it starts stealing jobs across sectors, it spells danger. But some policymakers are saying, “So what? Let’s ensure universal basic income for everyone.”

In simple language, universal basic income refers to an unconditional minimum income paid by a government to all its citizens. As a part of a social experiment, the Finnish government will shortly be handing out money for free to 2000 jobless people. This will be done over a two-year trial period, and the willingness of these white and blue collar unemployed to participate in the labour market will be observed. If it works, the scheme will be continued.

A similar policy to hand out 2500 and 625 Swiss francs to every adult and child, irrespective of their employment status, was considered by Switzerland and put to popular vote recently. But it was summarily rejected by citizens.

In India, ill-targeted subsidies on food, agriculture and gasoline have led to leakages and corruption. Despite more than 4 per cent of the GDP being spent every year on them, the fact that these subsidies seldom reach a citizen at the bottom of the pyramid is well documented. So should India move to UBI?

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) runs on similar lines as the UBI. It has guaranteed a minimum of 100 days’ employment every year, for at least one person from every rural household.

But the performance of MNREGS reported through various audits and analyses is discouraging. According to a report by the Accountability Initiative, Centre for Policy Research, the total number of households that actually managed to fulfil the guaranteed 100 days’ employment condition was just 10 per cent in 2013-14. This dropped to 3 per cent in 2014-15. Moreover, the average person-days of work per household dropped from 46 days in 2013-14 to 35 in 2014-15.

Now, the increasing use of automation is making many jobs redundant. Machines are able to perform far more precisely and efficiently, and at a lower cost. But automation creates a new set of problems. Employment gives people a respectable social standing and a degree of pride in the community. Besides, political systems are formed based on the promise of job growth and hopes of a better future. Lack of job growth and higher inequality in the society can lead to possible social unrest.

UBI, which can at least take care of a person’s food and shelter, is expected to mitigate this economic and social uncertainty to some degree.

If you are involved in any kind of routine, process-oriented job, there is a possibility that your current job may be automated in a few years’ time. Besides, the digital revolution, artificial intelligence and robotics may make inroads into available jobs.

According to UN – Population Division estimates, India’s population is expected to rise to 1.5 billion by 2030. With close to 55 per cent of Indians expected to be in the working age population in 2030, managing economic expectations is going to be quite hard with slow job creation. Besides, if your child is 10 years old, she/he may have to compete for a smaller pie in the labour market 15 years from now.

Keep your fingers crossed and hope for UBI to become a reality.

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