Let’s have universal basic income

The Economic Survey and the Budget may have something to offer by way of a universal basic income for all citizens. NITI Aayog CEO Amitabh Kant recently said that the Centre was exploring the idea. UBI has been supported by economists on both the Right and the Left. The former argues that direct transfers such as UBI are a better bet than leaky subsidies on inputs and services. The Left, however, fears UBI could become an excuse to squeeze PDS, MGNREGS, health and education. There is a third way — raising the direct tax to GDP ratio and getting rid of unproductive non-welfare spending so that UBI does not supplant welfare schemes.

UBI was debated at the WEF in Davos, as a response to alarming inequality the world over. India, with its sub-Saharan health indices, literacy rates and rising inequality, is a fit case for UBI. The UBI is perhaps being seen as a safety net in the context of the inability of the economy to generate jobs. Even as one million people enter the workforce every month, Labour Bureau figures point to a steep decline in job creation. While creating the budgetary space for UBI, the Centre could also revisit the Unorganised Workers’ Social Security Act, passed by Parliament in December 2008. Eight years later, the chasm between the organised and unorganised sector has widened. The legislation lays out a plan for providing health insurance, life insurance and pension cover to 300 million informal sector workers, where the employee, employer and the government are to contribute ₹1 a day. This scheme can be improved. Along with UBI, it can lift the lives of the marginalised millions.

A Srinivas Senior Deputy Editor

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