14th JANUARY 2019
GS II: SOCIAL
Q1. Discuss the benefits of providing a basic income to all citizens of India. What steps must be taken for successful implementation of the Basic Income Scheme?
Basic Income would prove beneficial in the following ways:
- Everybody in the community, and not just select people, receive their own individual transfer. Nutrition will improve, sanitation will improve, health and health care will improve, school attendance and performance will improve, women’s status and well-being will improve, the position of the disabled and vulnerable groups will improve by more than others. And the amount and quality of work will improve. The basic incomes will improve the community spirit and were emancipatory.
- In the 2017 Economic Report tabled by the government there is a chapter on how a basic income could be rolled out across India, and is affordable. Its main author, former Chief Economic Adviser Arvind Subramanian, and others such as Professor Pranab Bardhan have proposed ways of paying for it — primarily by rolling back existing wasteful, distortionary, and mostly regressive subsidies.
- The international debate on basic income has advanced considerably in the past five years. Experiments have been launched in countries of different levels of per capita income, which include Canada, Finland, Kenya, Namibia, the Netherlands, Spain and the U.S., with plans being drawn up in England, Scotland, South Korea and elsewhere. India could take the lead. It has the technological capacity, the financial resources and, above all, the need for a simple, transparent scheme to liberate the energies of the masses now mired in economic insecurity, deprivation and degradation.
- The implementation of basic income will be a serious but manageable challenge. It will require goodwill, integrity, knowledge and humility about what will be inevitable mistakes. If properly planned, it is possible to introduce a comprehensive scheme even in rural or urban low-income communities, without too much cost. But it is essential to obtain local cooperation and awareness at the outset, and the backing of key local institutions. It is strongly recommended that if the government is to go ahead, it should phase in the scheme gradually, rolling it out from low-income to higher-income communities, after local officials have been trained and prepared.
- It is also recommended that the authorities should not select particular types of individuals and give it only to them. It is tempting to say it should go only to women, low-income farmers, or vulnerable social groups. That would be wrong. It would involve expensive and corruptible procedures, and risk evoking resentment in those arbitrarily excluded, who would probably be equally in need, perhaps more so. The same applies to means-testing targeting. That would be a terrible mistake, for the many reasons reiterated in a recent book on basic income.
- The contrast is bound to be made with the promise of farm loan waivers. No doubt this policy would lessen the burden on a hard-pressed social group, and lessen rural poverty, but it is a populist measure. It will be popular, but will not alter structures and is bad economics.
- In the long term, financial institutions would be less likely to extend loans to small-scale farmers. Is that the aim? If the loans were made on fair rules, it would be better to enable the debtors to pay them back less onerously. That is why a basic income would be a more equitable and economically rational way of addressing what is undoubtedly an unfolding rural tragedy.
The beauty of moving towards a modest basic income would be that all groups would gain. That would not preclude special additional support for those with special needs, nor be any threat to a progressive welfare state in the longterm. It would merely be an anchor of a 21st century income distribution system. Will the politicians show the will to implement it? We need to see