Universal Basic Income in India: Examining the Arguments For and Against the Proposal

Can a Universal Basic Income Scheme be the Game Changer for the Indian Poor?

Recently, there were reports in the Indian Media about the Indian Government seriously considering introducing a minimum guaranteed income for its needy citizens and the unemployed.

Combined with the other “populist” giveaways such as Farm Loan Waivers and other forms of doles and welfare schemes, the idea of a Universal Basic Income or UBI might seem to be another form of “competitive populism” wherein political parties compete with each other and outdo each other in providing sops for the people.

However, before we dismiss the proposal for an UBI, it is worth examining the pros and cons as well as analyzes the arguments for and against the same.

Indeed, in a country such as India where Millions of people lack formal employment and where Millions more youth are entering the workforce, it makes sense for the Government to introduce UBI that can serve as a panacea to the persistent problem of lack of jobs and what more, can be a policy and a Social Experiment that can stave off mass unrest.

When one uncovers the pattern behind the many instances of mass protests in the country in the recent past, the unifying element or thread that binds them together is the youth taking to violence due to lack of job opportunities.

Thus, UBI can indeed be the game changer and the policy that would help the Indian Prime Minister and his party as well as coalition to retain power in the upcoming General Elections.

Indeed, there are insinuations already that the proposal for an UBI has been fast tracked after the recent setbacks in the Assembly elections that have made the ruling dispensation jittery.

How Does a UBI Work in Practice?

So, how does a UBI work in practice? In a way, it is like a guaranteed income every month for the jobless and the underprivileged that would ensure their livelihood in the absence of a regular income from their jobs.

Further, some form of the UBI has always been with us disguised as the MNREGA or the Mahatma Gandhi National Rural Employment Guarantee Scheme that pays the rural jobless to work in the lean months in which the seasonal Agricultural jobs are absent.

In other words, a UBI that is proposed by the present government might be a different flavor of the many schemes that are in vogue to provide succor to the poor.

Except that the proposed UBI would also cover the urban poor and the urban jobless which can be a game changer given the fact that the Precariat Class or the category of workers without formal or even structured employment leaves them Precarious and Vulnerable for exploitation as the name implies.

Indeed, there is nothing more revolutionary than weaning off the Indian Youth from the vicious cycle of urban migration since back in the villages, they cannot find work, and at the same time, the conditions of their existence in the cities is so dire that it dooms them to a perpetual trap.

Thus, properly implemented, UBI can indeed be the solution for the problem of unemployment.

The Arguments against UBI and Competitive Populism

Having said that, if the mainstream economists are to be believed, there is nothing worse than giving money to anyone without any expectation of work or jobs and hence, UBI is an idea that would only exacerbate the already precarious state of the finances of both the Central and the State governments.

Indeed, while economists such as the former Governor of the RBI (Reserve Bank of India), Raghuram Rajan, have criticized the farm loan waivers as “irresponsible” fiscal management, there is a school of thought that promotes some form of State provided assistance to the poor and the jobless.

Just that what separate the proponents and opponents of the UBI is the method of implementation and the very real threat of “leakages” that can prevent the monies from reaching the needy.

Indeed, this is the reason why many arguments for social welfare schemes center on the aspect of whether the benefits actually reach the intended recipients.

To counter this, the proponents point to how Aadhar based authentication can sidestep the threats to the successful implementation and hence, UBI can indeed be a workable solution to the chronic problems of the rural and the urban poor.

The Promise and the Perils of UBI

However, it is also the case that in the absence of any reciprocal exchange, UBI in India can easily turn into a scheme that renders the working age adults as supplicants and without any real purpose or direction in their lives.

On the other hand, the fact that the Indian Economy cannot rely on the Services Sector alone and Manufacturing and Agriculture cannot be neglected means that with automation rendering the workers in the former obsolete and the farm distress leaving the rural youth destitute, UBI might just be what the Doctor ordered as a medicine to the chronic disease of joblessness and poverty.

Having considered the pros and cons of the proposal to introduce an UBI in India, we can now state that one has to give cautious support to the idea in terms of waiting for the Nuts and Bolts of how it is supposed to work.

Conclusion

As the saying goes, the Devil is in the Details and hence, any radical proposal such as the UBI should be embraced or supported only after the entire policy is made available for discussion and debate.

To conclude, with elections around the corner, it would be tempting for politicians to promise the moon and hence, any populist proposal must be thoroughly debated before making it into a codified law.