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Meaning of Universal Basic Income (UBI)
In its purest form, a basic income is an
unconditional, periodic cash payment that the government makes to everyone. It is not based on means-testing: A hedge fund manager and a homeless person receive the same amount. It has no strings attached, meaning it carries no
requirements to work, attend school, receive vaccines, register for military service, or vote. It is not paid in kind—housing, food—or in vouchers. It is a fl oor below which no one’s cash income can fall.
Need for UBI at this time
A tool to eradicate poverty
! UBI is deliberated as an effective poverty-eradication tool. Supporters of this scheme include Economics Nobel Laureates Peter Diamond and Christopher Pissarides, and tech leaders Mark Zuckerberg and Elon Musk.! UBI in its true sense would entail the provision of an unconditional fi xed amount to every citizen in a country. Nevertheless, countries across the world, including Kenya, Brazil, Finland, and Switzerland, have bought into this concept and have begun controlled UBI pilots to supplement their population.
! India’s huge capacity and infrastructure-building requirements will support plenty of hands in the foreseeable future. Nonetheless, even before the pandemic, India was struggling to fi nd enough opportunities for more than a million job aspirants who were entering the job market each month.
! The 2016-17 Economic Survey and the
International Monetary Fund (IMF) had
proposed quasi-basic income schemes that leave out the well-off top quartile of the population as an effective means of alleviating poverty and hunger. The fi scal cost of a UBI pegged at ` 7,620, at 75% universality, was 4.9% of the GDP. A UBI on par with the numbers suggested by the Economic Survey could lead to targeted household incomes increasing by almost ` 40,000 per annum since the average Indian household size is approximately five.
Different times
! The times now are very different. IMF has projected global growth in 2020 to be -3.0%, the worst since the Great Depression. India is projected to grow at 1.9%. The U.S. economy is expected to fall by 5.9%.
! The unemployment rate and unemployment claims in the U.S., since President Donald Trump declared a national emergency, are the highestsince the Great Depression. Unfortunately, India does not even have comparable data.
! Lockdowns in some formats are expected to be the norm till the arrival of a vaccine. With almost 90% of India’s workforce in the informal sector without minimum wages or social security, micro-level circumstances will be worse in India than anywhere else.
! The frequent sight of several thousands of migrant laborers undertaking perilous journeys on foot in inhumane conditions is a disgraceful blight on India. One way to ensure their sustenance throughout these trying times is the introduction of unconditional regular paychecks at maximum universality, at least till the economy normalizes
