Budget 2017: Will Arun Jaitley opt for Universal Basic Income?
- Days before the Union budget which will be presented in the backdrop of disruptions caused by the demonetisation drive, the Jammu and Kashmir (J&K) government became the first to commit to a Universal Basic Income for all citizens living below the poverty line by providing direct benefit transfers.
- J&K finance minister Haseeb Drabu said he would want to create a social security fund and provide a “Universal Basic Income” to all those living “below the poverty line” through a direct benefit transfer system.
- However, what is more interesting is Drabu putting the onus on the Central government for initiating the process to implement UBI in the state.
- While the reasons for providing UBI in Western countries, where the idea was originally developed, are stagnant wages and an effective demand collapse, in India, the issue at hand is providing financial security to the poor.
- Switzerland recently rejected a proposal in a referendum to guarantee every adult citizen and long-term resident 2,500 Swiss francs (around Rs1.7 lakh) per month, while Finland is set to experiment with the idea on a pilot basis.
- N.C. Saxena supported the idea behind UBI, but said that to target right beneficiaries and find the fund for it is a difficult task.
- Even if government guarantees Rs.1,000 for people below poverty line, it will cost the exchequer Rs.60,000 crore a year.
- The UBI should not replace all existing social sector schemes. If the government signals gradual withdrawal of social sector schemes while implementing the UBI, it will also defeat the purpose.