What is the issue?
- The union government in its recent economic survey proposed for a universal basic income.
- This is a form of social security in which all citizens of a country receive a regular, unconditional sum of money, independent of any other income.
- Experts are of an opinion to rationalise on the characteristics of a basic income in India.
What are the considerations in this regard?
- Form of support - The question is whether to support vulnerable sections in the form of goods and services or as cash.
- Cash gives the discretion to beneficiaries to spend it any way.
- On the other hand, provision of services or goods directly to beneficiaries may be directed to achieve certain objectives in terms of nutrition, health or education.
- There are concerns of leakages and quality in provision as services.
- For India, where the State is already providing a whole lot of services, income support as a supplement to existing services would be the best option.
- Coverage - There is a need to rethink on the universality of the income.
- The adoption of a universal basic income is bound to be a fiscal burden for a developing country like India.
- The attempt must be to think in terms of reducing the number of beneficiaries using easily definable criteria. Some of it could be age, sex, etc.
- It should however be ensured that strict targeting does not run into complex problems of identification.
- Level of basic income - If we were to treat the cut-off used to define poverty as the minimum income, then the total fiscal burden would be enormous.
- Level of concentration of poverty within the poverty line and the poverty line itself could be used to arrive at an optimum basic income level.
- Support given under the MGNREGA can also be considered in this regard.
- Financing the scheme - As per experts opinion, the scheme would be feasible if the total expenditure is limited to around 1.5 to 2% of GDP.
- There are suggestions to rationalise the expenditure in certain areas to make up this cost. This includes
- Exemptions in our tax system.
- MGNREGS - as this employment scheme is very similar to the proposed basic income scheme.
- Expenditure on fertilizer subsidies.
- Higher income groups giving up the supplemental income.
- Given all these the remainder must come from raising additional revenue.
- Finally, the central government can seriously review the idea of basic income to making it a supplemental income.
Source: The Hindu
