Implementation of Universal Basic Income has many challenges: Arvind Subramanian

The chief economic advisor to the Government of India, Arvind Subramanian said Gandhiji will have at least four objections to UBI including giving charity to able-bodied persons.

4 min readAhmedabadOct 3, 2016 01:52 AM IST First published on: Oct 3, 2016 at 01:50 AM IST

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Chief Economic Adviser Arvind Subramanian. (Source: File Photo)

Linking the proposed Universal Basic Income (UBI) with the thoughts and principles of Mahatma Gandhi, the chief economic advisor to the Government of India, Arvind Subramanian on Sunday said many challenges needed to be resolved before the UBI scheme becomes a reality.

“There are many challenges in the implementation of this scheme of Universal Basic Income. Can the money reach the poor, given that many of them do not have bank accounts. Can we make it affordable for the government. Can we make sure the women (in the family) get the money, not the men… In the next economic survey that my team and I will produce, we will be examining all these in much greater detail,” said Subramanian while addressing an audience who had gathered for an inter-faith prayer meeting held at Sabarmati Ashram that was home of Mahatma Gandhi from 1917 to 1930.

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“What would Gandhiji have said to this idea of UBI. That is what I want to discuss with you,” said Subramanian while explaining to the audience in detail about a proposed new scheme through which the Narendra Modi government is considering giving unconditional cash transfer of about Rs 10,000-15,000 on an annual basis to each and every citizen in the country, where the average income of a person is 800-900 USD per day, in comparison to 52000 USD in United States and 12500 USD in China.

“Even if you accept the latest poverty numbers, there are still about 200 million people in India who are poor or very poor. It is in this context that I want to discuss a new idea for eliminating poverty almost at a stroke of a pen,” he said while talking about the proposed UBI that could possibly replace the 1000-odd schemes that the government runs for the poverty elimination like MGNREGA, PDS, Indira Awas Yojana, etc.

He said Gandhiji will have at least four objections to UBI including giving charity to able-bodied persons, implementation of UBI costing the government 5-10 percent of the GDP, the market dynamics not helping the poor in buying good and services and men in the family misusing the money coming through this scheme. Arguing in favour of the UBI, Subramanian said, “The first thing that I will tell Gandhiji is that today the government spends a lot of money on schemes to help the poor. Today there are at least 1000 schemes that the Central government runs for the poor…It is not clear that the money actually reaches the poor. So the question is whether the UBI is a more effective way of reaching the poor that the current schemes that government employs.”

“We have historically focussed on individuals who are poor by virtue of accident of their birth — they are dalits, adivasis, etc. But what is happening now is that the accident of birth has become less important than the accident of life. People fall into poverty due to reasons like drought, declining opportunities in agriculture, disease and so on…. So the safety net provided by the government should be quite wide and that is why this UBI has some merit,” he added quoting a research. He also argued that providing the UBI will open organised credit avenues for the poor who currently borrow from money-lenders.